Debt Settlement - UnSecured Debts Need Advice - Canada

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RE: UnSecured Debts Need Advice

Postby Adam1988 » Wed Aug 20, 2008 09:57:03 AM

Check out Canada Debt Settlements. As in I didnt get a chance to read this whole thread, their website is informative & I had a good experience with them.

http://www.canadadebtsettlements.com
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RE: UnSecured Debts Need Advice

Postby Ottawa_Chap » Thu Jul 03, 2008 08:06:47 AM

Bill,

With respect to your comment: "At least one (MBNA) is threatening to write their debt off at the end of the month... which likely means then it would be in the hands of a collection agency." Here's what I can tell you..

I owe/d MBNA ~12k. Approximately 3 months ago the account was sent to collections. Before it went to collections, they offered to settle the account for 15% of its value. When I explained that I still couldn’t afford this, the account was charged off and sent to their internal "recovery" department where I was again offered a settlement, this time for a figure between 20-25%. That settlement offer was fairly open-termed; i.e. they just wanted cash coming in, MBNA were not going to charge me interest and I ultimately had the liberty (within reason) to select the monthly payment amount.

Funds were still tight and I wasn't sure what I'd be doing to address all these debts, so I held off on submitting any payments and now the account is in collections - where the 3rd party collectors are demanding the full amount.

MBNA Credit Cards Canada

What I learned from this is that if a bank is prepared to settle for 15% of the balance, then they are not receiving much from the 3rd party agencies when the debt is sold. Therefore, it could be wise to refrain from offering any more then 10-20% when you start settlement negotiations. Project the appearance to the collectors that this is the maximum they will receive, and that it'd be worthwhile for them to accept this amount today as the offer may not exist in "30days" time (pick your timeframe).

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Infuriating one C/A at a time..
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RE: UnSecured Debts Need Advice

Postby blawrence » Thu Jul 03, 2008 03:38:02 AM

Monty - I had a conversation with credit counselling a number of months ago and was informed that in my province, wage garnishment can't be done by anybody but a government entity. That could be been a load of BS or wrong but I normally trust the credit counselling guys.

The debt is spread over 4 creditors. 1 line of credit, 3 credit cards.
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RE: UnSecured Debts Need Advice

Postby montyloree » Mon Jun 30, 2008 07:57:58 AM

Hey blawrence,
How many credit cards / lines of credit is the debt spread over?

The worst that can happen is the creditors get a judgment against you. Then they'll garnish your wages etc.

My advice is if you're not going to declare bankruptcy, tell the creditors to back off. You're in control, because they're waiting for your money. It's good to tell them about your situation and try to develop open communications. If that fails, tell them to back off. If you seriously can't pay, I would recommend debt settlement as an option.

Debt settlement is harsh on your credit rating, however, it sounds like that's the least of your worries right at the moment.
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UnSecured Debts Need Advice

Postby blawrence » Sun Jun 29, 2008 07:14:33 AM

Hoping for some good advice.

I got into more debt that I could afford a couple of years ago while I was going through some major changes in my life. I have approximately 30K of unsecured debt which I'm unable to service while feeding my family, making my mortgage payment and paying my utility bills.

I want to avoid bankruptcy, as I've never heard good things about the amount of paperwork involved.

I've finally gotten into a budget pattern where I can manage without overspending, and I will have my utility bills at par within a couple of months. I want to do a formal credit proposal to make a 300-350 payment stating in Late August/September of this year (when I will start to be able to afford it)

Problem is credit card companies are getting impatient. I haven't been able to pay much of anything since I was discharged from Credit Counselling 6 months ago (Those payments were unrealistic.. in the range of $650-700/month) At least one (MBNA) is threatening to write their debt off at the end of the month... which likely means then it would be in the hands of a collection agency. I don't imagine my other creditors (Citibank, HSBC and Scotiabank) are any happier and will probably go the same route.

I have negative equity in my home at the moment, as I only bought 2 years ago and my property value I believe has gone down. I have a small vehicle which wouldn't sell for more than $2000 and might not last more than a couple more years (That's one of my biggest concerns). I have no assets that could be liquidated that I haven't already done. I have come as far as I can to meet my obligations.

Two part question:

A) What do I need to do between now and August to put myself in the best possible position for making a proposal?

B) What's the worst that can happen here?

C) What am I not thinking of?

I would appreciate any help. I need to figure this out and get into a pattern as this is causing a lot of stress on everyone and I just want to get beyond it, or get on the road to getting beyond it... preferably without bankruptcy.

PS : If anyone has experience with bankruptcy and thinks that I'm wrong, feel free to play devil's advocate.

Ben Lawrence

MBNA Canada
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