Dividing such very minimal income for the family needs is a problem. Though you had a job but you’re under employed, you cannot say that there is no poverty exists in your living. More and more Americans struggling on how to cope up with the present economic situation. That means more Americans need payday loans just to get by.

It sounds like you have a lot of equity in the house.
Why not do a settlement with your creditors to see if you can slash the debt to around 50% and then remortgage the house/get a HELOC?

Thank you sir.....I now have a better understanding of it.

Every time a creditor reports to a credit reporting agency, they must assign a rating to that debt obligation. The ratings are shown as "R" for a revolving account ( such as a credit card ) or "I" for an instalment account ( such as a bank loan ). The numbers start at "0" for an account that is usually less than 3 months old ( meaning too new to rate ), then the numbers go from "1" ( meaning the account is current and up to date ) to "9" (meaning the account is in default and has been for 180 days, with comments such as Bad Debt, Unable to Locate, Written Off or Included in Bankruptcy ).. Currently, there is no number "6" in the ratings.

Now here is where the confusion begins. Just because a creditor has assigned a "9" rating to a debt doesn't necessarily mean that this debt has been sold to a collection agency or a debt buyer. It is not uncommon for a creditor to assign a "9" rating to a debt and still retain ownership of that debt. The assignment of a "9" rating to a debt is solely for the purpose of reporting purposes only to a credit reporting agency

Any reader of a Credit Report who sees a debt shown as a "9" rating can only conclude that this debt has been in default for at least 180 days, if not longer. The reader usually has no knowledge of who owns this debt and normally doesn't care.

In regards to a "Right of Setoff", a right that is conferred upon lending institutions and both the Federal and Provincial governments, that right can only be exercised providing the creditor still retains ownership of that debt. Once the ownership of that debt is either sold or transferred to a third party, the original creditor can no longer exercise its "Right of Setoff". However, if the original creditor simply writes off this debt on its books as a "Bad Debt", the creditor still retains the "Right of Setoff" because this debt has NOT been sold or transferred. The writeoff of a debt is simply an accounting entry in order to remove a Bad Debt showing as a current receivable on its Balance Sheet. Again, it is not uncommon for a lending institution to make a partial recovery on a debt that had previously been "written off". In this case, any monies received on a debt that was previously "written off" must be shown as income.

Lending Institutions and governments are notorious for making mistakes and sloppy and incorrect reporting to credit reporting agencies. The same can be said for not exercising their "Right of Setoff". The "Right of Setoff" exercised by a financial institution is not automatic by any means. Defaulted debts must be closely monitored and sometimes they just "fall through the cracks". Lending institutions today are far more customer friendly than they were even 10 years ago and they hesitate to exercise their "Right of Setoff", thereby upsetting a customer, if they can resolve this problem using moral suasion and working with the debtor in a more pervasive manner such as accepting a lesser amount in full settlement of the debt.

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Educating one Consumer at a time

I have a question.
Once a bank has written off a bad debt such as a credit card and claimed whatever tax relief they can from that bad debt, can they still exercise a Right to Setoff.
Why do you not hear of it happening more often. In my case....why did they not try to recover my debt from my savings and investments. Been well over 3 years. Money has been moved now but they had that option....why did they not take it.

I did not suggest that you consider bankruptcy or that you file for bankuptcy.

What I did suggest is that you and your husband contact a Trustee in Bankruptcy and explain your financial situation to him or her. The Trustee will listen to your situation and suggest a possible course of action and explain in detail how it will work.

A Trustee in Bankruptcy has many tools to work with. For example, a Trustee may suggest that you consider Credit Counselling whereby a Credit Counsellor will contact your creditors and attempt to reduce or eliminate the interest on your debts. Or they may suggest a Consumer Proposal which can last up to 5 years and possibly "freeze" all future interest charges on your debts. Or they may believe that your situation is hopeless and suggest that you consider filing for bankruptcy. You are not obligated to accept any course of action that a Trustee suggests to you. But, at least you will have a much clearer picture of what options are available to you and their consequences.

A Trustee in Bankruptcy is dealing with situations like yours all the time. They are usually professional accountants ( i.e. C.A. or C.G.A. ) and have undergone highly specialized training in dealing with people who are deeply in debt.

As I said in my previous post, the consultation is FREE, so what have you got to lose, except your time. As both you and your husband are both retired, spending time with a Trustee to explore your situation may just be the best free investment that you will ever make.

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Educating one Consumer at a time

I dont really understand what you are suggesting.

If I file for bankruptcy dont they take my house?

Because of your financial situation, I would strongly urge you and your husband to contact a Trustee in Bankruptcy either in your home town or close to where you reside. You can find one either listed in the Yellow Pages of your telephone directory or "google" Bankruptcy Canada who will supply a list of trustees all across Canada.

The initial consultation is always free so the price is right. By consulting a Trustee doesn't mean that you are going to make an Assignment in Bankruptcy, but the Trustee will review your financial position and suggest a possible course of action.

A Trustee in Bankruptcy can also administer a Consumer Proposal and he/she can explain to you and your husband exactly what that involves. A bankruptcy should only be contemplated if all other options have been considered and nothing seems workable.

Remember, you are not alone. There are thousands of people all across Canada who are in a financial "jackpot". By consulting with a Trustee in Bankruptcy, at least you will have a clearer understanding of just where you stand and what are your options.

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Educating one Consumer at a time

I am married, 66 years old and my husband is 69 years old. Together, we have about an income of 1700 dollars a month and pay approximately 700 dollars a month mortgage.

I have a mortgage with scotia bank. I have a credit card I owe $20,000 dollars on with scotia bank too, and I transferred part of my balance to another MBNA card because it has less interest. In total I personally owe about 30 thousand dollars on credit cards

My husband owes at least ~30-50 thousand dollars too.

I need help and I dont know what to do. We are over our head, at our age we cant really work, and we cant keep up with payments. How do I negotiate with scotia bank when my mortgage is with them. Wont they just tack on my debt onto my house?

Can anyone help me please?

We racked up this debt when my husband went unemployed, the credit card bills were for food etc. We also put some bills like phone cable etc on our credit cards, this debt is all from "basic needs" things. Now we are unemployed, and old, and just racking up more and more debt.

*Note I am from Manitoba

If you are knowledgeable enough to help, please help me. You would change my life, I have been stressed for at least 7-10 years with this debt, paying minimum balances all the time getting no where.