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  #1  
Old 02-08-2007, 03:36 AM
KingSonic KingSonic is offline
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Default Need serious help concerning bankruptcy

Hello everyone,

I am new here. I live in Canada and I am a university student (ironically, a Major in Finance). So here is the scenario: I am drowned deep in debt with no way out. I have had these credit cards since 2002. Here is what I owe as of now:

VISA (Bank 1): $4440 (credit limit $4000)
VISA (Bank 2): $1550 (credit limit $1500)
VISA (Bank 3): $4900 (credit limit $4000)
Student Loan: $5000
Parents and others: $12,000 (I worry about this part the least)

That's almost $30,000 in debt and I am not even working. But here is the most serious part:

Each month I am being charged heavy interests and over-limit fees on my credit cards, sure I am able to make some payments here and there but the way these people steal money is worst than the devil. Let's take a look (at about 11.5%/12 per month):

VISA1:$42.55 +$20 overlimit fee =$62.55
VISA2:$14.85 +$15 overlimit fee =$59.85
VISA3:$46.96 +$20 overlimit fee =$66.96
All that is COMPOUND interest.
Student Loan: About $30 per month.

That's $219.36 PER MONTH (or $2632.32 a year) that I am pissing out, not funny at all.

So I was considering filing for Bankruptcy because else I will be spending the next 10 years of my life enslaving over paying ridiculous amounts of free money to these unimaginable bastards. My bank calls me the other day and tells me "Sir are you aware that you are over your limit? Is there a reason why you are over your limit?" Well YEAH, because of accumulating interests and because you keep on charging me overlimit fees that I am unable to catch up with. Bank rep:"But that fee is our legal right to take". Of course they have the law on their side. Mind you I never signed up for the overlimit fee, it only came as of effect sometime in 2004. They changed their policy over-night without me signing for it.

My question is: What effects will filing bankruptcy have on me? I do not pocess any assets at the moment. I did have a job a few months back, and I realized that everything I earned I was giving it to them in terms of interests and injust fees.

Thank you so much for any invaluable advice you can get to me, meanwhile I will be browsing around the web for more adivce.
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  #2  
Old 02-12-2007, 07:48 AM
brian brian is offline
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Default Re: Need serious help concerning bankruptcy

Hi KingSonic and welcome to The Finance Forums.

As for your debt situation - two things stand out:

1. If you're not working, you've no way to work off your debts
2. What sort of budgeting plan have you in place to prevent your spending continuing to move out of control?

Maybe bankruptcy could be an option, but if you go that route I assure you, it will bite you in the ass in future - probably when you least need it.

I think what you really need to do is to take responsibility for your debts and learn to manage them. Firstly, that means getting a job and working to ensure you've got an income to pay off your debts at a suitable pace. It doesn't matter what sort of job it is - you need an income.

Once you have an income, you can look at getting a loan to pay off your credit cards. Although you've bad debt issues already, and may be charged a higher fee for it, it should still be less than the credit card interest charges and overlimit fees. You will almost certainly need a job to get that loan.

Once that's done you should be in a position to manage your debt much better - it's no longer snowballing out of control, and you're in a position to clear it at a measured pace.

It really is up to you to take responsibility and clear it, though - I know if sounds tough at first, but take it one step at a time - and do watch your spending - heck, cut up your credit cards so you're not using them any more and live with a debit card if you can.

Anyway, hope that helps.
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Old 02-12-2007, 12:37 PM
nangel78 nangel78 is offline
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Default Re: Need serious help concerning bankruptcy

I would get a job too. That will help lower the debts and keep you from having to file bankruptcy.
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Old 02-12-2007, 10:25 PM
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taiarain taiarain is offline
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Default Re: Need serious help concerning bankruptcy

Yep, you need a job and you need it yesterday.

Bank 2 Visa is closest to its limit, get that bad boy far enough under the limit that interest won't put you over again and then stick to minimum payments for a while.

Follow suit with Bank 1 Visa, then Bank 3 Visa.

Bankruptcy is not the answer. Paying down your debts is.

Here's what will happen: Your credit score will rise just a smidge each time you get a card back to within its limit. Making your payments on time will drive it up further. Within a year or two, the improvements in your credit score should allow you to negotiate interest rates with your CC companies. Improving your interest rate will allow you to pay down your debts faster.

Focus on the credit card debt first while making your student loan payments. Once the CC debt is cleared, focust on driving down the student loan debt while repaying the personal loans. Once the student loan is repaid, make it your mission in life to repay the personal loans.

