Wife and I have $120,000 of US Credit Card debt on 9 cards (used to be more). We now live in Canada, are current on all 9 cards, but can no longer keep pace with the minimums and apparently need to either A) quit paying or file US BK ? Which would you recommend? I'm told that Canada will not count "written off debt / bad debt" as "income" but our nine US Cards may each send us a 1099 the delinquent debt, if we quit paying, creating a big US Tax issue. What should we do?
Here's our key data points:
- We are 1 US Citizen / new Canadian PermResident, and 1 Canadian Citizen, still with an active US Green card / SSN that also needs to be addressed
- We have 2 new Canadian Credit cards, unrelated (unconnected?) with only $4000 total debts on it.
- We own no property (used to own 10)
- Have only one asset (an illiquid part of a building, housed in my Roth IRA). Paid $50,000 into it in 2006; it is currently worth maybe $15,000
- All 9 US credit cards are current on payments
- 4 cards ($70,000) are still open, at 10%-13% interest
- 5 cards ($50,000) are closed, renogiated to 2-4% interest
- We used to make a nice six-figure income (through 2009), own a $1.5m house, but in last three years more like $35,000, alongside health issues, market slides, sleep deprivation and unexpected multiples.
- No savings
- Only about $10,000 of borrowable capacity left
- We may return to the US to live, but it is unclear when, 1-3 years?
- In theory, it is OK if our US credit it trashed
- no prior BK's, bad debts, or foreclosures, not even a single missed payment of any kind
- We are a 3BR tenant, one-crappy-car, no cable, walk to public school family, with no lofty goal of new credit, new cars or buying a house; we just need temp relief from payments
- some of the debt $50,000, goes all the way back to a 2007 kitchen remodel on a house that could not be sold, as it lost 700,000 in value.
- we are both self-employed; there is no employer to garnish
Our Preferred Solution Path
We believe our earning potential will return to $200,000 / year but not for 3+ years. We would like to make good on these debts and believe we could pay them off in full even 3-5 years from now. But at the moment, we cannot support a house full of kids under 6 on $35,000 a year and make $2600/mo minimum payments. We have contacted each of our CC companies and several credit counseling / consolidation services. They are completely incapable of bringing a human level of calculation to our situation. Their only offer / program is to reduce the interest rate and put us on a 60 month repayment plan. We cannot meet these minimum payments with. I'd be willing to make 6% interest-only payments on the entire amount, or do no payment for 3 years, and then start payments in the 36th month, but they won't work with me. It is their way or the highway. So I have to plan which highway to take. Any recommendations? BK or should I just quit paying the cards?
Here's our key data points:
- We are 1 US Citizen / new Canadian PermResident, and 1 Canadian Citizen, still with an active US Green card / SSN that also needs to be addressed
- We have 2 new Canadian Credit cards, unrelated (unconnected?) with only $4000 total debts on it.
- We own no property (used to own 10)
- Have only one asset (an illiquid part of a building, housed in my Roth IRA). Paid $50,000 into it in 2006; it is currently worth maybe $15,000
- All 9 US credit cards are current on payments
- 4 cards ($70,000) are still open, at 10%-13% interest
- 5 cards ($50,000) are closed, renogiated to 2-4% interest
- We used to make a nice six-figure income (through 2009), own a $1.5m house, but in last three years more like $35,000, alongside health issues, market slides, sleep deprivation and unexpected multiples.
- No savings
- Only about $10,000 of borrowable capacity left
- We may return to the US to live, but it is unclear when, 1-3 years?
- In theory, it is OK if our US credit it trashed
- no prior BK's, bad debts, or foreclosures, not even a single missed payment of any kind
- We are a 3BR tenant, one-crappy-car, no cable, walk to public school family, with no lofty goal of new credit, new cars or buying a house; we just need temp relief from payments
- some of the debt $50,000, goes all the way back to a 2007 kitchen remodel on a house that could not be sold, as it lost 700,000 in value.
- we are both self-employed; there is no employer to garnish
Our Preferred Solution Path
We believe our earning potential will return to $200,000 / year but not for 3+ years. We would like to make good on these debts and believe we could pay them off in full even 3-5 years from now. But at the moment, we cannot support a house full of kids under 6 on $35,000 a year and make $2600/mo minimum payments. We have contacted each of our CC companies and several credit counseling / consolidation services. They are completely incapable of bringing a human level of calculation to our situation. Their only offer / program is to reduce the interest rate and put us on a 60 month repayment plan. We cannot meet these minimum payments with. I'd be willing to make 6% interest-only payments on the entire amount, or do no payment for 3 years, and then start payments in the 36th month, but they won't work with me. It is their way or the highway. So I have to plan which highway to take. Any recommendations? BK or should I just quit paying the cards?
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