Question: I have been in serious debt for aproximately 3 years, and I have gotten a second job to try to pay the debt down, but I am struggling more now than before. I make approx $2800/m after tax. My monthly debt payments are approx 2400 including insurance, rent, utilities, and credit card/ loan debt. That does not include food, gas, etc. I am unable to get a consolidation loan as my debt servicing is too high, and I’m running out of ideas on how to pay things down. Of the $70,000 I owe, 47,000 is on a secured vehicle loan in which they consolidated some of my debt. The vehicle is worth max $20k. I am only 27, and I am unable to purchase a home/condo as I owe too much, and I have been considering bankruptcy for over a year now. I have a few questions. 1) Is it worthwhile to file bankruptcy? 2) If I was to file bankruptcy, would my employer be notified? 3) What would happen with my vehicle? Thank you in advance for your assistance.
Answer: Filing bankruptcy in Ontario is a possible option, but given your income you should also consider a consumer proposal. Your employer would not automatically be notified, unless your wages were being garnisheed.
As for your vehicle, it would depend on the lender. However, since the vehicle is worth $20,000 and the loan is $47,000, it would probably make more sense to surrender the vehicle and include the entire debt in the proposal or bankruptcy. Obviously you would need a replacement car before filing.
There are a number of ways to accomplish this, so we suggest you contact an Ontario Bankruptcy Trustee for a free initial consultation to review your situation in more detail.