Archive for Category 'personal bankruptcy', page 2

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.

Question: my husband and I are considering going bankrupt due to over whelming debt. We have a mortgage and are terrified of loosing our house. Our mortgage is with the bank and we think the property value is going to be close to the mortgage that is on it now. Would they foreclose if there was say $5000-$10,000 equity?

Answer:  It is doubtful that the bank would foreclose if your mortgage payments are up to date; you should contact the bank prior to declaring bankruptcy to get confirmation directly from them.

The other issue is that if you have equity in your home, the trustee in bankruptcy is required to collect that equity from you.  In simple terms, if you have $10,000 in equity, you would be required to pay the trustee $10,000 in order to keep your home.

The amount of equity you are permitted to keep varies in each province, so before making a decision you should contact a bankruptcy trustee.

Question: I’m a Canadian, living now in Canada and accumulated huge credit card debt in the U.S. I’ve been unemployed and want to declare bankruptcy in the U.S. From what I’ve read, it’s not possible.

Is there anything I can do?

Answer: If you return to the U.S., it may be possible for you to declare bankruptcy in the U.S.   American bankruptcy rules are different than in Canada, so you need to consult a U.S. bankruptcy attorney.

Your other option is to do nothing until one of your U.S. creditors pursues you in Canada, and you have assets to protect.  Since you are not currently working, they cannot garnishee wages that you don’t have, and it is uncommon for a U.S. creditor to pursue someone in Canada, so if you don’t plan to return to work in the U.S., doing nothing for now may be your best option.

Question: I graduate this coming April…which is great…but also brings on reality where I must begin my debt repayment.

I was as worried before, but with the current state of our economy, I am really beginning to get worried!

My debt is approximately as follows:

Student loan: $20,000
Line of Credit: $15,000
Vehicle: $20,000

Being in the position, currently, not knowing what pay rate I will be getting when I get a job upon graduation….

Is there anything I could do now to start planning how I can pay off my debt as quick as I can?

Answer:  You ask and excellent question, and it is good to see that you are being pro-active in dealing with your situation.  Ultimately, until you know what pay rate you will earn at your new job, it is difficult to accurately plan your future.  However, there are some steps you can take.

First, you should make a household budget so that you can see exactly where you spend money each month.   By starting the budgeting process now, you will have a head start once you are working. You should also read our budgeting tips article for more information.

Next, you should understand all of your options, including a debt management plan, consumer proposal and bankruptcy.  If you get a good job none of those strategies may be necessary, but you should understand them now in the event that they do become necessary in the future.

Finally, based on this research, you may want to have a meeting with a credit counsellor or bankruptcy trustee to review your options in detail, so that once you are working you already understand your options.

Question: I owe $70,000 in unsecured CC and bank debt, have a good credit rating and I don’t want to go bankrupt! I would like to go the Consumer Proposal route. I only have one creditor. My situation is that I can only afford between $300-$350 a month. Will the creditors accept that? And if they do, would they ask me to go longer than three or four years? I’m clueless so even an opinion would be a big help. Thanks.

Answer: Whether or not the creditors will accept a consumer proposal depends on a number of factors.  The most important consideration will be how much the creditors would receive if you went bankrupt.  If based on your income you would be required to pay, say $10,000 in a bankruptcy, the creditors would not accept only $5,000 in a proposal.  However, if you offered $30,000 (say $500 per month for 5 years), they probably would accept it, since it is better for them than a bankruptcy.

They may also consider your past payment history, your family obligations, what assets you own, and other factors.  For more information, contact a trustee for a no charge initial consultation.

Question: My fiance had a credit card in his youth that went unpaid, and he went to credit counselling to pay off a $1,500 debt. He has paid it off ahead of schedule with a perfect repayment history.

We are now applying for a car loan and have been denied. They said his credit history said he has declared bankruptcy for $1,500. We knew his use of credit counselling would prove difficult to establish new credit, but why are they saying this debt repayment program is the same as bankruptcy?

His counsellor said his debt repayment would appear on his record for two years, however the car dealership says it is bankruptcy and it will appear for 7 years.. We’re confused..

Answer: It appears that everyone is confused.  According to Equifax, the largest credit bureau in North America, a debt management plan through a credit counsellor remains on your credit report for 3 years after the payments are completed.  A bankruptcy appears for six years after the date of discharge.  We suggest you get a copy of the credit report to see what’s actually reported on it; it appears that the car dealership is either reading the credit report incorrectly, or the information was reported incorrectly.

Question: I’ve recently received a letter requesting payment on my past due student loan.
I’ve gone to the bank for assistance but was denied. I don’t want to file for bankruptcy. What are my options?

Answer: You have three options.  First, you could simply make payments on your own.  If you can’t pay the full amount, you could pay them whatever you can afford.  It is possible that the student loan lender will continue to pursue you.

You could attempt a debt management plan through a credit counsellor.   Whether or not this will be successful will depend on the amount of money you have to contribute to the plan each month.

Finally, you could offer a consumer proposal, the success of which will depend again on the funds you have to offer each month.  If these options fail, a bankruptcy may be your final option.

Question: How many times is one allowed to claim bankruptcy?

Answer: There is no limit.  However, if you file bankruptcy more than once, you will be required to attend in bankruptcy court and explain the reasons for your bankruptcies, and it is likely that the bankruptcy court will impose additional conditions, such as requiring extra payments, before you will be discharged.  A bankruptcy trustee can provide full details.

Question: Ten years ago I had a catastrophic accident and was not able to pay my credit card debt I was in hospital for a long time then went through psychiatric problems. Now a collection agency has contacted me and says I owe over $17, 000. I never owed more than $5,000 at the time. I can’t pay this. What now?

Answer:  You have three choices.

First, you could simply advise the collection agency that you cannot pay.  Since the debt is over 10 years old, it is unlikely that they will pursue you in court.

Second, if they do take you to court, you could hire a collections lawyer to represent you.  He will advise them that the Statute of Limitations has elapsed on your debt (depending on where you live).  That does not eliminate the debt, but it does prevent them from taking further action against you.

Finally, you could simply declare personal bankruptcy to discharge your debts.  However, there is a cost to bankruptcy, so you would need to discuss this first with a bankruptcy trustee to determine if this is the correct option for you.

Question: I am in debt to rev can and several credit cards if i go personally bankrupt what effect does this have on my business I am a partner?

Answer: If you go bankrupt, the trustee is required to seize certain of your assets.  If your business has great value or significant assets, the trustee must seize them.  If you are a partner in a business, the trustee would seize your share of the partnership.  Practically, most small businesses have few valuable assets, so it may be possible for the trustee to get an appraisal of the business assets and work out a payment plan so that you can make payments to the trustee during the bankruptcy so that you don’t lose those assets.  Either way, this is something you should discuss with a bankruptcy trustee before you decide on whether or not to file bankruptcy.