Difference between revisions of "I Don't Have Enough Money to Pay My Debts"

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If you cannot pay your debts:
 
If you cannot pay your debts:
 
# Contact the creditors. If necessary, see if you can negotiate a different repayment plan with each of them. For example, they may give you more time.
 
# Contact the creditors. If necessary, see if you can negotiate a different repayment plan with each of them. For example, they may give you more time.
# If the creditors won’t agree, see if you can get a '''consolidation loan''' from your bank or credit union to put all the debts together at a lower interest rate than you are now paying. There are for-profit as well as not-for-profit Credit Counselling Services that can assist you in planning and applying for such a loan. [See [[Credit Counselling Society of BC]] in Part 2 of this Guide.]
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# If the creditors won’t agree, see if you can get a '''consolidation loan''' from your bank or credit union to put all the debts together at a lower interest rate than you are now paying. Seek the assistance of a not-for-profit credit counselling agency that can assist you in planning and applying for such a loan. See [[Credit Counselling Society of BC]] in the [[Resource List]].
# If you cannot negotiate a repayment plan or arrange a consolidation loan, you should speak with a credit counsellor about some of the options under the Bankruptcy and Insolvency Act, including:
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# If you cannot negotiate a repayment plan or arrange a consolidation loan, you should speak with a credit counsellor about some of the options under the ''Bankruptcy and Insolvency Act'', including:
#* '''Proposals'''; and
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#* '''proposals''', and
#* '''Bankruptcy'''.
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#* '''bankruptcy'''.
  
 
== What happens next? ==
 
== What happens next? ==
If you pursue a formal '''Proposal''' or '''Bankruptcy''' itself, you will need a Trustee in Bankruptcy to assist you. [Try the Yellow pages of your phone book under “Bankruptcy” or see [[Bankruptcy BC]] in Part 2 of this Guide for contact information for Trustees in Bankruptcy]. Most of your creditors will have to agree to a formal Proposal. In a Bankruptcy, your assets (except for necessities like clothing, medical aids, furniture, appliances, work tools, an inexpensive vehicle and sometimes your residence) are turned over to your Trustee, who will use them to pay off some of your debts. Once you are “discharged” from bankruptcy (usually after 9 months) the bankruptcy debts will be cancelled. You will find it difficult to borrow money for a number of years after a bankruptcy.
+
If you pursue a formal '''Proposal''' or '''Bankruptcy''' itself, you must have a Trustee in Bankruptcy to assist you. [Try the Yellow pages of your phone book under “Bankruptcy” or see [[Bankruptcy BC]] in the [[Resource List]] for contact information for Trustees in Bankruptcy]. Most of your creditors will have to agree to a formal Proposal. In a Bankruptcy, your assets (except for necessities like clothing, medical aids, furniture, appliances, work tools, an inexpensive vehicle and sometimes your residence) are turned over to your Trustee, who will use them to pay off some of your debts. Once you are “discharged” from bankruptcy (usually after 9 months) the bankruptcy debts will be cancelled. It will take some time after the bankruptcy for you to re-establish your credit.
  
 
== Where to get help ==
 
== Where to get help ==
See the [[Resource Guide]] in Part 2 for a list of helpful resources. Your best bets are:
+
See the [[Resource List]] for a list of helpful resources. Your best bets are:
 
* [[Credit Counselling Society of BC]].
 
* [[Credit Counselling Society of BC]].
 
* [[Bankruptcy BC]].
 
* [[Bankruptcy BC]].
 
* [[PovNet]].
 
* [[PovNet]].
* [[Access Justice]], [[Lawyer Referral Service]], [[Salvation Army Pro Bono Lawyer Consultation Program]], [[Private Bar Lawyers]].
+
* [[Access Pro Bono]], [[Lawyer Referral Service]], [[Salvation Army Pro Bono Lawyer Consultation Program]], [[Private Bar Lawyers]].
*[[Law Students’ Legal Advice Program]]. (See Chapter 10, “Creditors’ Remedies and Debtors’ Assistance, for useful information on “Getting Out of Debt”.)
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* Law Students’ Legal Advice Program Manual, see Chapter 10- [http://www.clicklaw.bc.ca/resource/1727 “Creditors’ Remedies and Debtors’ Assistance] for useful information on “Getting Out of Debt”.)
 +
* See the Clicklaw common question [http://www.clicklaw.bc.ca/question/commonquestion/1014 "I’m thinking about declaring bankruptcy"] for a few more resources on bankruptcy.
  
Before meeting with a lawyer or advocate, complete the form [[Preparing for Your Interview]] in Part 3 of this Guide. Make sure you bring copies of all documents relating to your case.
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Before meeting with a lawyer or advocate, complete the form [[Preparing for Your Interview]] included in this Guide. Make sure you bring copies of all documents relating to your case.
 +
 
 +
{{Template:Legal Help Guide Disclaimer}}
 
{{Template:Legal Help Guide Navbox|type=problems}}
 
{{Template:Legal Help Guide Navbox|type=problems}}

Revision as of 18:01, 29 December 2011

Debt is one of the most common sources of legal problems. The problem is made worse when you try to ignore the debt and your creditors (the people trying to collect from you).

First steps[edit]

If you cannot pay your debts:

  1. Contact the creditors. If necessary, see if you can negotiate a different repayment plan with each of them. For example, they may give you more time.
  2. If the creditors won’t agree, see if you can get a consolidation loan from your bank or credit union to put all the debts together at a lower interest rate than you are now paying. Seek the assistance of a not-for-profit credit counselling agency that can assist you in planning and applying for such a loan. See Credit Counselling Society of BC in the Resource List.
  3. If you cannot negotiate a repayment plan or arrange a consolidation loan, you should speak with a credit counsellor about some of the options under the Bankruptcy and Insolvency Act, including:
    • proposals, and
    • bankruptcy.

What happens next?[edit]

If you pursue a formal Proposal or Bankruptcy itself, you must have a Trustee in Bankruptcy to assist you. [Try the Yellow pages of your phone book under “Bankruptcy” or see Bankruptcy BC in the Resource List for contact information for Trustees in Bankruptcy]. Most of your creditors will have to agree to a formal Proposal. In a Bankruptcy, your assets (except for necessities like clothing, medical aids, furniture, appliances, work tools, an inexpensive vehicle and sometimes your residence) are turned over to your Trustee, who will use them to pay off some of your debts. Once you are “discharged” from bankruptcy (usually after 9 months) the bankruptcy debts will be cancelled. It will take some time after the bankruptcy for you to re-establish your credit.

Where to get help[edit]

See the Resource List for a list of helpful resources. Your best bets are:

Before meeting with a lawyer or advocate, complete the form Preparing for Your Interview included in this Guide. Make sure you bring copies of all documents relating to your case.