So here's my dilemma: to use or not to use a debt counselling program ...
I owe about $4,000 to two credit cards. I am WAY behind. It is my fault only; I could've been making at least some payments but ... I didn't. Partly because when I started to fall behind, for some reason I thought I could no longer make online payments and I just never got to the bank. Yes, it is a stupid excuse.
With, of course, the usual results: the endless letters and phone calls.
I have looked into a debt counselling program. For those who don't know, when you sign up with one of these, they run interference with your creditors. You, on the other hand, sign a promise to pay a minimum payment each month. Screw up, without a good excuse, and you are toast, but as long as you pay faithfully, they will keep the collection hellhounds off your back.
I'm told they can also negotiate a lower balance to be paid off, but honestly, I don't care about that. I know I can pay this off, but the last time I talked to one of the collection agencies, I promised to get back on track and pay $50 a month ... and his response was, "Well, my clients might decide to take further action." I panicked and promised $100 a month, which is not possible ... not when I owe a second company too. I realized afterwards that at that point I should've said, "You know, I don't like being bullied and threatened" and hung up the phone.
The reason this is a dilemma is that I still have a year of school to go, and I still need student loans to get through it. The debt counsellor I spoke to said that as far as he knew, there would not be a problem ... he usually gets notifications from the Ministry of Education about how such programs affect students' ability to get loans, and he's had nothing, but he recommended I speak to somebody at the college's Financial Aid Office anyway.
So I did. She had no clue. Said she'd never run into this situation before.
However, we had a brief meeting and I took the printouts the guy had given me and she contacted the Ministry of Education. They also indicated it "shouldn't" be a problem, although signing up for this program means I will have to "self-declare" that I am in a "bankruptcy-related program" (I don't get this as I am NOT filing for bankruptcy and am indeed trying to pay off my debts, but whatever). There are other criteria (I don't change my program -- no problem there -- and so on) but they are not an issue.
Now, my credit rating at this point is in the toilet. No, I haven't checked but I don't see how it could be anywhere else. And I still got a student loan this year (and yes, they do credit checks). The Ministry also said I would not be getting another another credit check for next year as they only apparently do credit checks every other year.
So why is this a dilemma? The word "should" worries me ... where the Ministry indicates it "shouldn't" be a problem. I absolutely cannot afford to sign up for this program and then have the Ministry go, "Oh, we've changed our minds; now we won't give you OSAP." If this were my second year, I'd sign up no problem.
The other concern is that this will likely still be on my record when I leave school and go looking for work. OTOH, my currently lousy credit rating is not likely to do me a lot of good, either.
So I'm wondering: should I just tough it out with my $50 a month payments for the next 6 months (making sure, of course, that I don't fall behind again), and then, once I've been approved for OSAP, sign up for the debt counselling program? Or sign up now and just hope that the advice I've gotten so far is correct and it won't affect my student loans? Or not sign up at all?
I owe about $4,000 to two credit cards. I am WAY behind. It is my fault only; I could've been making at least some payments but ... I didn't. Partly because when I started to fall behind, for some reason I thought I could no longer make online payments and I just never got to the bank. Yes, it is a stupid excuse.
With, of course, the usual results: the endless letters and phone calls.
I have looked into a debt counselling program. For those who don't know, when you sign up with one of these, they run interference with your creditors. You, on the other hand, sign a promise to pay a minimum payment each month. Screw up, without a good excuse, and you are toast, but as long as you pay faithfully, they will keep the collection hellhounds off your back.
I'm told they can also negotiate a lower balance to be paid off, but honestly, I don't care about that. I know I can pay this off, but the last time I talked to one of the collection agencies, I promised to get back on track and pay $50 a month ... and his response was, "Well, my clients might decide to take further action." I panicked and promised $100 a month, which is not possible ... not when I owe a second company too. I realized afterwards that at that point I should've said, "You know, I don't like being bullied and threatened" and hung up the phone.
The reason this is a dilemma is that I still have a year of school to go, and I still need student loans to get through it. The debt counsellor I spoke to said that as far as he knew, there would not be a problem ... he usually gets notifications from the Ministry of Education about how such programs affect students' ability to get loans, and he's had nothing, but he recommended I speak to somebody at the college's Financial Aid Office anyway.
So I did. She had no clue. Said she'd never run into this situation before.
However, we had a brief meeting and I took the printouts the guy had given me and she contacted the Ministry of Education. They also indicated it "shouldn't" be a problem, although signing up for this program means I will have to "self-declare" that I am in a "bankruptcy-related program" (I don't get this as I am NOT filing for bankruptcy and am indeed trying to pay off my debts, but whatever). There are other criteria (I don't change my program -- no problem there -- and so on) but they are not an issue.
Now, my credit rating at this point is in the toilet. No, I haven't checked but I don't see how it could be anywhere else. And I still got a student loan this year (and yes, they do credit checks). The Ministry also said I would not be getting another another credit check for next year as they only apparently do credit checks every other year.
So why is this a dilemma? The word "should" worries me ... where the Ministry indicates it "shouldn't" be a problem. I absolutely cannot afford to sign up for this program and then have the Ministry go, "Oh, we've changed our minds; now we won't give you OSAP." If this were my second year, I'd sign up no problem.
The other concern is that this will likely still be on my record when I leave school and go looking for work. OTOH, my currently lousy credit rating is not likely to do me a lot of good, either.
So I'm wondering: should I just tough it out with my $50 a month payments for the next 6 months (making sure, of course, that I don't fall behind again), and then, once I've been approved for OSAP, sign up for the debt counselling program? Or sign up now and just hope that the advice I've gotten so far is correct and it won't affect my student loans? Or not sign up at all?
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