Bankruptcy Kitchener Blog

Archive for July, 2007

July 23rd 2007
There is life after bankruptcy in Kitchener

Posted under credit cards & bankruptcy Kitchener

I received a phone call recently from Lynda (not her real name).  In 2002 Lynda and her spouse were filing for a divorce.  This life altering event caused a number of problems in her financial life as well as her personal life and Lynda filed for personal bankruptcy.  She received a discharge from her bankruptcy in 2003 and started over as a single person.

Lynda was telling me that after to her discharge from bankruptcy she was able to save some money and purchase a home, which has grown in value to the point where it now has about $30,000 equity.  She also leases a vehicle.  She has been careful with her finances, heeded the advice she received in her debt counseling sessions and now feels confident that she is “in control” of her own life.

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Jane Merling

She was telling me that she would like to obtain a credit card for the purpose of ordering from the web, purchasing theatre tickets and other commodities that seem to require one.  She was apprehensive about applying for a credit card as this would be her first attempt at venturing back into unsecured credit, she wasn’t sure if she would qualify and did not want to have a number of “hits” on her credit report.      

I suggested the following:

  1. Obtain a credit report from Equifax and examine it thoroughly.  If there are any discrepancies make Equifax aware of them immediately.  It is critical that this report be as accurate as possible as lenders rely on the information provided.
  2. Meet with an officer in person (not just on the phone) with her home bank and explain her situation.  If the bank is unwilling to grant her unsecured credit ask how she can improve her situation to meet their qualifications and then follow their advice.
  3. Get a secured Visa card as a way to rebuild credit, and to have a credit card available for internet and other purchases.

Lynda told me that filing for bankruptcy gave her a fresh start and that the changes she has made in her life have enabled her to move in a positive direction.

If you feel that you need  Fresh Start call us in Kitchener at 310-PLAN (310-7526, no area code required) or 519-747-0660 or e-mail us to arrange a free initial consultation.

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July 9th 2007
Creating Debt to Pay Debt in Kitchener

Posted under bankruptcy Kitchener

We have met with a number of people who have gotten caught in a circular manner of paying lines of credit and credit card debt.

Let me explain. I recently met with Donna (not her real name) in our Kitchener office. For a number of years whenever she found herself short at the end of the month, Donna would simply take a cash advance from one credit card or line of credit and use those funds to make a payment on another debt.

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Jane Merling

While this may have resolved the immediate problem of keeping the payments up to date and avoiding late charges or phone calls from creditors, it created a false sense of paying debt. In fact, if she had gone back and added up all the interest and cash advance charges she had paid she would have been shocked.

A few months before Donna came to see us she lost her job as a result of a downsizing in her place of employment.  It only took a few short months for her credit to get maxed out and the house of cards that she had built began to fall apart.  She was no longer able to use the circular manner of paying debt that she had relied on for so long because she had no more credit and could not increase her credit limits during a period of unemployment.  She was actively looking for another job but in the meantime creditors were starting to call.

Donna filed a bankruptcy with us, putting an end to the collection calls and continuing interest charges.  The bankruptcy process includes debt counseling, which she feels will be very helpful in making positive changes in the way she deals with her finances in the future.

If you are finding yourself close to the maximum limited on credit card/ credits line and that you sometimes have to rely on this method of payment, give us a call at 310-PLAN (310-7526, no area code required) or 519-747-0660 or e-mail us to arrange a free initial consultation.

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