I need to know if I have any options. I currently over 35,000 dollars per year and have about 30,000 credit card debt. I don’t really own much, just some furnishings a car that is financed and the clothes on my back. I have managed to keep afloat for a while, but I can see trouble looming and with the high interest rates I never seem to be able to get ahead. Is there anything I can do?
Options?
Posted on Saturday, November 11, 2006
posted by Questions @ 7:40 pm
1 Expert Comment:
At November 13, 2006 |
10:24 am
, Barton Goth, GCO Inc. Bankruptcy Trustees Said...
There are a variety of things you can consider, typically I suggest that you consider the following:
1. Try to negotiate with your creditors. Explain why you are in arrears, outline your financial situation, most importantly suggest a payment plan that is realistic and reasonable for both you and your creditors and make sure you get any agreement evidenced in writing.
2. Consider a getting a consolidation loan, use this loan to pay off your debts. As the consolidation loan will likely have a lower interest rate you will often be able to both pay off the debts quicker and often make a lower monthly payment as well. The key thing to keep in mind with a consolidation loans it is imperative that at the very least you carefully look at your current spending habits and make changes so you do not continue to fall further behind and ideally you would cut up your existing credit cards, making it impossible for you to get further into debt
3. Consider looking into Credit Counseling. In Alberta they have a program called Orderly Payment of Debts that is very similar to a consolidation loan, but comes with the protection of the court.
4. Consider making a consumer proposal to your creditors under the Bankruptcy and Insolvency Act. This is a court sanctioned process that will allow you to negotiate a settlement with your creditors. While the terms of the settlement are depenant on your personal and financial circumstances thy can often settle the debt for less than 100 cents on the dollar and result in a fixed monthly payment that fits into your budget. 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.
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