Separation, Bankruptcy and Credit Card Debt?
My husband of 29 years recently walked out on me and our three girls. I’ve been awarded spousal support and child support through the courts. $400 spousal, and 500.00 Child support ( that ends in two years )
Ever since he left, Oct 1st I have fallen behind on all of my bills, but mostly my two Credit cards which are solely in my name. These are in my name because he had a business bankruptcy about five years ago, and was not able to obtain any credit.These cards are both maxed out to a total of nearly ten thousand dollars, and the phone calls have just begun.I try my best to keep my payments up, but I’m not even meeting the minimum.
Yesterday I received a call from a credit bureau over my Sears charge card and found out that they are charging me an $148.00 a month for an Over Limit Amount !
I phoned them and asked them to stop those extra charges and of course they told me no . They also told me to go into bankruptcy. After 2 days of researching the net, and making phone calls, I find that I could lose my home if I do this?? I am quite mystified at the whole process and wondered if you had some sound advice for me? I have just been in touch with a debt consolidation place, but they said that I would have to make payments of $250.00 per month for FIVE years..
That’s over 3,000 more than i owe right now, and if I had an extra 250.00 I’d be making my credit cards payment with that. I am 53 years of age, have been out of the work force for 16 years ever since we got custody of his grand daughter.
I am also leery of leaving my eldest daughter home alone, she is Down syndrome, and we use wood heat to keep the place warm. I am joint owner of a mobile home with my ex husband, and the three girls live here with me. The mobile is paid off now. I cannot risk losing the roof over our heads by declaring bankruptcy, do you see any way out for me? Should I declare bankruptcy, Debt Consolidation or keep plugging uselessly away?
I live in British Columbia, Canada
Thank you for your responses, much appreciated
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I don't know about the laws in Canada, but I know in the US you can "reaffirm" your home if you file bankruptcty, this way you don't lose it. I wouldn't do the debt consolidation because I have heard a lot of negative things about companies like that. If you don't have any extra money after paying your bills it sounds like bankruptcy is probably your best bet.
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Look to the government for some support, you're likely able to qualify for food stamps / financial assistance at this point. Call your creditors back and ask for hardship assistance. Tell them that you want to pay the bills off, but at this point if they can't be flexible then you're thinking of bankruptcy. That will get some wheels turning a bit more. Don't be afraid to ask for a supervisor if you don't get what you want, this is your future on the line.
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I would suggest you get a loan against the mobile. You can take a long term loan, hopefully within your budget. Use the proceeds of that loan to pay off the credit cards, which are a MUCH higher rate.
But in any credit situation, you will pay more than you owe. The $250 per month option given you by the credit councelling company sounds reasonable. If you pay it off over 5 yrs, of course it'll cost you more than what you owe. If you borrow money off me and only pay it back 5 yrs later, I need something to pay me for that wait.