budgeting,  consumer proposal,  credit cards,  personal finance,  student loans

Was in an abusive relationship and owes $50,000

I’m 23 and I was in a long term abusive relationship that severely impacted my finances and put me in a terrible debt situation. I currently have just over $50k in debt, roughly $30k from a car loan that I was pressured into getting into, about $7500 in credit card debt and around $13k in personal loans. I am making around $2300 per month and once all my payments are made (rent, car, insurance, phone, loans, credit cards) I have about $185 left over to cover food, gas and other necessities.

I have good credit, around 750. I’ve never missed a payment but soon it will get to the point where I won’t be able to make my payments…

I am heavily considering doing a consumer proposal as there is no other way for me to get out of this mess. I am also going back to school in January which I will need to get student loans for… is it even possible to secure government student loans while in a consumer proposal?

Would it be best for me to sell my car first before I do the CP? I could get about $20k for my car, maybe more if I sell it privately. That would put my debts at around $30k.

Please help, share experiences. I truly do not know what else I can do at this point. If I were to do the CP it would be around September as I need my car throughout the summer.

My current bi-weekly paycheques are around $1150 My current bi-weekly expenses are as follows- $300 rent $290 car payment $110 car insurance $40 phone $35 gym membership $100 CC’s (minimum payment) $165 personal loans This doesn’t include any food, gas, or personal care items.

Victor Fong, Licensed Insolvency Trustee replies

If you need the car and can maintain the payments, do so. The $20,500 of unsecured debt can be dealt with through a consumer proposal.

If you can afford a monthly consumer proposal payment of $150 over 60 months ($9,000) after paying your living costs (including the car payment) your unsecured creditors might be willing to accept that as a settlement for the $20,500 that they’re owed.

“I am also going back to school in January which I will need to get student loans for… is it even possible to secure government student loans while in a consumer proposal?”

If you’re in Ontario, OSAP will no longer perform a credit check when you apply for a student loan. You didn’t mention in which province you reside.

Victor is the President of Fong and Partners Inc. He is a Licensed Insolvency Trustee and Chartered Professional Accountant. With many years of experience in the insolvency field, Victor has been involved in both corporate and consumer insolvency engagements. Previously with a large national firm, Victor founded Fong and Partners Inc. so that he could dedicate his professional life to help people from all walks of life to deal with their debt.