Bankruptcy

[Insane]

I've been contemplating it for some time. I have a massive amount of student loans. Of which about 70% could be discharged through bankruptcy (some of it can't as it has been 7yrs since I graduated). I am 4yrs out of university and not that much further ahead and I keep thinking how far ahead am I going to be in 7yrs? I'd have to come up with like a $1000 a month for debt repayment to get that money paid off in 7yrs (plus making payments on the OSAP part that can't be discharged). I keep thinking I am spinning my wheels.

But for 7yrs I am screwed. I won't be able to buy a house (which I desperately want to do, but I've never going to be able to get the downpayment anyways or qualify for a morgage until the debt is gone). I think I might even be messed over if I try to rent a place. Plus would I not be able to have a credit card for 7yrs? It's sorta needed to buy things online, buy airline tickets, ect... Putting my life on hold for 7yrs seems like a long time...but at the same time the debt is putting it on hold too....

As anyone gone through this?

[tjthemanto]

Have You tried Consumer Proposal ..usually its a better option than bankruptcy , if you are not too far in debt ..its a better solution for the creditors too as they atleast get something .

http://www.hoyes.com/consumer-proposals.htm

Advantages of Consumer Proposals

• You can avoid bankruptcy
• You negotiate to repay only a portion of your total debts
• You will not be required to surrender any assets
• Your creditors are restricted from taking any legal action against you
• The majority of wage garnishment orders are immediately stopped
• Interest is frozen on the date that you file
• If accepted by a majority of the dollar value of your creditors, the proposal is binding on ALL of your unsecured creditors
• You do not pay any hidden fees; the proposal administrator is paid from the proceeds of the proposal, so in effect your creditors are paying the cost of filing the proposal

[lecale]

...

[Litesandsirens911]

But for 7yrs I am screwed. I won't be able to buy a house (which I desperately want to do, but I've never going to be able to get the downpayment anyways or qualify for a morgage until the debt is gone).

As anyone gone through this?

My ex husband filed for Bankruptcy 3 years ago...and then 18 months later, he got a 400000 dollar loan to build his own dreamhouse...part was from a bank at a higher interest rate, and 20% was financed through a private lender...he also lost his vehicles, etc...now fast forward 3 years, and he now owns a truck, a car, and has another work truck leased, and still living in the home he has a mortgage on...

So don't discount never owning a home or having ruined credit for 7 years...most first time bankruptcies get a discharge after 1 year I think it is...

[Insane]

Thanks. I guess I've always assumed that since the credit hit lasts 7yrs you are screwed for 7yrs. I thought it meant I couldn't get any credit or do anything for 7yrs, not just to the discharge date.

It's like 70,000 that I could get discharged leaving me 35,000 in OSAP. It's unsecured, so I'm not worried about a cosigner having to pay as I didn't need one. I heard that the hit from a consumer proposal to your credit is just as bad as bankruptcy. But at least OSAP can't ask for money while I am in proposal. But more and more I am realizing that I am not going to get out from under these student loans. When I got them, I thought I would be able to pay them back, but I'm starting to realize I was naive. Honestly, I just want to be able to put it behind me and move on with life.

I took a job in the north to earn more money (but cost of living is higher!). The airline trips aren't to sunny destinations, but just to see family (where they have sun more than 3hrs a day! LOL) once a year.

Thanks for the info.

[lecale]

...

[Insane]

DH has been contemplating bankruptcy too, as we are hanging by our last thread, but if we do, you can only keep 4000.00 worth of household goods, and we have more because of having 4 kids...and also, I gave him a new toolbox and a set of Mastercraft tools for every birthday/Christmas etc...I don't want to see him lose his tools, and I do not want to lose my car, we need both vehicles because we live in the boonies and there isn't really a transit system here to get us both to work or even to get to grocery stores, etc..

I feel your pain, sometimes I wish it would just all go away.

We have 3 kids, but aside from the TV we bought using GC (we asked for GC to christmas and birthdays for a couple of years because we couldn't afford a new TV and we knew ours was on its last legs) I can't imagine our stuff being worth much.

I read somewhere about tools needed to employment being exempt. I know before the bank forclosed on my grandparent's house ( a long sad story) but mom, and aunt and uncle went into the house and packed up everything of value. Maybe you could "sell" his tools to a friend or family member?

I forgot about the car. We've got one and it's in my name. It's got about 21 months left on the loan. With 3 kids a car is a necessity. I wonder if it could be transfered to hubby...I guess I'd better start making a list of questions.

All of hubby's student loans are either OSAP or have a cosigner so there is no point in him declaring bankruptcy.

