Archive for Category 'credit card', page 2

Question: How do I find out who’s got the contract to collect on an old VISA card debt that went to collections a while ago? I’m trying to clear up my credit situation in preparation to buy a house in the next few years, and I defaulted on this VISA, but no longer have the card, account number or anything like that. I now have the means to pay this bill off, but because I moved around a lot while I was a student, I have lost track of the collection agency.

Answer: There are two options.  First, you could phone the bank where you had the credit card.  They should be able to advise you on how to make payments.

Your other option would be to get a copy of your credit report from Equifax; it will list your debts, with contact phone numbers to contact the creditor.

Question: If I owe a credit card company and I am making monthly payments – can they still take me to court?

Answer: In theory, yes, they can take you to court if you are in default; in most cases if you are making payments, they won’t take you to court.

Question: I have the following unsecured debts in my name and desperately need an answer as I have not missed any payments yet but I will shortly if I don’t get some help fast:
30,000.00 credit card
10,000.00 credit line through Canadian Tire Bank (it was through an old credit card that I no longer have, but still have the credit line)-the credit card was paid off and de-activated.
5,000.00 credit card – I can manage this one
I have secured debt:
10.000.00 – this is a truck loan in good standing for a year now.
My question is: Can I make a consumer proposal for the 30,0000 credit card debt and the 10,000.00 credit line and keep the 5,000 credit card and the 10,000.00 truck loan? The trucks value is about 13,000.00 after being paid off in another 4 years. I rent and I don’t own. I am single and also have one other asset 1 car being about 2500.00 my son drives this one but it is in my name. Can I pick and choose what consumer proposals I want or does it have to all or nothing? Please let me know a.s.a.p
thank you for taking the time to read this.

Answer:  A consumer proposal must be made to all unsecured creditors; you cannot pick and choose.  You may continue to pay secured creditors (such as car loans) if they agree, but you cannot include one credit card in a consumer proposal and not another credit card.

Given your level of debt your best option may be to file a consumer proposal for all of your debts, to give you a fresh start.  A trustee in Ontario can give you more information.

If you want to pick and choose, you either need to get a debt consolidation loan to pay off as many debts as you can,  or try a debt management plan through a non-profit credit counsellor.

Question: I have two credit card debts both for $5000. This September will mark 2 years that I have not made a payment. I do have $5000 in savings that I will be using to move. I would like to go to credit counselling but I am anxious that I will have to use my savings. I am anxious that there may be a court settlement regarding these debts that I am not aware of. Are government credit counselling services obliged to divulge my contact information to creditors or law inforcement if I request their services?

Answer: First, in most provinces credit counselling agencies are private not-for-profit agencies; they are not run by the government.   Their job is to work out a settlement plan with your creditors, often in the form of a debt management plan.  To do this they will communicate with your creditors, although legal they are not required to disclose anything you don’t want them to disclose.  In your case the settlement plan may involve you paying $200 per month for 50 months, which would pay off the debts in full, and would still allow you to use your savings to move.

Another possible option would be to file a consumer proposal, where you offer to use some of your savings towards a lump sum settlement, with additional payments over time.  For example, you could offer to pay $2,000 upon acceptance of the proposal, and then $200 per month for two more years.  In that example the credit card companies don’t get all of their money, but it may be enough for them to be satisfied.   However, all assets must be disclosed in this process, so the advice of a trustee is necessary before proceeding.l

Question: I am thinking of bankrupcy. Do I need to max out the credit card?

Answer: No.  If you deliberately max out your credit card and then go bankrupt, it is likely that the credit card company will pursue you for fraud.  Debts that arise as a result of fraud are not discharged in a bankruptcyf, so you would have to repay the money, and probably suffer through a longer bankruptcy process.

If you can’t repay your credit cards and if you are thinking of bankruptcy, you should stop using your cards immediately.

Question: My wife has $10,000 worth of credit card debt in Canada. We are now living in the United States. The Canadian creditors are now threatening to sue. What can they do to us if we don’t have bank accounts or property in Canada.

Answer: Practically, there is very little a Canadian creditor can do to you in the U.S.  Typically they will phone you and send letters.  If you don’t pay, they could seize your Canadian bank account (which isn’t a problem if all of your money is in your bank account in the United States).  Their final option is to sue you, which is possible but difficult, since it’s a lot of extra effort to sue someone in a different country.  It’s possible that the courts in the U.S. won’t allow them to collect the Canadian debt in any event.  Therefore, it is unlikely that they will do anything.

