Here is my situation:
- I am a single mother,
- I work part time
- I make about $1400 per month
- I attend university full time
- I have 2 years left
- I owe about 53,000.00 in credit cards and lines of credit
Is bankruptcy my best option. I really don`t want to file for bankruptcy, but what else should I do? Will I still be able to go to school if I file for a bankruptcy?
At August 14, 2009 |
6:28 am
, Bart Goth, Trustee in Bankruptcy Said...
It is difficult to say whether or not bankruptcy is the best option, but based on your monthly income I think you would have trouble finding another option that you could afford. However, the standard options that we suggest people consider when they are experiencing financial difficulty include:
1) A Debt Consolidation Loan – you approach a bank or other lender and 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. If you apply for a consolidation loan at a bank and your application is turned down that means the lender thinks you have accumulated more debt than you can reasonably be expected to handle.
2) Credit Counseling – 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 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. For your reference, there is no cost or obligation to do this, the idea behind this type of meeting to give me an opportunity to ask the necessary questions to be able to provide the direction you need. If you are interested in setting up a time for us simply follow this link: local trustee.
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