i need better resources for dealing with debt in ontario.
August 20, 2013 6:13 PM Subscribe
I have some bad consumer debt from a period when I was un- and under- employed. I contacted two different professionals for help in sorting it out, and as far as I can tell, they both gave me terrible advice.
First I spoke with a financial planner that a friend referred me to. The planner works for free (she gets paid by selling financial products from the firm she works for). She was very nice, but she told me to get a loan to pay off my debts. Since there's no way I'll be approved for a personal loan, she said I had to get a loan from family. That's not going to happen.
Next, I contacted a non-profit credit counselling service listed on a government site as being reputable. The counsellor that I spoke with basically told me that if I ignored the debt for long enough, it would "drop off" or disappear. She also implied that if they couldn't reach me because they had the wrong number or address, it would "drop off".
I was pretty worried that the interest would keep accruing until it was worthwhile for them to sue me. She assured me that my income is low enough that it is unlikely to happen. Basically she encouraged me to ignore the debt until it goes away.
They both dissuaded me from bankruptcy, and honestly, it's a small enough debt that going into bankruptcy for it seems absurd. Ideally, i'd like to repay it, but the monthly payment I can afford doesn't keep up with the interest anymore.
I have tried contacting the companies and it was... unhelpful, to say the least.
Basically, this advice all sounds to me like terrible advice. Is it terrible advice? If so, what's next?
First I spoke with a financial planner that a friend referred me to. The planner works for free (she gets paid by selling financial products from the firm she works for). She was very nice, but she told me to get a loan to pay off my debts. Since there's no way I'll be approved for a personal loan, she said I had to get a loan from family. That's not going to happen.
Next, I contacted a non-profit credit counselling service listed on a government site as being reputable. The counsellor that I spoke with basically told me that if I ignored the debt for long enough, it would "drop off" or disappear. She also implied that if they couldn't reach me because they had the wrong number or address, it would "drop off".
I was pretty worried that the interest would keep accruing until it was worthwhile for them to sue me. She assured me that my income is low enough that it is unlikely to happen. Basically she encouraged me to ignore the debt until it goes away.
They both dissuaded me from bankruptcy, and honestly, it's a small enough debt that going into bankruptcy for it seems absurd. Ideally, i'd like to repay it, but the monthly payment I can afford doesn't keep up with the interest anymore.
I have tried contacting the companies and it was... unhelpful, to say the least.
Basically, this advice all sounds to me like terrible advice. Is it terrible advice? If so, what's next?
Definitely need more information to be helpful.
Eventually the debt may "go away", in the sense that they no longer want to pursue you for it. However, it will haunt you for at least the next 7 years in terms of higher interest rates, declined credit cards/vehicle loans/mortgages, etc.
I'd try another counselling service. My understanding is that some of them will help you consolidate (I'm assuming by your use of "companies" that there are multiple) your debt and get the interest reduced so that you can pay off the principle in a structured way.
posted by Beacon Inbound at 10:36 PM on August 20, 2013
Eventually the debt may "go away", in the sense that they no longer want to pursue you for it. However, it will haunt you for at least the next 7 years in terms of higher interest rates, declined credit cards/vehicle loans/mortgages, etc.
I'd try another counselling service. My understanding is that some of them will help you consolidate (I'm assuming by your use of "companies" that there are multiple) your debt and get the interest reduced so that you can pay off the principle in a structured way.
posted by Beacon Inbound at 10:36 PM on August 20, 2013
Yes, they should help you to get the interest reduced so that your minimum payments do start paying down the principal.
posted by Ouisch at 7:26 AM on August 21, 2013
posted by Ouisch at 7:26 AM on August 21, 2013
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posted by bq at 7:39 PM on August 20, 2013