debt and brankruptcy

addy

addy

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Trusted Member
Have acquired a large amount of debt (30 grand) over the years from injuries preventing me from working consistently and stupid spending habits/bad money management. Ive been speaking to a debt trustee about my options and I have two, file for bankruptcy or open a consumer proposal which are similar in some ways.

Bankruptcy for those who don't know is you don't pay any of your debt back, they look at your assets and make sure you're not hiding any c63 AMGs, your credit rating is fucked for 7 years after. Some other things I'm forgetting but that's essentially it.

A consumer proposal is where you pay about 50% of your debt back, none of your assets are a factor, and your credit rating is only fucked for about 3 years STARTING the day you pay that 50% back.

Because I have assets like cars and guns I'm sort of leaning towards a consumer proposal. But someone said I should be careful and possibly reconsider that because it may be very difficult to get a mortgage/rent a place down the road.

With the current state of this country and the fact nobodies bank account is truly safe anymore I'm wondering what your guys thoughts are on the matter? I was thinking if I do a consumer proposal, become debt free, I will still have money left over because it's only 50% of the 30 grand I currently owe and then I could put the rest of my money into some sort of crypto.
 
I went for bankruptcy.

As soon as the bankruptcy period was over, can't remember how long it was, my trustee set me up with a credit card ($500), and I was able to secure a car loan. (Super high interest.) But it got the job done. By the time my 7 years was up I had already rebuilt my credit

Get a good trustee who specializes in Bankruptcy. I used A. Farber and Associates. After our first consultation, I had no worries. One creditor called soon after. I directed them to my trustee and never heard from them or any of them again.

I'm much smarter about money now....
 
addy said:
Have acquired a large amount of debt (30 grand) over the years from injuries preventing me from working consistently and stupid spending habits/bad money management. Ive been speaking to a debt trustee about my options and I have two, file for bankruptcy or open a consumer proposal which are similar in some ways.

Bankruptcy for those who don't know is you don't pay any of your debt back, they look at your assets and make sure you're not hiding any c63 AMGs, your credit rating is fucked for 7 years after. Some other things I'm forgetting but that's essentially it.

A consumer proposal is where you pay about 50% of your debt back, none of your assets are a factor, and your credit rating is only fucked for about 3 years STARTING the day you pay that 50% back.

Because I have assets like cars and guns I'm sort of leaning towards a consumer proposal. But someone said I should be careful and possibly reconsider that because it may be very difficult to get a mortgage/rent a place down the road.

With the current state of this country and the fact nobodies bank account is truly safe anymore I'm wondering what your guys thoughts are on the matter? I was thinking if I do a consumer proposal, become debt free, I will still have money left over because it's only 50% of the 30 grand I currently owe and then I could put the rest of my money into some sort of crypto.
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Consumer proposal will not pay off any government debt, fines, taxes or student loans only bankruptcy will. It has to be 7 years after your last day of study before student loans can be filed. It's never gaurenteed you have to go to court and plead your case in front of a judge. And any fucking loser financial advisor who says 3 years of bad credit from a consumer proposal is a straight up liar. It's 3 years officially after the last day you've paid every cent you agreed upon and honestly I know from experience that most banks for loans and mortgages won't help you for 7 years. Only high interest crooks like capital one and those fast loan car places. Becareful what u choose because my credits still fucked and banks won't touch me for 7 years they said
 
Jerbear said:
Consumer proposal will not pay off any government debt, fines, taxes or student loans only bankruptcy will.
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Well this is worrying info.. I have quite a bit of debt from taxes and my debt trustee hasn't mentioned once any issues in regards to taxes with doing a consumer proposal. I will call her soon and confirm this.
 
addy said:
Well this is worrying info.. I have quite a bit of debt from taxes and my debt trustee hasn't mentioned once any issues in regards to taxes with doing a consumer proposal. I will call her soon and confirm this.
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I'd double check with him and research it. I know my fines and student loans weren't covered but taxes may be different I didn't owe taxes but I feel like they told me all government stuff is still owed. I may be wrong about taxes though so double check for sure.
 
