Archive for Category 'Credit Counselling', page 4

Question: I read that credit counselling and the proposal have the same effect from the credit report point of view, so why opt for credit counselling and pay off all amount owed instead of a consumer proposal where you can pay 60-70% of amount owed and be debt free. Thanks

Answer: You are correct. According to Equifax, both a debt management plan and a consumer proposal remain on your credit report from the date of the last payment.

Many people opt for a credit counselling debt management plan because the do not want to include all of their debts in the plan; in a consumer proposal, you must include all of your unsecured creditors (you can’t pick and choose).

You are correct that in a debt management plan your debts are typically repaid in full, whereas in a typical consumer proposal you pay less than the full amount owing.  The other big advantage of a consumer proposal is that it is legal binding; once it has been approved by the creditors, they cannot change their mind.

For more information, contact a credit counsellor or a proposal administrator.

Question: I am seriously delinquent on my credit cards. I was with settlement company that did not work for me.
i am trying to get an unsecured loan to settle all of my credit card debt. does anyone know where i could get it ???? my debt is around 10 thousand. i don’t know what to do or where to start !!???!!! i’m in such deep hole i don’t see the light.. please Help!!

Answer: You have a number of options.  For a loan, you can try your bank; if they have already said no, it will be difficult to qualify at another bank. You could try a finance company, but they generally charge very high rates of interest (up to 30%), so you are better off paying your credit cards at 18% than paying 30% on a finance company loan.

If you don’t qualify for a debt consolidation loan, and you need a fresh start, you should also consider a debt management plan, a consumer proposal or personal bankruptcy (just follow the links for more information).

Debt problems don’t usually get better on their own, so the sooner you take action, the sooner you will be living debt free!

Question: I am in debt up to my ears…well that is how it feels anyway. I am currently paying minimum payments on a maxed out credit card of 1000 dollars, a car payment of $250, and a student loan for $95/month…not to mention insurance and monthly bills. We have 3 kids and I only work a part time job, reason being that if I worked full time all of my income would go strait to daycare.

I have about $3000 worth of debt sitting with collectors and never realized the consiqueses of it until just recenly when we were given a notice to vacate our home due to major renovations. I have been frantically searching for a home but have been turned down a few times due to credit. I am afraid we might end up homeless.

Is there a way to have my debts negotiated and just use my part time income to pay off my dormant debts and have my husbands income used to pay the car, insurance and all other household expenses or when I get assesed will my husband income be included.

In other words: Can I just use my personal income to pay off the debts that I have just sitting and leave my up to date debts out of it? (My husbands income is his and mine is mine kind of thing)

Answer: Yes, there are two possible approaches.  The first option is to do exactly what you suggest; you take all of your money and use it to repay your debts.  Start by making a budget so you know where your money will be going.

Your other option would be to get the help of a credit counsellor to help you negotiate or make a plan to deal with each of your debts.  Either way, the sooner you start, the sooner you will be able to work out a plan to deal with your debts.

Question: I went on Credit Counselling 2.5 years ago. I had a debt of $24000 and now its half. Being on a debt management plan I cannot get a mortagage etc. I am making good money and matured in the sense that I can do a good financial managment. Now I want to go out of DMP, pay the remaining $12000 myself to creditors with monthly payments + ineterst. I think after being out of DMP for 6 months to a year and making paymnents with interest I can improve my credit and hence qualify for a mortgage, is it possible to get out of DMP and make payments to creditors myself with interers. Will creditors like it? Any experience with this.

Answer: Yes, if you stop making payments on the debt management plan your DMP will die.  You can then start dealing directly with the creditors again.  Alternatively, you could increase your DMP payments and get it done quicker.  You should discuss both options with your credit counsellor to determine the best option for you.

Question: We had an excellent credit record until we moved to another country 2 years ago, we were victims of fraud and robbery that affected our capacity to pay our debts in at least 2 credit cards, we explained to the collection agency that it was impossible for us to pay at the time; however now we are back on track and we would like to correct our situation, how should we proceed? can we negotiate a settlement?
My bank manager informed me that our line of credit could be (understandable) canceled because of our situation, my wife is on D9 code, something really bad according to may bank manager.
Now we face the situation of eventually going back to Canada and not being able to get a mortgage.