[Insane]

May we all win Lotto Max this week, amen.

Thanks for all the information and input!

I was saying to my coworkers last week that I wasn't greedy, I don't need 50million, I'll take just 1million!

[tjthemanto]

Thanks. I guess I've always assumed that since the credit hit lasts 7yrs you are screwed for 7yrs. I thought it meant I couldn't get any credit or do anything for 7yrs, not just to the discharge date.

It's like 70,000 that I could get discharged leaving me 35,000 in OSAP. It's unsecured, so I'm not worried about a cosigner having to pay as I didn't need one. I heard that the hit from a consumer proposal to your credit is just as bad as bankruptcy. But at least OSAP can't ask for money while I am in proposal. But more and more I am realizing that I am not going to get out from under these student loans. When I got them, I thought I would be able to pay them back, but I'm starting to realize I was naive. Honestly, I just want to be able to put it behind me and move on with life.

I took a job in the north to earn more money (but cost of living is higher!). The airline trips aren't to sunny destinations, but just to see family (where they have sun more than 3hrs a day! LOL) once a year.

Thanks for the info.

I am not sure but don't they garnishee 50 % of your gross wages , for a year or so or maybe for a longer time after you declare bankruptcy to pay of some of your creditors...or do you start with a clean slate all over again & get to keep all your earnings from your job after the discharge etc .

So the more you make ..maybe the more they GARNISH your wages ..its kind of a Catch - 22 situation , you want to earn more but then you feel that the more I work & the more earn the more they take away from me by WAGE GARNISHMENT so what's the point , I might as well work less & earn less & keep most of it .

[Insane]

I am not sure but don't they garnishee 50 % of your gross wages , for a year or so or maybe for a longer time after you declare bankruptcy to pay of some of your creditors...or do you start with a clean slate all over again & get to keep all your earnings from your job after the discharge etc .

So the more you make ..maybe the more they GARNISH your wages ..its kind of a Catch - 22 situation , you want to earn more but then you feel that the more I work & the more earn the more they take away from me by WAGE GARNISHMENT so what's the point , I might as well work less & earn less & keep most of it .

From what I read, once you are discharged, that's it. During the period before discharge you make payments every month to the trustee. The payments are based on income and family size. I'd have to find out exactly what would be exempt (looks like childcare fees are but I wonder if my OSAP payments would be too since I can't discharge them in bankruptcy). The amount of time you are in bankruptcy depends on these payments. If the payments are less than $100 then it's 9mths, otherwise it's 21mths for a first time bankruptcy. I think I need to talk to a trustee though to get the real info. But honestly, I woke up this morning and I thought maybe there is a way to not be drowning and be all doom and gloom about my financial future.

The screwing over my credit is the scariest part for me.

[jayne_a]

what is an OSAP payment. I'm interested int his thread, but have no idea what it is. I'm from Sask, is it an ontario thing?

[Insane]

ya, it's Ontario Student Assistance Program. It's the government portion of my student loans. The rest of my student loans is a line of credit.

[khipson]

Your best bet is to have a real heart to heart with a reputable trustee. I think you'll find that some of the rules vary by province so the answers you get here may or may not actually be real answers for your particular situation.

How long the hit lasts depends on a whole lot of factors, many of them dependent on you. You will not be able to get a dept store credit card for seven years, nor a card through some of the other lenders like MBNA, they are sticklers. A bank might consider you but probably not. But alternative lenders are happy to take you on if you've played by the rules and done everything you were told. (We were discharged in April and bought a car in August with a reference from our trustee.)

[Insane]

thanks khipson! I contact my employers EAP (employee assistance program) and they are setting me up with a lawyer to ask my questions. They will then give me some references for reputable trustees in my area.

Was the car your first credit after being discharged? What kind of letter did you need?

[super_e]

But for 7yrs I am screwed. I won't be able to buy a house (which I desperately want to do, but I've never going to be able to get the downpayment anyways or qualify for a morgage until the debt is gone). I think I might even be messed over if I try to rent a place. Plus would I not be able to have a credit card for 7yrs? It's sorta needed to buy things online, buy airline tickets, ect... Putting my life on hold for 7yrs seems like a long time...but at the same time the debt is putting it on hold too....

Loans are obligations. You can't expect to wipe-off your obligations without any consequences.
Why not try getting a second (or third) job and paying off all your loans.
Also, stop traveling and only buy what you need. Put all the money you're not spending into paying off your loans. You'll be amazed on how much you can cut-back your spending when you only buy what you need.

Would you loan money to someone who has declared bankruptcy? Why would a bank give you a mortgage or a credit card if you have proven that you won't pay them back?

Good luck!