Bankruptcy

[mhk]

ohhhh - Good luck to y'awl! Hope all goes well for you in the future too

[lior]

I have an appointment on Tuesday to talk with a trustee. I'm swaying towards consumer proposal as well. As for my spouse he'll probably have no choice but to declare bankruptcy. We have a vehicle that we're behind on so I'll need to find something since we're currently renting a house that is a little to far from local transit and with a two year old I don't want her getting sick in the winter months in a 20 minute walk to the bus. I attempted last year to rent an apartment closer to her daycare but was declined due to my credit then. Yet another discussion that I'll be having with the trustee.

I owe about $35,000. The spouse more than $70,000 about half of that is taxes.

A lot of the times it depends on the nature of the debt you owe. If it's mostly unsecured debt and you have little to no assets (or income) bankruptcy will be the better choice. If you've got assets then you may want to consider a consumer proposal. While I'm not a trustee, I believe that CRA debt will be wiped by a bankruptcy. If CRA is owed a significant amount the discharge would have to be done through court. Remember that a proposal is purged from your credit profile 3 years after it is paid off and not when it was originally filed. Since most consumer proposals take 3 to 5 years to pay off, the time span in terms of impact on your credit is the same as bankruptcy. Proposals are viewed by financial institutions in the same severity as bankruptcies. It is a myth that creditors see a proposal more favorably.

badinnb: you may want to obtain a secured card to re-establish your credit. Most banks and credit unions offer a secured credit card but you have to apply at the branch. After a year or two you can try to apply for an unsecured card. If you're had a bankruptcy or went through a proposal and never re-established your credit, it's no wonder that no institution will deal with you.

[JD in Van]

I'm in the 'way over my head in student loan' camp too. I've been treading water for a long time. After this summer my kiddo will finally be out of day care and that will free up a little more $ to put towards them. My BC Student loan is substantially smaller (about 20K) and I've been paying that well for years but my Canada Student Loan is in the 40K ball park and it's... too much. Has anyone managed to deal with CSL to reduce their loans once they're out of interest relief without these extremes?

Also I totally recommend the secured card route. That's what I did, I started out with a $300 capital one card and for a year that's all I got. Now they've increased my credit with them based on my payment record with them, rather then my credit rating in general. ALSO, with the new rules you can decline an credit limit increase which will help you if you've had CC problems in the past. What I did to rebuild my credit rating on my CC is pay all my bills on it (TV, Phone, Hydro) rather then shopping on it. I had to pay these bills any how and as long as I paid off the card every pay cheque, might as well do it on their and show them they could trust me.

Lastly, to those who haven't been on Student Loan, I know you look at those who have and think "Are you crazy" but... you're 19, you're broke and someone comes to tell you that hey they'll finance your education and you'll get a great job when you're done. And you believe them, they're your government. I've come to realize that student loans are far more insidious then credit cards or any other debt really.

My experience? I was a single mother with no child support and little work history outside of retail, nothing I could do that would allow me to support my baby (daycare out here is $1000-$2000/month for kids under 3!) .

I was told to go to school or go on welfare. At the time the Government had a program that covered about a 3/4 of my loan so long as I did well and was on track for a degree so I choose school. I had anticipated graduating with about 21K in debt which I felt was entirely doable.

Towards the end of my 2nd year though, the NDP gov in BC was defeated by the Liberals who immediately 1. canceled the program and 2. lifted the tuition cap. Over the next two years tuition doubled and every every term was more and more debt. You know the government assured people who were on the loan program 'oh it's okay there will be debt reduction programs for you later' but they were and still are insufficent and it's hard when you're 19, 20, 21... you have no idea what life is going to be like when you're 30. You can't.

I know a few people from Poland and France where they don't have to pay for Uni at all and it's amazing. They graduate from collage and they can start their lives with out having already morgaged them. I wish we could cut ties with this idiotic American notion that education should be expensive and therefore only for the wealthy and look at models that work far better else where in the world.

So. Don't judge. I have empathy for everyone who's in this boat. But we'll all get out of it one way of another (probably living off mac & cheese and peanut butter and jelly a lot on the way).

[butterflies114]

It only stays on your credit report for 3 years after you are discharged. It's not a life sentence.

Does anyone know this for sure? I am curious because I did a consumer proposal (best and worst thing I ever did) when I was on maternity leave and my DF got laid off.. however I was told that it stays on for 7 years after it is paid off!! but I was running on lack of sleep when I met with my Trustee that day and may be mistaken!

[Insane]

Does anyone know this for sure? I am curious because I did a consumer proposal (best and worst thing I ever did) when I was on maternity leave and my DF got laid off.. however I was told that it stays on for 7 years after it is paid off!! but I was running on lack of sleep when I met with my Trustee that day and may be mistaken!

Bankruptcy is 7yrs (from filing I do believe), consumer proposal is 3yrs once you are done (so the term of the proposal +3yrs). I'm sure of it.

http://www.bankruptcy-canada.ca/cred...dit-report.htm

[Insane]

I'm in the 'way over my head in student loan' camp too. I've been treading water for a long time. After this summer my kiddo will finally be out of day care and that will free up a little more $ to put towards them. My BC Student loan is substantially smaller (about 20K) and I've been paying that well for years but my Canada Student Loan is in the 40K ball park and it's... too much. Has anyone managed to deal with CSL to reduce their loans once they're out of interest relief without these extremes?

