Hello,
I am in my late 60`s, am married and between me and my husband have approx. $55k in credit cards. We rent, lease a vehicle and don`t have much property. I feel kind of foolish, but until just recently I thought we could afford to get out of this by making regular payments from our pensions, but as I have tried to do this the debt hasn`t gotten smaller. Can you help us?
credit card debt to high on fixed income
posted by Questions @
1 Expert Comment:
At August 8, 2009 |
7:20 am
, Bart Goth, Trustee in Bankruptcy Said...
This is definitely an area we can help. There are a number of options we can discuss. The standard options that we suggest people consider when they are experiencing financial difficulty include:
1) A Debt Consolidation Loan – this is normally done through a bank or other lender. You simply apply for a loan to repay all of your existing debts. This solution is the only one listed here that will not adversely affect your credit rating. The advantage of a consolidation loan is that the interest charged is generally significantly lower than credit card interest rates.
2) Orderly payment of debt – this is a program that is managed by Credit Counseling Services of Alberta (CCSA) and it is a voluntary program where your debts are pooled together (they aren’t actually paid off) and you are only required to make a single monthly payment to CCSA. 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 the interest is fixed at 5%, and while you are required to repay 100% of what you owe, due to the reduced interest your monthly payment is much lower than all of your minimum payments would have been without the plan.
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 of the debt that you owe. Proposals are an excellent alternative to bankruptcy, but they are not well known so if you would like to know more details about a proposal feel free to contact me directly.
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, like myself.
Obviously not every option works in every situation and to determine what options suites your scenario it is best to sit down to review all the little pertinent details with a local trustee.
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