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