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In order to come to some plan to resolve your problems there are certain factors that have to be considered. How these factors relate to each other will determine your best course of action. The factors are.
1.How much you owe, and to whom and for what?
2.What you own that could be turned into money, and how much money it could be turned into, and do you want to keep some or all of this stuff?
3.How much income comes into the household every month?
4.How much do you spend each month just to pay your living expenses?
The first factor is important because not all debts can be resolved by bankruptcy. Student loans less than 10 years old, Co-signed debts, fines and restitution orders for example can’t be discharged in most cases.
The second factor indicates what you own, if you own little but can’t pay your debts, then likely bankruptcy is an option worth looking at. If you own a house, cars and investments like RRSPs that you want to keep then perhaps a Proposal would be a better option. Often filing a proposal will allow you to keep your house and the other things you own while still resolving your debt problems.
The third factor is important in that the amount that a bankruptcy will cost you is tied to the amount of money coming into the household. If you have a good income coming in then bankruptcy may be expensive, again a proposal may be a better option. A proposal will cost you more in the long run, but you can pay the proposal amount out over a longer term, allowing it to fit in the budget better.
The final factor indicates how much money is available to put towards resolving your problems. If you are spending more than you make just paying for your basic expenses before servicing you debts, a proposal won’t work for you, you have to show how you can afford to pay for it before the people you owe money to will accept the deal. In this case filing bankruptcy combined with tough budgeting will enable you to get your fresh start.
If you have questions about what you should do call 310-PLAN and one of our trustees will review your situation and help you come up with a plan.
posted by Brian McIlmoyle @ 11:31 AM
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