Also I totally recommend the secured card route. That's what I did, I started out with a $300 capital one card and for a year that's all I got. Now they've increased my credit with them based on my payment record with them, rather then my credit rating in general. ALSO, with the new rules you can decline an credit limit increase which will help you if you've had CC problems in the past. What I did to rebuild my credit rating on my CC is pay all my bills on it (TV, Phone, Hydro) rather then shopping on it. I had to pay these bills any how and as long as I paid off the card every pay cheque, might as well do it on their and show them they could trust me.

Lastly, to those who haven't been on Student Loan, I know you look at those who have and think "Are you crazy" but... you're 19, you're broke and someone comes to tell you that hey they'll finance your education and you'll get a great job when you're done. And you believe them, they're your government. I've come to realize that student loans are far more insidious then credit cards or any other debt really.

My experience? I was a single mother with no child support and little work history outside of retail, nothing I could do that would allow me to support my baby (daycare out here is $1000-$2000/month for kids under 3!) .

I was told to go to school or go on welfare. At the time the Government had a program that covered about a 3/4 of my loan so long as I did well and was on track for a degree so I choose school. I had anticipated graduating with about 21K in debt which I felt was entirely doable.

Towards the end of my 2nd year though, the NDP gov in BC was defeated by the Liberals who immediately 1. canceled the program and 2. lifted the tuition cap. Over the next two years tuition doubled and every every term was more and more debt. You know the government assured people who were on the loan program 'oh it's okay there will be debt reduction programs for you later' but they were and still are insufficent and it's hard when you're 19, 20, 21... you have no idea what life is going to be like when you're 30. You can't.

I know a few people from Poland and France where they don't have to pay for Uni at all and it's amazing. They graduate from collage and they can start their lives with out having already morgaged them. I wish we could cut ties with this idiotic American notion that education should be expensive and therefore only for the wealthy and look at models that work far better else where in the world.

So. Don't judge. I have empathy for everyone who's in this boat. But we'll all get out of it one way of another (probably living off mac & cheese and peanut butter and jelly a lot on the way).

I hear you! Same situation, going to school with a toddler, ect....I regret so many things, but I still can't see a way for me to be where I am without having taken on the debt. So I could either be where I am today or on social assistance!

How long have you been out of school? Have you talked to them about your options?

[JD in Van]

I've been out of school since 06. I've stretched out my federal debt to a 13 year term which HAS reduced the payments to a level that I can make most months and I'm essentially turning over all my tax returns directly to them which is helping... a little. It's slowly whiddling down. Eventually I think the best thing, once I've exusted all the relief I can get through CSL's programs would be to consolidate both loans into one if I can get a debt consolidation loan for student loans and I'm pretty sure I'm nearing that point.

Unfortunately a lot of debt aid and even credit counciling programs won't help you with student loans which really sucks since I think student debt is probably the BIGGEST problem this country has.

[derek2011]

your best option is to call a trustee they will give you the best advice for your situation.
I am going through it now and there are certian things you can do to help you credit in the end, give you an example I did not bankrupt on my car payment and at the end I will be in good standing with them.
My wife also went bankrupt and although you can not take you student loans in the bankrupcy there is a way after bankrupcy to do it, it will require you to take them to court which your trustee can help you with.
As far as your credit goes now like you said it screwed and will most likly take you seven years to pay off the debit anyway so why throw good money away, go bankrupt and in the end start over it may be with high interest loans or secured credit but as long as you take care of it you will benifit in the end.


GOOD LUCK

[Insane]

I've been out of school since 06. I've stretched out my federal debt to a 13 year term which HAS reduced the payments to a level that I can make most months and I'm essentially turning over all my tax returns directly to them which is helping... a little. It's slowly whiddling down. Eventually I think the best thing, once I've exusted all the relief I can get through CSL's programs would be to consolidate both loans into one if I can get a debt consolidation loan for student loans and I'm pretty sure I'm nearing that point.

Unfortunately a lot of debt aid and even credit counciling programs won't help you with student loans which really sucks since I think student debt is probably the BIGGEST problem this country has.

It's 7 years post graduation before you can claim student loans in a bankruptcy. You can do it earlier if you can demonstrate hardship and you aren't using your degree (or never got it!)

But it's really different now. Interest relief doesn't exist per say. It's all about affordable payments. So you'll never run out of options. Check out www.canlearn.ca

[CICA-Team]

Sometimes a bankruptcy may not be the best option. You really have to be careful as some "lawyers" may make lots of promises and then your case stalls....Bankruptcy discharge in 9months is usually for first time bankrupts and for persons who do not have surplus income....(make less than $ 1,800 or so a months - for individuals).

Also, it takes about 4 years to get the credit rebuild...You can buy a house with 20% down regardless of the credit.

Hope this helps.


"Information provided is for educational purposes only and does not constitute legal advice of any kind. Please consult a qualified professional about your personal case."

[vibrantflame]

I don't know all of the intricate details, but I do know that you can get a credit card well before 7 years. Husband and I both bankrupted a few years back, and about 6 months ago husband got a credit card through Capital One. You just have to read the eligibility rules first, and make sure that they except people who have declared bankruptcy.

Also, if you do decide to bankrupt (I'm not saying you should, but if you do) I would suggest going to Paddon and Yorke at least for a consultation. if they are in your area. We went through them and they were fantastic. They offered us a payment plan instead of having to pay the entire amount of the bankruptcy costs right away, they made sure that we claimed everything we could under the bankruptcy, and just took really good care of us.