What to do? 2 maxed out credit cards and a student loan.

October 15th, 2014 by Questions

HI there,

I am 30 tunring 31 and just finished my 3rd year of my business admin degree. I am now taking one course along with making 2400$/month after taxes working full time. I have two old cars that need lots of work done. I have two credit cards that are maxed and at 20% interest- one at 6000$ and other at 3000$. I have 30,000$ in student loans due. I feel stuck. I have to pay for my insurance, gas and rent each month. I feel like I will never get ahead and am thinking bankruptcy is my only route. what should I do!!

Posted from: British Columbia


One Response to “What to do? 2 maxed out credit cards and a student loan.”

, Jillian Taylor-Mancusi, Trustee | B.A. | C.I.R.P said:

The student loan program is designed to enable people to further their education and is repayable over a longer period of time. The intent is that with a higher level of education one is likely to be able to command a higher level of salary. Nevertheless the starting salary one gets able the completion of one’s education may be considerable less then what one can get with a combination of education and experience. The Bankruptcy and Insolvency Act, recognizes the intent of the student loan program allows that one’s student loan debt is not discharge in bankruptcy if it occurred within seven years prior to the date of the bankruptcy. There is a provision that it can be retroactively included in the bankruptcy if an application is made to the courts within five years. In this provision the courts will ensure that true financial difficulty persists and the debtor has made reasonable efforts in the meantime to try and reduce the student loan.

With respect to the rest of your debt, that is $9,000.00 in credit card debts, it would seem that your first plan would be to institute a strict budget. While your income may only allow minimal payments your prospects for future income would suggest that you would be able to handle these debts better in the not so distant future.

That being said, if your income does not increase and you are unable to budget your way to a solution you may want to look at the possibility of filing an assignment in bankruptcy. Notwithstanding that the student loan may not be discharged in the bankruptcy, by eliminating the credit card debt through the bankruptcy process you may be better able to pay the balance of the student loan off quicker.

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