I seperated from my husband, I have credit cards that were a joint effort. I pay the minimum payment due each month on them, but I am paying interest only. I ask my bank about a consolidation loan, they said i am better off doing what i am doing then paying a loan. Its cheaper. I asked for credit councelling and they told me my credit was good and they don`t want to see me go bankrupt to make my credit worse. I called my credit card companys to lower my interest and they said they can`t help because I make my payments regular and it doesn`t look like I need `help`. I work full time 40 hours a week, and have a second job at nights. Due to car accident makes it hard to do my second job, as i first job suffers. Please Help..
What option do I have?
posted by Questions @
1 Expert Comment:
At August 20, 2009 |
4:02 am
, Bart Goth, Trustee in Bankruptcy Said...
In terms of what to do, we suggest people consider the following options when they are experiencing financial difficulty include:
1. Negotiate with your creditors. Explain why you have fallen behind in payments. Outline your financial situation and expectations for the future. Suggest a payment plan that is realistic and reasonable for both you and your creditors. As this is an informal process make sure that if you come to an agreement get written conformation. .
2. Apply for a consolidation loan. Take out a loan to pay off all of your debts. This can potentially lower your interest rate, total monthly and sometimes the total length of the contracts. With consolidation loans it is important that you examine your current spending habits and stop using your so you do not continue to fall further behind.
3. Make an application to Orderly Payment of Debts through Credit Counseling. 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 prime or even eliminated. 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 the plan.
4. Make a proposal to your creditors under the Bankruptcy and Insolvency Act. 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.
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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