I spoke with the CRA collections just yesterday and got on an agreement to pay monthly because I couldn’t pay in full. You can make arrangements that suit you. They said you can make payments as little as $50 a month and pay as much as you like any time to pay off everything. Don’t ruin your credit score, 7 years is a long time. You never know how and when life might take a turn for the better.
 
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No offence but $30k is nothing.

Goto the bank get an unsecured LofC and pay it down over 5-6 years.

When you file for bankruptcy once your credit is restored you start at zero. I personally don’t think it’s worth it.

Go rob a bank as you‘d probably only get five years if you don’t have a weapon.
 
The Old Guy said:
No offence but $30k is nothing.

Goto the bank get an unsecured LofC and pay it down over 5-6 years.

When you file for bankruptcy once your credit is restored you start at zero. I personally don’t think it’s worth it.

Go rob a bank as you‘d probably only get five years if you don’t have a weapon.
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30k is sort of a lot when you only make 30/hour and live in the 2nd most expensive city in the world. Also the consumer proposal is only 3 years bad credit. I don't really qualify for bankruptcy due to my assets which I refuse to sell.
 
The Old Guy said:
No offence but $30k is nothing.

Goto the bank get an unsecured LofC and pay it down over 5-6 years.

When you file for bankruptcy once your credit is restored you start at zero. I personally don’t think it’s worth it.

Go rob a bank as you‘d probably only get five years if you don’t have a weapon.
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This is what I was thinking... $30k is literally peanuts. I'm sure you can find a bank willing to help you out with a Personal Loan.
 
addy said:
Have acquired a large amount of debt (30 grand) over the years from injuries preventing me from working consistently and stupid spending habits/bad money management. Ive been speaking to a debt trustee about my options and I have two, file for bankruptcy or open a consumer proposal which are similar in some ways.

Bankruptcy for those who don't know is you don't pay any of your debt back, they look at your assets and make sure you're not hiding any c63 AMGs, your credit rating is fucked for 7 years after. Some other things I'm forgetting but that's essentially it.

A consumer proposal is where you pay about 50% of your debt back, none of your assets are a factor, and your credit rating is only fucked for about 3 years STARTING the day you pay that 50% back.

Because I have assets like cars and guns I'm sort of leaning towards a consumer proposal. But someone said I should be careful and possibly reconsider that because it may be very difficult to get a mortgage/rent a place down the road.

With the current state of this country and the fact nobodies bank account is truly safe anymore I'm wondering what your guys thoughts are on the matter? I was thinking if I do a consumer proposal, become debt free, I will still have money left over because it's only 50% of the 30 grand I currently owe and then I could put the rest of my money into some sort of crypto.
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If you have a steady job, do the LOC as suggest by @The Old Guy....I've done this in the past, but both me and my fiance (now wife) had steady jobs with benefits and bonuses, so we were able to consolidate and pay it slow and steady.

In case job security is an issue then Bankruptcy can give you a fresh start with wiping all the debt. My friend did this in his early 20s after losing his business due to a shady partner and lack of experience but was able to recover and now owns a bunch of properties.

What is best for you, may not be best for debt trustee or the bank...look out 10 years and make the decision based on that timeline brother.

Best wishes and you can do this!
 
fcinter said:
If you have a steady job, do the LOC as suggest by @The Old Guy....I've done this in the past, but both me and my fiance (now wife) had steady jobs with benefits and bonuses, so we were able to consolidate and pay it slow and steady.

In case job security is an issue then Bankruptcy can give you a fresh start with wiping all the debt. My friend did this in his early 20s after losing his business due to a shady partner and lack of experience but was able to recover and now owns a bunch of properties.

What is best for you, may not be best for debt trustee or the bank...look out 10 years and make the decision based on that timeline brother.

Best wishes and you can do this!
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Thank you. Sorry I should have realized what a LofC is, line of credit of course. I actually owe 10k from a LoC. I should probably break down my debt for everyone

10k - LoC
5k - credit card
15k - CRA taxes
Jerbear said:
Yea or maybe re-finance your house like take out a second mortgage
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I live in some shitty apartment paying 1500 a month lol
 
addy said:
Thank you. Sorry I should have realized what a LofC is, line of credit of course. I actually owe 10k from a LoC. I should probably break down my debt for everyone

10k - LoC
5k - credit card
15k - CRA taxes

I live in some shitty apartment paying 1500 a month lol
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In this case a 'consolidation loan' is also an option, as long as you can show steady income with paystubs and tax docs for last two years.

