In the US now but have credit card debt in Canada still

[sportsguy 0]

Need a bit of advice here. I'm a Canadian living in the US at the moment. Since 2005 I have been in and out of Canada, but mostly in the US but have always established residency in Canada, filed/paid my taxes etc. Now, I'm permanently in the US. I racked up almost $18K in credit card debt on a Canadian credit card I've had since 2001.

Until about 2005 or 2006, I had always paid off my card in full. Later on I racked up a lot of debt and the more I racked up, the more Royal Bank kept increasing my limit without even telling me.

As of almost 2 years ago I was in constant negotiations with the bank and then a year ago turned over to collections but I had always managed to work out a monthly deal paying $300 to $500 a month (give or take). As of June 2012 however, I've been unable to pay anything to my Canadian credit card despite not even living, working or owning any assets there. I did have some assets in a business in Canada which I sold off almost 2 years ago and used that to pay off other debts here in the US and among relatives in Canada which predate me being in collections (I also still owe a balance to relatives to this day and have signed/notarized contracts to prove it).

I am at the stage of collections where they are threatening to move my file to the legal department and even the Royal Bank won't really talk to me anymore unless it's to pay off the $2000 owed that's over and above my credit limit (due to interest and such). I did manage to convince them to make a small payment in a few weeks and postpone moving my file to legal.

What should I do? I am in the US. I don't and can't work as I am in the process of applying for my Adjustment Of Status here in the US. Technically I can't (shouldn't) even leave the US until the paperwork is finalized.

The people over the phone sounded intimidating after dodging calls for weeks (though several times I picked up and no one answered on their end), especially after I suggested that bankruptcy might be an option for me because I am in too much debt relative to what I own and receive as income. The person insisted that I can't go bankrupt, that I don't qualify for it and went as far as saying "Can you afford to pay the $3-5000 to trustees and lawyers to file for bankruptcy?"

I told them whatever I make is barely enough for me to survive and scrape by. I have nothing extra to give them and don't know what to do.

I have some money in the US at a bank which I use to live off. Nothing lavish, but it gets me by. Can that be touched from the Canadian side?

Would appreciate any help/advice or real life experience on what to do and expect from here on

Edited September 15, 2012 by sportsguy

[kdlangfan 1]

I have some thoughts/advice to offer however I want to preface anything I say with a disclaimer - this is just my experience and my understanding as a non-professional. You should seek professional advice...and I do not mean advice from collectors who call you looking for money because they don't care about you and are not going to act in your best interests. But good for you for posting here and asking for advice....this is not an easy thing to talk about or deal with but it won't just go away. Good for you for recognizing you need help.

I had a lot of debt in Canada that I could not afford to pay before I moved to the US. I struggled for several years to manage this debt on my own and felt very strongly that I had accumulated this debt so it was my responsibility to pay it off. I finally realized I just could not do it. I wanted to deal with it before I moved to the US so about a year before I moved I went to a free credit counseling service....most communities offer this kind of service. When I met with them and explained my circumstances, they explained they couldn't help me because my debt to income ratio was too high. They recommended I go to a Trustee to explore my options and explained that the consultation should be free and if they charged me, not to deal with them because they were not legit. They also told me what to look for and what to expect in order to find someone who could actually help me and not rip me off because Trustees are regulated. They even recommended someone they knew who could help and who they knew were trustworthy.

I ended up not going to their recommended trustee, but I did go to another trustee (MNP-it's a big company). They explained my options....either bankruptcy or consumer proposal. You don't pay anything upfront...in either case, the fee for the trustee comes right out of your monthly payment. As soon as the bankruptcy or proposal papers are filed, harassment from collection agencies ceases immediately. The are not allowed to talk to anymore...they have to talk to your trustee.

My best advice is to go to a non-profit credit counseling service in your area. See if they can help you. If not, then go to a trustee. And also do your own research online. Good luck!

[Ontarkie 14,498]

Once things go to collections the bank or who ever the debt was owed too is no longer an option for dealing with. Do not listen to them concerning bankruptcy they do not want you to go bankrupt because they just bought your debt, so ya they want to get as much out of you as they can. They will make all kinds of promises about how you can still save your credit but it is all a lie. Credit counselling is no longer regulated so you can pay for years to find out that they never payed a penny to your debt. I've been there and I found out it happens a lot.

Stop talking to them and file bankruptcy, you can do it from the US or call an attorney back in Canada to get things started. Once you get your GC go finish off the paper work.