too much debt – looking for options
Question: I do not want to claim bankruptcy. I have about $25,000 debt, credit cards, loans etc. still good credit. been doing all my min payments. Don’t have a job. min payments are about all I can do. Am not getting anywhere with my debt. Will remain in debt forever if i don’t get help. Can anything be done?
Answer: You have a few options.
First, you could continue doing exactly what you are doing until you find a job. You make your minimum payments to keep your rating positive, and then when you are back to work you can work on paying down your debt.
Second, you could file a debt management plan with a not for profit credit counsellor who will work out a repayment plan where you repay your debts in full, but at a low or zero rate of interest.
Third, you could file a consumer proposal where you repay a portion of your debts.
Both a debt management plan and a consumer proposal require you to have enough money each month to make payments on your debts. If you are not working that may not be possible, so you will need to review your budget to see exactly how much you can afford each month.
Finally, as a last resort bankruptcy is an option. If you are not working you have no wages, so your wages cannot be garnisheed, so bankruptcy is not necessary to prevent a wage garnishment. However, you may decide that it is better to deal with your debts now, so that when you return to work you do not have the stress of the debts.
We suggest you consult a licensed bankruptcy trustee to review your options in detail, and help you decide which option is best for your.