Question: Here’s the deal….my husband has been out of work for a year and a half and debt is piling on top of debt. I make approx. $2200 a month but am now laid off for the summer months. We are barely managing our day to day bills (mortgage, car payments, insurance) and are hardly ever able to pay external bills such as phone, cable, hydro, etc. And that doesn’t even touch our credit card bills (between us we have about $25 000). What do I do?? I don’t know if bankruptcy is the right option. I want to keep our house and I need a car for work. Please help. I am at a loss.
Answer: Before worrying about whether or not to go bankrupt, the first step is to get your expenses as low as possible. With the recession it’s possible it will take a while longer for your husband to find a job, so expense reduction is critical.
You want to keep the house, but if you don’t have enough money coming in each month to pay the mortgage, that may not be possible. You may need to consider selling the house to reduce costs, and find a place to rent. You could also consider taking in a boarder to help with the costs.
The next item on the list is your car. You need a car for work, but not necessarily the car you have now. You could consider selling the car to pay off the loan, and replacing it with a less expensive used car.
These are just suggestions, since I don’t know what you are paying for your house and your car, and whether or not it’s possible to replace them with a less expensive alternative.
Once you have your expenses under control, then it will be necessary to consider options for dealing with your debts. The most common reason for filing bankruptcy in Ontario is to prevent your wages from being garnisheed. If you are both not working at the moment, it may not be necessary to file bankruptcy until you are back to work.
If your husband returns to work, a consumer proposal may be a better option.
For more specific advice, contact a licensed Ontario bankruptcy trustee who will help you evaluate your options and decide on the best course of action.