Potential Issue with Bankruptcy

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timtonruben359

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Potential Issue with Bankruptcy
« on: March 02, 2015, 02:36:25 PM »
My situation is a followings:  I had a good job for a number of years and during that time due to my own poor financial management racked up a considerable amount of debt, but paid all my cards on time and was managing to pay down some debt.  Two years ago I was let go from my job and it took me nearly 6 months to find another position.  During that time I used balance transfers in attempt to have a lower interest rate and to keep my credit in good standing.  It's clear on the credit card statements that the money is going back and forth between the cards and not being spent on anything else.

After finding my new job, which pays less, my bad spending habits returned fueled by a bad breakup.  I've attempted to pay off debt and while I've made all my minimum payments I need help.  I've been seeing a financial adviser and we're both in agreement that either a consumer proposal or bankruptcy might at this point be in my best interest as my minimum payments now chew up a massive part of my income and I'm nearing a point where I cannot reasonably pay them.

My financial adviser is concerned that with balance transfers, cash advances and heavy spending could be viewed as fraudulent by creditors meaning I had no intention not to pay my creditors back....which is not the case at all.  One piece of advise I was given was to stop using my credit cards altogether and continue to make (struggling) my minimum payments for the next several months in an attempt to prove I do have a desire to pay back at least a portion of my debts and to get myself better financial shape as well as on going financial counseling.

I feel like such a fool and a loser for being in this position. I've always been bad with money and I now feel like I can't escape this.  It's a crushing feeling.

I'm afraid to approach a trustee as I feel as though I may not have an option because of spending habits.
« Last Edit: March 02, 2015, 03:41:06 PM by timtonruben359 »

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NotATrust-E

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Re: Potential Issue with Bankruptcy
« Reply #1 on: March 02, 2015, 08:33:17 PM »
According to the Office of the Superintendent of Bankruptcy, there were 118,050 insolvencies by individuals last year - bankruptcies and proposals combined. I'm not sure how concerned you should be. It's not possible that banks and credit card companies could go after large numbers of people. It's entirely possible that the bank would make trouble for you if you've racked up a large amount of debt or you've been involved in a 'Bust-Out' situation (Google it!) or if you had a car loan where the car mysteriously vanished. It's simply not worth their time.

One of the advantages of a proposal is that your pre-bankruptcy financial activity isn't scrutinized in the same way as in a bankruptcy. The trustee puts together a report that outlines the causes of your bankruptcy (that nobody will likely ever read) and it goes off to your creditors. It's my understanding that creditors are concerned about the dollar amounts - your payments and your debts - and that's about it.

For bankruptcy, on the other hand, your conduct gets scrutinized more, particularly by the trustee. If she is concerned that you're hiding assets or money OR that you got credit fradulently, they can make your discharge more difficult to get, or conditional on you paying them more money.

Finally, the longer you wait to do something about it, the longer until you can get back on track, especially if you're considering a proposal. You said that you are nearing a point where you can't reasonably pay your debts back. At this point, you're just accruing more and more debt - which means that every day, your creditors are getting a smaller percentage of their money back. It sounds like you've decided to resolve your debts. I'm not an expert, but it seems like you should see a trustee sooner rather than later.

Just my two cents.

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timtonruben359

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Re: Potential Issue with Bankruptcy
« Reply #2 on: March 03, 2015, 08:56:02 AM »
Thank you NotATrust-E for your advise. You're right I should see a trustee sooner rather than later.  I'm still nervous and ashamed of myself for letting things spiral out of control.  I have nearly $60,000 in debt between 5 credit cards and a line of credit and most of last year transferring balances and supplementing my income with credit on the intention of paying it back, but it was always next month I'll cut back and pay down debt and it just never happened...I have a spending addiction likely as a result of being depressed and being terrible with money in general.



« Last Edit: March 03, 2015, 09:58:42 AM by timtonruben359 »

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timtonruben359

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Re: Potential Issue with Bankruptcy
« Reply #3 on: March 03, 2015, 10:03:00 AM »
Also to follow up on my spending habits, most of it has been on food (groceries and eating out not fancy places), but in the last year I did take two week long trips one to England and the other to Montreal and I'm also afraid of how the spending looks.

I'm so stressed about this now.  I really don't know how to get out.

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lawnpotter

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Re: Potential Issue with Bankruptcy
« Reply #4 on: March 24, 2015, 01:55:16 AM »
Are you a bad person ? no I dont think so. Are you a criminal? no I dont think so ? are you in a financial mess ? Yes I think so. I imagine most every one here can relate to you. I would not spend anymore time with the guilt. You want to move forward so its time to move forward. I would visit a trustee and get the facts. I felt like a loser too but life is tough sometimes and stuff happens to good people. I dont think your spending was fraudulent unless it is proven that you new you were going to jump ship and wanted to have one last party . ( just my opinion but I am not an expert)

 

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