The simple, yet cold, fact is that you don't need to file bankruptcy - you need to find an employer. You might want to consider two jobs at first so you can get those cards to within their limits. Or start selling off your possessions.
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Old 02-15-2007, 10:48 AM
nangel78 nangel78 is offline
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Default Re: Need serious help concerning bankruptcy

Definitely go through your things and see if there are things you can do away with and sell them. Cut back on spending. If you do not need it, then do not get it. If you do not have the cash for it, do not get it.
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Old 02-16-2007, 06:26 PM
KingSonic KingSonic is offline
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Default Re: Need serious help concerning bankruptcy

Thanks guys. I would buy and sell stuff on eBay but I have no eBay account anymore
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Old 02-17-2007, 12:30 PM
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taiarain taiarain is offline
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Default Re: Need serious help concerning bankruptcy

Quote:
Originally Posted by KingSonic View Post
Thanks guys. I would buy and sell stuff on eBay but I have no eBay account anymore
Well, unless you've done something to warrant having your account closed by management, you should be able to re-open it or open a new one.

If, however, you are permanently banned from eBay, you can always try Craigslist.
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Old 02-17-2007, 03:40 PM
brian brian is offline
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Default Re: Need serious help concerning bankruptcy

Besides, I think it's worth underlining that a regular job with a regular income is what you need most right now - you can eBay on an evening to supplement your income if possible.

The most important point is to get that regular pay, to pay off your debts regularly, IMO.
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Old 02-18-2007, 12:47 AM
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kelkat kelkat is offline
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Default Re: Need serious help concerning bankruptcy

Actually, a regular job with a regular income (even if its a part time job since you are a student) will show a good faith effort to your creditors.
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Old 02-19-2007, 07:37 PM
riskey58 riskey58 is offline
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Default Re: Need serious help concerning bankruptcy

I would get a job two if I had to. And I would pay off as much as I could. And forget the extras that you want you can live without them. It is alot better to do this then to go bankrupt. And you will feel alot better about yourself.
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Old 02-19-2007, 08:09 PM
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kelkat kelkat is offline
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Default Re: Need serious help concerning bankruptcy

It seems that most people are in favor of a regular job for paying off the debt. Doing things like selling items on ebay or craigslist could serve as additional payments on the loans.

Make sure that what ever you do, you contact the companies as soon as possible. The longer you wait, the more it will look like you are just trying to avoid what you owe instead of making it right.
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Old 02-19-2007, 09:01 PM
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taiarain taiarain is offline
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Default Re: Need serious help concerning bankruptcy

It sure seems like random strangers on the internet agree with what mom and/or dad must be saying right now...get a job.
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Old 03-24-2007, 09:34 PM
Dru Dru is offline
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Default Re: Need serious help concerning bankruptcy

Think about your options here. For a mere $220/month, $2600/year, you are considering throwing away job opportunities, housing opportunities, credit scores, Lower interest rates, along with your pride and integrity. Having to answer "yes" for the rest of your life on applications asking about bankruptcy, is a huge price to pay, and one you should be very sure is your only option.
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Old 03-27-2007, 05:29 PM
Kestie484 Kestie484 is offline
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Default Re: Need serious help concerning bankruptcy

If I were you, I'd not look at this as $30K of debt. That will make getting out from under seem impossible...it's too overwhelming. Take each debt separately and consider how you can pay each one off, one at a time.

You mentioned that you're a student, but it seems like a job IS feasible. Like many friends, I worked a full-time job throughout my last 2 years of school, and I had a decent courseload so I know that it can be done. If you are living now without a job, then if you do get one, you can pretty much put everything you earn towards your debt. If you can draw at close to $1K a month, you can have at least two of the cards paid down in about 7 or 8 months. By this time next year, you can have the whole CC debt taken care of, and at that time you can start to attack the school loans. $1K a month for about 6 months and you're done. So, give or take a few months, within less than a year and a half from right now, you can be debt free (and then obviously you handle the personal debt). Imagine that...if you continue to make timely payments, in less than 2 years not only will you be debt free, but your credit will still be intact.

My ex-husband declared a BK prior to my meeting him. His debt was discharged in 2002. It will affect his credit until 2012, according to his FICO report. He has terrible trouble getting any credit, even for a store credit card. He can't get a car loan without MAJOR hemming and hawing, and the mortgage rate they quoted him this year was downright laughable. He will always have to acknowledge his BK on any financial forms in the future, even after 2012, and that has the potential to really hurt later.

Look, I'm not saying that you should be punished for your debt. At least you are facing it and not just throwing the bills in the trash. And I do think that we need to do something about the harsh price people continue pay for debt problems many years after the problems have been resolved. And, for many, the simple relief that comes with declaring BK is enough to risk the future unknown. For you, though, I don't think the situation is at that hopeless point.

Also, have you considered debt settlement? A reputable debt settlement company could possibly reduce your debt by as much as 50%. Yes, you will have to pay a fee, and yes, participation in this type of program will negatively effect your credit for the duration of the enrollment, but once you are totally paid off, your credit will slowly improve. It is a *much* gentler alternative to filing bankruptcy, and it might be a option thing to research.

Good luck to you. I have been there...I know how hard it is. But you can dig yourself out.

Last edited by Kestie484; 03-27-2007 at 05:32 PM.
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Old 03-28-2007, 02:24 PM
brian brian is offline
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Default Re: Need serious help concerning bankruptcy

Thanks for the reply, Kestie484 and welcome to The Finance Forums.
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