Question: I saw a bankruptcy counsellor and according to him I can’t afford to go bankrupt. Could this be possible? I owe about $17,000 I’m in collections and I make approx. $23000 gross , but after rent, hydro etc… I don’t even have enough to survive. What can I do??? I am at my wits end
Answer: There is no easy answer to your situation. Based on what you have said, it would appear that your most urgent problem is a cash flow problem, not a debt problem. Your debts are currently in collections, meaning that you have not made payments on them for some time, but even without making payments on your debts you are still having trouble surviving. Bankruptcy is therefore probably not the first strategy you should consider.
Your first goal should be to balance your monthly budget, so that your expenses are slightly less than your income. Obviously in our depressed economy that’s easier said than done. It’s not easy to simply find a higher paying job, but ultimately you have to either reduce your expenses, or increase your income to balance your budget. Once you do that, then you can work on a plan to deal with your debts.
If the debts are in collections and if the creditors are not suing you or garnisheeing your wages, you don’t have to immediately file bankruptcy. You can devote your efforts to improving your cash flow situation, and then deal with the debts.