Hey OttawaEng,
The worst has past. Your credit score probably took a bad hit.

Best thing to do is get some secured credit cards to start rebuilding your credit.

i feel terrible even posting this on a web site and i would really appreciate if someone knowlegable show me te light

Everybody runs into credit problems at one point or another. Even though it may feel like a shameful thing to talk about... It's therapeutic to get it off your shoulders and talk about it.

i have a simmilar yet slightly different issue,
i got into credit troubles back in 2004 due to my layoff from my high tech jon at Nortel.
i ended up defaulting on 4 credit cards that i had, totalling 24000$.
Back then it was really tough on me being the first time i had to face that beside the constant harrasments from the collection agency, looking for a new job etc.
i basically changed my phone number, moved to Toronto to look for a job and thought i will put this on hold till i am back on my feet to settle and avoid bankruptcy.
now, i am trying to take care of the problem, i got my credit reports and it shows all the accounts listed as chargeoff.
There's also no public records etcs.
Now given that the SOL, which i knew about thanks to your site, have passed, what's the best course of action for me to take care of this.

i feel terrible even posting this on a web site and i would really appreciate if someone knowlegable show me te light

thanks in advance

ottawaEng

No problem, as I said, each person's individual situation is different and they need to think carefully about what course of action to take. In many cases, bankruptcy is not the way to go, in other cases its the only option. Everyone has to make their own decision and it certainly isn't an easy one to make.

Thanks

M.L.,

Considering that, A) The creditors can't geographically locate me; B) Don't know where I work - or if I'm employed and C) each are owed between $2500-$15000 (one bank totals ~$22k with credit card, plc, od, etc), I'm wondering if it's still worth their time? Perhaps this is something a couple banks are contemplating given that they haven't fully charged off the accounts - collectors are still working on behalf of the banks (I presume, by the wording of their letters that they have not purchased the debt).

O.C.

Afterbite,

9mos vs. 12-16mos, is how I'm reading your reply. File for Bankruptcy, be discharged in 9mos and enjoy the same stigma as the person who simply opted to default on their debt(s).

In my case, if I wait the 12-16mos the S.O.L. for Ontario prevents the collectors from pursuing any further action. Sure I'll have a whack of R9's on my file, but I'll still have a 5000k credit card in my hands to help out in day to day finances, as well as, re-viving my credit score.

It's a tough call, but my feeling so far is to avoid Bankruptcy - if it's possible. Just a personal feeling, it's not the decision for everyone though. The creditors and collectors calling doesn't bother me, as they 95% of the time receive voice mail anyway.

In any case, thanks for sharing your story as well as your perspective. It has been noted and will be taken into account.

Ottawa_Chap.

I don't usually promote bankruptcy, however, after discussing different people's situations with Richard Cooper, totaldebtfreedom.ca, he mentioned that if you're over $125k in debt it's pretty hard to settle.

These are the kind of amounts that are profitable for creditors to sue on etc.

bankruptcy is ugly but it may be an alternative. Would it take you more than 7 years to pay off that kind of debt??

From what I have read, it sounds like your credit is already down the drain. I was in a very similar situation just over seven years ago. If you do a consumer proposal, or try to settle with your creditors for a percentage of the original debt it (in my opinion) would be a waste of your time and money. Your credit is already ruined, so why pay 20% to your creditors and be left with a lousy credit score and an empty bank account. When I was in debt for over 40k and had lots of late payments, I considered settling as well. Then I thought if I settled for 20% I would be out $8000 bucks and still have terrible credit. I took the 8 grand paid off my wifes car loan and declared bankruptcy 4 months later. As soon as I was discharged I got a secured MasterCard paid it in full every month for a few years, and now that my bankruptcy is no longer reporting on my credit report, I have a better credit score than almost anyone I know. I bought a house, got a great rate on the mortgage and my car loan, got a platinum amex and gold visa, and have an unsecured line of credit for 50k. If I had not declared bankruptcy my situation would probably be much different. Some people may disagree, but I figure why pay the creditors when you could just go bankrupt, keep the money you would have settled with, and start over. Just don't let history repeat itself and learn from the experience. That's just my opinion, but it sure worked for me.

Unfortunately, the funds are not available (yet) to offer the 10-20% settlement proposal to the creditors.

I suppose that I could find funds to make a miniscule monthly payment(s), but in the end I don't see that helping the greater cause. The payments would be too low and spread across the board, thus, taking years to pay the balances in full.

This is why I was aiming to bank a pool of money for a settlement offer in a year or two. What I'm curious about though, pertains to the difference in perception through a banks eyes re: Settled vs. "Defaulted" a couple years out? I.E. If the term Settled is just as harmful to my credit score, then where's the benefit in attempting to settle these debts - asides from moral obligations; which is why I'm not inclined to declare Bankruptcy.

Besides, I still have a 5k MasterCard in good standing with one bank so if I need to draw emergency funds, a source is still there. Does this help clarify my curiosity on how best to address this situation? Perhaps after the S.O.L. on the outstanding debts has passed, the CC in good standing will be a factor in reviving my FICO score?

O.C.

ottawa_chap,

You've got another year at least before you statute of limitations is up. If you haven't made payments for 12 months your credit is probably destroyed anyway. If you go to settle your debt then your going to have to surface, which means creditors will have your contact info.

Do you have the money to make reduced payments?

At this point it would an honorable choice to repay all the debts... It may be good to settle them out. Otherwise, you'll have to wait a full 6 years before they all drop off your credit report.

125k Total, now.. I stopped making payments on various accounts between 8-12months ago.