What options do I have?

Posted on Monday, April 14, 2008

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I am in a bind and I am having a hard time making my payments on all my credit cards, my line of credit and really all my bills. I don`t want to go bankrupt but was wondering what other options do I have other than bankruptcy?

Filed under: Money Management and Consumer Proposals and Bankruptcy
 posted by Questions @ 8:05 am
1 Expert Comment:

 At April 16, 2008 | 6:31 am , Barton Goth GCO Bankruptcy Trustees Said...

The options that we suggest people consider when having financial difficulty are as follows:

1) A Debt Consolidation Loan - this is done throug a bank, you must make an applciation with the bank to determine if you qualify and then you must use the proceeds of the loan to to repay all of your existing debts. This solution is the only one listed here that will not have a negative impact on your creidt rating and the biggest advantage of a consolidation loan is that interest that will be charged is typically significantly lower than the interest you are currently paying on your credit cards.

2) Credit Counseling’s Orderly Payment of Debt program - this is a voluntary program where your debts are pooled together (they aren’t actually paid off) so that you are only required to make a single monthly payment to a non-profit counseling agency. As you make your payments the agency forwards funds to each of your creditors in proportion to your total debt. The advantage of this procedure is that usually the interest on your unsecured debts is reduced to 5%. You are required to repay 100% of what you owe, but because of the reduced interest your monthly payment is much lower than all of your minimum payments would have been without OPD.

3) A Proposal to Creditors (also called a Consumer Proposal)- this solution is used by people who cannot afford (or get approval for) a consolidation loan or a credit counseling plan, but don’t want to file bankruptcy. In a proposal you offer to repay a portion (perhaps 100%) of the debt that you owe. 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.

4) 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 trustee in bankruptcy, licensed by the federal government to handle this type of procedure. To find a trustee in your area use the links on the right hand side of the website.

For more information feeel free to contact myself at any time.

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