That was one of the options when I went to the bank but opted for LOC for the flexibility.
 
One of the big questions is are you working now and are you generating positive cash flow after all your living expenses? If so, you should be able to consolidate the loans and hopefully you can afford the negotiated a payment plan. Another consideration is reducing expenses. You say you pay rent 1500$ a month, do you have a couple of people you can get a place to minimize your rent? Analyze what your spending your money on and figure out if their are ways to reduce various expenses. For instance I use to buy 4 Tim's coffee a day. I calculated that out for a month and it was about 300$. I cut that out. I had insurance on various things... car, small house ... I check other insurance companies and was able to save about 1000$ a year. Not sure if this helps but is way I got a hold of my spending and was able to save.
 
I don’t know if things have changed, but when my wife and I got together, her husband let everything go and declared bankruptcy and she had to as well (he was the one making all the money) anyhow after her time was up where she had to pay back that certian amount, like in a year, I put a charge card in her name under my name and she used it. A year later she had her own charge card. Couple years after that her credit was the same as mine. I have extremely good credit, I just checked and 889.
‘Now mind you this was also 1996
 
I know this is an older post but I just paid off my consumer proposal, I got stuck with all the consumer debt to the tune of 44 K it cost me $325 biweekly, you won't be able to buy a house atleast with normal rates but I'm sure there are compaines that will loan at massive interst rates, I was able to buy a truck and get a credit card but the rates where higher for sure.

They aren't being honest about how the proposal works, they have to submit a repayment plan to your lenders in my case RBC was the biggest lender so I ended paying them back dollar for dollar and then others got about 70 cents on the dollar, you need the majority to vote on it.

In a bankruptcy I was only allowed to keep 2200 a month minus my support payments off my cheque and any OT they took 50% per shift. Bromwhich and Smith did mine in Alberta, I make good money but at the time 4 years ago I was paying 4000K a month support so I had to bite the bullet.
 
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addy said:
30k is sort of a lot when you only make 30/hour and live in the 2nd most expensive city in the world. Also the consumer proposal is only 3 years bad credit. I don't really qualify for bankruptcy due to my assets which I refuse to sell.
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It’s 3 years bad credit plus the 3 years while you are on your consumer proposal. Scores are recorded as an R7 on your file the minute the agency starts recording your consumer proposal payments. For the most part loans, mortgages etc can still be obtained but will be higher interest. I did a consumer proposal and although it was the best thing for me at the time, had I been able to secure a line of credit on my own I would have much rather gone that route. Bankruptcy in my case was not an option due to my job. I had roughly 10k worth of debt. Maybe a little more. My monthly payment was 484 a month. So take that number and times it by 3 and you are looking at roughly 1400 a month for a payment. Had I know what I do now, I would have called the debtors myself and negotiated payment plans on my own behalf in exchange for a pay for deletion on my files. This would have allowed my credit to rebuild faster. Even now, 1 year after my payments were completed I have trouble getting my credit score into the 680s despite having no debt asides from a car loan and 1 credit card in good standing.
 
I know old thread... But for the OP, wondering if you can get a roommate. You might need to find a 2 or 3 bedroom place if you only have 1 bedroom now, but the more ppl in the house the cheaper it usually is rent wise. I've had many roomamtes over the years and after about 10 years of roommates, I couldn't stomach another one, but if it means paying your debt off, it might be worth sucking up.

Also, what about a side cash job? Seems like might not be worth it, but find something you can do for cash and put an ad up and ask around.. There is companies who will pay cash if you ask.. Find a local small contracting outfit and ask if you could help out for cash on your off days.. An extra 500$ in the hand at the end of the month is huge when paying off debt. Even being an Uber driver on your days off woudl help...

I know all my suggestions are not what anyone would likely want to do, but sometimes you got to suck it up for a bit to get yourself ahead.
 
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