Debt and Disability


#1

If this is too off-topic I will delete, I just thought perhaps others may have dealt with this.

With the seemingly endless wait for LTD and CPP disability claims, appeals, etc, having zero income makes the ability to pay bills pretty impossible. Savings lasted 3 months, EI sickness helped for 13 weeks, cashing out the only small investments I had helped a bit. But it gets overwhelming quickly. Selling small items on eBay only does so much.

I have a credit card (maxed), phone bill, and personal loan. The credit card company and phone company have been no less than fantastic to deal with. However the bank through which I have my loan, which are the biggest payments, is playing hardball. I have been told that if I miss a regular payment, they will call in the loan. This makes no sense to me, as if I am unable to make a minimum payment, how exactly would I be able to make the entire loan payment??? I don’t own a house or assets aside from my vehicle, which is 10 years old and wouldn’t profit them any if they were to take that, after the costs associated with seizing and selling it. Plus it is my only mode of transportation as I do not live where there is bus service.

This causes me almost as much stress as my disability, and the frustrating thing is that I know I will have money coming in eventually (there is a back pay that I am owed from work, currently stuck in the Phoenix fiasco), but it’s the ‘when’ that I can’t guarantee or predict.

How do people manage with no resources???


#2

I was lucky, I got LTD right away but I can see financial difficulty being common.
I guess apply for welfare?


#3

That is always an option, but it would still be less than $500 per month which covers maybe prescriptions. Hee. I may have to.


#4

consumer proposal or bankruptcy. Check out the forum http://debt.bankruptcy-canada.ca/

We did a consumer proposal on my spouses debt.


#5

Hoyes and Michalos are great at doing Consumer Proposals. They have multiple locations in Ontario. Did my proposal through them and it was painless and they do not charge anything up front.


#6

I think some banks like Alterna are offering special loans for people affected by Phoenix - based on the amount of back pay you are expecting.

I find the financial hardships of the claim process add significantly to the difficulties of dealing with my illness. I knew it could be long, but it’s worse than I anticipated.


#7

Consumer proposal can stop all interest, and then you usually negotiate a payment over 3 years to your creditors. Could be from 20-80 % of your debt.

You can get a secured credit card from many companies such as Home Trust and Capital One to use for necessary cc purchases. From $100 and up. You need to find some cash to do this, but when you start the CP then you can stop paying those creditors. When they call just tell them you are doing it, and when you have your estate #, you can give it to them.


#8

We went for 5 years for my spouse and got 19 cents on the dollar --he had over 120K in debt


#9

I can understand that.
There was almost too much for me to deal with.


#10

This is all good advice, thank you. The frustrating thing is I could get my small amount of back pay from work at any time, and would hate to have proceeded with a CP when I didn’t have to. It’s the ‘when?’ aspect of everything that is so frustrating and anxiety provoking. I also live with family and would hate them to know I have debt to begin with.


#11

Go bankrupt bottom line…Quit paying your debts unless you plan on paying them off ?They can’t take your disability check…People on Ltd Cppd have enough stress cut. Out the rest They won’t go bankrupt its a tax write off for them.Pay you fist living expense any left give it to debt collector


#12

This is the route I went and couldn’t have been happier. The stress from the debts accumulated was so overming and just adding to my condition. The question you gotta ask yourself is do I see myself buying a house? Property? Car? In the near future. If the answer is no and you fore see yourself in dissabillity for an extended period of time then seriously consider bankruptcy. For me it was a blessing.


#13

Thanks everyone. I am able now to manage since winning my LTD case, and am very much hoping for improvement to the point of being able to return to work, so for now I am holding the line…my credit score is not good at all, of course, but I am working towards slowly improving that now with a bit of stability…


#14

I would still review options for consumer proposal and/or bankruptcy. It can be a game changer for rebuilding your savings


#15

Congrates yes pay bills on time pay your debts off higher interest first pay min on rest most on the big 1 G.L Spending is great till the bill comes knocking


#16

While this post is a year old, OP if you are still have debt issues I would recommend a consumer proposal or bankruptcy. I also used Hoyes and Michalos and found them to be amazing. I went to a different one first and they shamed me so bad. My entire debt was due to my health situation. In the last 5 years dealing with this, Hoyes was the first people to treat me like a human being and not shame me. They are professional and caring. Honestly, I had a lot of guilt filing for bankruptcy but I could have struggled with my illness borrowing from one card to pay for another or I could relieve some of that stress. I realized the creditors don’t care. I had one that didn’t even vote. I have probably paid 3 times what I owned in interest over the years. Never late on one payment ever. I don’t feel as bad anymore when I realized they don’t care. It has alleviated some of my overall stress.


#17

Thanks for sharing your experience! I appreciate it even though things worked out for me once I got my LTD approved and retro LTD pay (my case was won sooner than I had expected.) Unfortunately I do have one mark against my credit score due to the year and a half without reliable income, but my credit card company and regular bills worked with me and gave me some time and waived interest for a period I needed as well. Interest is definitely a big game for sure…


#18

This was a great thread. I encourage people to strongly consider bankruptcy or consumer proposals if the prospect of paying the debt is too unrealistic given your reduced income due to disability. There is no shame in bankruptcy when you are hit with such unforeseen circumstances. However, i do caution that if you have an open disability claim, or if you have a lawsuit for disability insurance payments, you should consult a lawyer, or discuss with your current lawyer the implications of the bankruptcy. The law regarding bankruptcy and LTD settlements is changing and unfortunately many people (including lawyers) are working on outdated understanding of the law in this area. There are recent cases in Ontario that are much more favouable to the disability claimant and we are pressing to have that law confirmed in other provinces. Bankruptcy is federal jurisdiction, so the is intended to apply the same in all provinces. We have a court case coming up on this issue to have these new laws recognized in Nova Scotia.


David Brannen

Disability Lawyer with Resolute Legal

The response posted above is based on the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with a lawyer, fully explain your situation, and allow the lawyer enough time to research the applicable law and facts required to give an adequate opinion. The basic information provided above is intended as a public service only, a full one-on-one discussion with a lawyer should be done before taking any any action. The information posted on this forum is available to the viewing public and is not intended to create a lawyer client relationship with any person. If you want one-on-one advice, please click here to request a free consultation or call toll free 1-877-282-5188 to speak with a member with our disability claim support team.


#19

Thanks very much for this info, David!