what is the solution for this specific debt problem?

October 23rd, 2009 by Questions

I am checking all the alternatives to bankruptcy, but I don`t see one that fits me. My big debt is about 8,500.00 on credit cards.
I just file for EI for I suddenly lost my job, so I don`t have any money, any saving, no assets, no house, no car, not any income but the one I am waiting I am going to have from EI if my request is accepted. Since I don`t know how long it is going to take me to find another job I am considering bankruptcy but after getting the info from all the differents alternatives to bankruptcy I notice that I have to have some money in order to pay for fees or montly payments during the whole process of whatever is my best option. But I don`t have any money(litterally), no money at all, not even for food.
What can I do in this situation?
Help please.

Posted from: British Columbia


One Response to “what is the solution for this specific debt problem?”

, Barton Goth - Goth & Company Inc. -Trustee in Bankruptcy said:

If you are looking for something that doesn’t cost, it doesn’t exist. All the ways to deal with overwhelming debt have a cost. However, In terms of what to do, we suggest people consider the following options when they are experiencing financial difficulty include:

1. Negotiate with your creditors. Explain why you have fallen behind in payments. Outline your financial situation and expectations for the future. Suggest a payment plan that is realistic and reasonable for both you and your creditors. As this is an informal process make sure that if you come to an agreement get written conformation. .

2. Apply for a consolidation loan. Take out a loan to pay off all of your debts. This can potentially lower your interest rate, total monthly and sometimes the total length of the contracts. With consolidation loans it is important that you examine your current spending habits and stop using your so you do not continue to fall further behind.

3. Make an application to Credit Counseling. This is a voluntary program where your debts are pooled together (they aren’t actually paid off) so that you are only required to make a single monthly payment to a non-profit counseling agency. As you make your payments the agency forwards funds to each of your creditors in proportion to your total debt. The advantage of this procedure is that usually the interest on your unsecured debts is reduced to prime or even eliminated. You are required to repay 100% of what you owe, but because of the reduced interest your monthly payment is much lower than all of your minimum payments would have been without the plan.

4. Make a proposal to your creditors under the Bankruptcy and Insolvency Act. This solution is used by people who cannot afford (or get approval for) a consolidation loan or a credit counseling plan, but don’t want to file bankruptcy. In a proposal you offer to repay a portion (perhaps 100%) of the debt that you owe. Proposals are an excellent alternative to bankruptcy, but they are not well known so I suggest you contact a local trustee and ask them about proposals if you are interested in this solution.

5. File for bankruptcy. If none of the other procedures listed is appropriate for you then bankruptcy may be correct solution. The concept behind bankruptcy is that you cannot afford to repay even a portion of your debts. To file bankruptcy you must meet with a licensed trustee.

Certain provinces have an additional option for their residents called an Orderly Payment of Debts. When you speak to a trustee they will advise you whether or not this solution is available where you live and makes sense for you.

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