Please advise

Answer: Yes, it is possible to work out settlements with your creditors.  You can contact them and ask them what they are willing to accept as a settlement.  If they will not accept payments, or if you do not have sufficient funds to make settlements with them, you may need to consider filing a debt management plan, a consumer proposal or personal bankruptcy.

Question: My husband had bad credit and I had very good credit, he was using me for all his credit, some without me knowing about, credit card that he would us and overdraft at the bank, he took off about 3 months ago and now I find out that I owe thousands of dollars that I never spent or new about, to say the least every time I put money in the bank he steals it. One thing though I had drawn up a paper that he signed back in Oct 06 stating that he had owed me money and he promised to pay this money back, does any one know what I should do. I think some of this is fraud, but I am not to sure.
All these bill collectors keep calling and some I have talked to and tryed to explain and I guess they think I am lieing or some thing.
Is any one able to give me a little direction on what I should do, any help

Thanks

Answer: There are two obvious courses of action.

First, you could talk to a lawyer about pursuing your ex for fraud.  In most cases this is a very expensive alternative, and if he has no money, you have no chance to recover.

Your other alternative would be to talk to a credit counsellor or a bankruptcy trustee about your options for dealing directly with the creditors, through credit counselling or perhaps filing bankruptcy.

Question: I owe alot of money in credit card debt and overdrafts and can’t even make the minimal payments on time as I bring in $1356 a month. I keep rotating the payments from one creditor to the next and was told that is not a good thing to do but I am seriously trying to avoid filing a second bankruptcy since I had before and been off file file since 2001. I spoke with my banks and they won’t negotiate with me as they told me that they could close the accounts but I would still have to pay interest plus min payments each mohth. Now, you would think they would want to help me get out of this mess because if I file they get nothing right? I don’t have any assets and am on Disability Income too. I just don’t know what to do right now? I would have to pay a trustee $200.00 a month apparently accordingly to the rate that is set and so that would give me hardly anything to live on….

Answer: If you cannot work out payment arrangements with your creditors, and if you don’t want to go bankrupt, you could attempt to resolve the situation through a debt management plan filed through a credit counsellor.

There is no guarantee that they will be able to help, but it doesn’t hurt to contact a credit counsellor and see if they have any strategies to help you negotiate settlements with your creditors.

Question:  have recently seen a credit counsellor.  He is going to help us with some of our money problems with our creditors one of our creditors had called me and said they are not accepting the offer he gave them and is going to garnish my hiusbands wages for 20% can that happen?

Answer: Yes. Credit counselling is an informal solution, negotiated between you and the creditors.  However, the creditors are not required to accept the offer, and if they don’t, they have the right to got to court and attempt to garnishee your wages.  If that happens, to stop the garnishment you should consider filing a debt management plan, a consumer proposal or personal bankruptcy.

Question: Just want to know how it works. I have debt and I can’t pay. I am working.

Answer: If you have more debt than you can repay, but you are working, there are three obvious potential solutions for you: a debt management plan, a consumer proposal or personal bankruptcy.

A debt management plan is administered by a credit counsellor where you repay all of your debts over up to a five year period.  In most cases you pay no interest.  If you don’t have enough money to repay them in full, a consumer proposal is your next best option, because in most cases you make payments to your creditors, but based on your income you may not be required to repay them in full.

If you cannot afford those options, you could file personal bankruptcy. To help you sort through these options, you should contact a credit counsellor or bankruptcy trustee.

Question: i tried to open a business using my credit cards and i got ripped off for 8,000. and no cash or assets left. im on disabilty long term thru social services and i cannot pay my credit cards. i was fine up to oct. last and then everything came crashing down. i rent and have nothing but an old jeep. my health is bad and i have nothing – what do i do?

Answer: You have three options.  First, you could open a new bank account at a new bank, and then tell your creditors that you are unable to pay them.  They may keep calling you, but they cannot garnishee your wages (unless you return to work).

Your second option would be to talk to a credit counsellor about filing a debt management plan where you repay your debts in full over a three to five year period.

If you can’t afford that, your final options would be to file a consumer proposal or personal bankruptcy. However, both of these options cost money, so you will need to decide whether the cost of the procedure is better than simply putting up with the phone calls.