If they do, you could consult a U.S. Bankruptcy Attorney for more information.

Question: Two months ago I paid off my consumer proposal 9 months early. I have established a secured credit card in good standing, have maintained zero debt and have been employed long term. I need to purchase a vehicle, what is the best approach to take to have the best shot at financing (I have saved a small down payment)?

Answer: Now that your consumer proposal is completed, the car loan lenders will look at your income, your employment history, and the amount of your down payment.  The bigger the down payment, the greater the chances of getting a car loan at a favourable interest rate.

Our suggestion would be to visit two or three car dealerships.  Start by visiting a new car dealer; in many cases, because they have manufacturer’s financing, you may be able to get the best deal from them.  Also try a used car dealer.  Compare the deals they are offering you.  Also ask them if you would get a better deal by having a bigger down payment, or by waiting another six months or year after the completion of your proposal.  If an additional $1,000 down payment would make a significant difference in your payment, it may be worthwhile to wait a few more months before purchasing.

Question: A collection agency  purchased my debt from the bank. This debt is from 1999. I had a Line of Credit and 2 credit cards with them. I fell into bad times and when I tried to get it consolidated to a straight loan with the bank they said no and immediately started to remove my paycheque from my account as soon as my work deposited it. They did this twice until I had my work issue my pay as a cheque. Suffice it to say at the time I did not have a support network. No family or close friends that could help. I therefore just disappeared off the map so to speak. I slowly paid off my smaller debts. In addition at that time if your credit rating was bad a Bank could decline opening a bank account. I spent from 1999 until about 2006 without a bank account. Anyway, my question is what normally does a collection agency pay on the dollar to the bank to buy my debt. I have been told they pay 10 cents on the dollar. If that is the case what are my options when negotiating with this agency?

Thanks,

Hector

Answer: It would be highly unusual for a collection agency to purchase your debt from the bank.   Collection agencies collect debts on behalf of banks, but they don’t use their own money to purchase the debt.  If they manage to collect something, they get a percentage of the amount collected.

You have a number of options for dealing with the collection agency.

First, you can attempt to negotiate payment arrangements.  Since the debt dates back to 1999, the collection agency may be willing to accept payments over a period of time.

Second, you could offer a lump sum settlement.  If you owe $5,000, you could offer to give the collection agency $2,500 in full satisfaction of the debt.  They will often accept this type of settlement.  However, to be able to do this you would need to have $2,500 in cash, which may be difficult to borrow if your credit rating is poor.

Finally, if you cannot reach a settlement with the collection agency yourself, you could get help from other professionals.  A Debt Management Plan filed by a non-profit credit counsellor could be used, or you could file a consumer proposal or personal bankruptcy to deal with your debt. 

Question: We have just paid off our consumer proposal three months early. How do we go about getting a unsecured credit card. It seems nowadays you need to have a credit card for deposits etc.

Answer: Congratulations on paying off your consumer proposal early.  You can apply for an unsecured credit card through any bank.  However, because your proposal just ended, they may want you to wait a while before they will allow you to apply.

A quicker option is to get a secured credit card as a way to repair your credit.  One of the largest and easiest companies to deal with is Home Trust Visa; they specialize in helping people with less than perfect credit obtain credit.

The Home Trust Secured VISA is a credit card that requires a security deposit for eligibility. Your credit limit is then set at the amount of the deposit. You can put down as little as $1,000, or as much as $10,000. Your security deposit earns interest, while your Home Trust VISA card is open and in good-standing.

For more information or to apply, read our article on credit repair with a secured credit card.

Question: I lived in USA for 7 years legally.I have $60,000 in credit card debt.Now I have moved to Canada,but I am still working for the American company.I will never be moving to USA.Am I legally bound to clear the credit cards.What happens if I stop making the payments.

Answer: In most cases an American credit card company will not pursue you in Canada.  Since you work for an American company they may try to pursue you, but in general a Canadian court order is required to garnishee a Canadian paycheque.  You could wait until something happens, or you could discuss this with a bankruptcy trustee or lawyer for more specific advice.