- April 27, 2024
- Posted by: legaleseblogger
- Category: Related News
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# Financial Situation Overview
## Understanding the Debt Situation
After years of irresponsible spending due to financial illiteracy, coupled with a challenging period mentally and poor spending habits, I find myself in a daunting situation with $38,000 in credit card debt along with a $14,000 loan from my bank. This brings my total debt to a staggering $52,000, with the credit card debt accruing interest at a rate of 13.99% (recently lowered from 21.99%).
## Reflection on Past Choices
Despite earning a comfortable income of $100,000+ as a nurse, a recent move to a more expensive city has exacerbated my financial woes. The realization of how I arrived at this point fills me with horror and regret.
## Steps Towards Financial Recovery
Efforts to mitigate the situation include cutting down on expenses and adopting a more frugal approach to spending. However, the question remains – How do I navigate out of this debt trap? Is filing for bankruptcy the solution, or is there a better way to tackle this financial burden?
## Financial Breakdown and Planning for the Future
With a current salary of $96,500 (with a potential yearly bonus of 10% totaling $106,000) and additional perks such as a company car, there is potential to increase income through a second job. By working extra hours, I aim to boost my take-home pay, potentially reaching $975-$1,950 monthly.
## Seeking Solutions and Support
Already feeling overwhelmed and burdened by shame, the prospect of bankruptcy looms large. Seeking guidance on addressing the debt crisis, maximizing income potential, and overcoming the feelings of despair and isolation is crucial.
# How AI Legalese Decoder Can Help
By utilizing AI Legalese Decoder, you can gain clarity and insight into the legal implications of your financial decisions. Our platform provides personalized advice, practical tips for debt management, and expert guidance on navigating bankruptcy proceedings if deemed necessary.
Through AI Legalese Decoder, you can access tailored recommendations on creating a sustainable budget, exploring income-boosting opportunities, and developing a step-by-step plan to tackle your debt. Additionally, our resources offer emotional support and encouragement, helping you address the shame and isolation associated with financial struggles.
Embracing the power of AI Legalese Decoder, you can embark on a journey towards financial freedom, reclaiming control over your finances, and rebuilding a brighter future free from the burden of debt.
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Get your bank to consolidate the credit card debt into a loan with them. Make a loan payable over probably 5 years or so. When you get additional money repay it. They likely will ask you to drop your credit card limit which will be good for you.
You make enough money to not have to go bankrupt. You can do it
Bankruptcy for 40k? I lol @ that amount. You can pay that off at your current salary in 2 years.
Go get a LOC and lower that interest or get creative and find yourself a 0% interest transfer credit card. You’ll likely pay a couple percent to transfer the funds so do some calculations to see if it’s worth it. I get promos all the time that are 0% for 12 months. Or a LOC sub 10% percent.
That debt is not scary and you just need a plan to tackle it…. which is lower interest and pay it off.
3 years of $1300/mo will pay that off. Far far far from doomed, and far far far from bankrupt.
It sucks but you know or sucks and that’s why you’ll pay it off.
If you can increase your income by $500/mo and put that towards it it’s done in two years flat.
As someone who lives in Vancouver I believe you have fallen into the trap of trying to live the high life which is far beyond your means. 100k might seem like a lot of money but it isn’t in Vancouver. The fact you are paying so much in rent and utilities even though you have roommates proves that you’re trying to rent a bougie apartment with the girls when you should be in a basement suite paying half of what you currently are. The fact you have “this dark secret that nobody knows about” shows that everyone you surround yourself with is influencing your spending habits in an unhealthy way.
You need to cut down on your spending, period.
You should be putting upwards of $3000 a month towards your debts and with that goal in mind, you need to arrange the rest of your expenses around this.
At this rate of paying down your debt you would be able to pay off your debts within a year and a half.
If RN come to SK Nd sign on for three year 50k incentive. You d have to live and work in rural SK but hey cheaper rent etc. you can always move back to Vancouver after.
Go travel nurse in the states. With the exchange rate you could make 2-3x what you do in Canada.
Hey there, bankruptcy should be your last resort. First, you need to address the root cause and correct the behavior permanently, otherwise you’ll find yourself again within the so-called vicious cycle of debt.
Setup an appointment with your bank advisor and inquire for debt consolidation loans, and more importantly transferring your current balance from a revolving product(CC/LOC) to an installment one(personal loan for ex.). This application may require a co-signor depending on your credit/payment habits and relationship with the bank. If approved, they may want to cancel or reduce your revolving limits (credit cards, loc’s), and if they don’t, you should request it yourself, hence tackling the root cause.
Another option would be transferring your balances to credit cards which offer 0% interest for x amount of time which would also reduce your incurred interests.
Final words and a tip for you, character is one of the traits assessed by lenders which is composed of, but is not limited to: job tenure/stability, revolving utilization, payment habits, etc. (5C’s of credit)
Bonne chance
Try mbna 0% interest(you just pay balance transfer fee) to cover some of the amount, It will at least save you in some interest. Sometimes even few banks credit cards give you no interest balance transfer options.
You absolutely should not file bankruptcy! It seems you have a good salary, limited fixed costs and salary increase potential in your near future. You also have steady income. Start paying off your highest interest rate debt and just keep plugging away. There is no point beating yourself up. Yes, consumer debt isn’t great but just wait until you have mortgage debt, car debt, daycare costs, etc. My guess is you feel anxious because you are actually confronted with the number. I would make a spreadsheet that sets goals so every two weeks when you pay off some debt you visually see yourself get closer to being debt free. You can do this!
Bankruptcy is not all it’s cracked up to be.
Hi! First thing to do: destroy any credit cards you have then star making up payments from the smallest debt your have then go up next, then consolidate all your bills with your bank for the next 5 years.
Imagine you make half of your pay check and don’t try to live a life you can’t afford for now until you have no debts.
We all have a credit issue once in life, nobody is perfect; learn and keep going, God bless you.
At your income level you are not doomed but you’ve dug yourself into a hole and it’ll take effort to get out. If I were you I would suggest getting a free evaluation with a licensed insolvency trustee and see if there’s any way to take out a consumer proposal if you can, or look with your bank to see if you can consolidate with them. Barring that, you need to make a budget and commit to living a pretty boring life until you can eliminate that toxic debt that’ll prevent you from attaining long-term financial goal.
Do you have a pension plan from your employer that you’re paying into? If so, that’s very good for you.
Shot mental health is not an “excuse”, it’s a real thing that happens and you need to take care of yourself. Being a nurse is hard enough and I hope you’ll be able to get out of this without burning yourself out.
Would you consider working as a locum nurse in the US? I know the pay is better and by the very nature of the job, housing is provided as well. Also, you’d be making real money… and might be able to find a state where housing will not cost you $2000 with a roommate (as a fellow Canadian I hate the situation we’re all in).
As for ways to save money: talk to your bank, tell them you’re a nurse – you make good money now and will make better money later. Tell them you need an uninsured line of credit, they might give you one at a slightly better rate – anything less than 10% would help.
Did you consider asking a friend / family member for a loan? if you have a good relation with a relative – or a close friend… ask them for a loan at a 10% rate. As a parent I would much rather see my kid pay me 10% and get out of debt than know that they pay a f%$#!ing bank 14%. I might even throw in all the interest I “made” to help the kid recover sooner.
Be careful with extra work – you already burned out, there’s no point in going back to that. I’d much rather take an extra year paying down the debt and keep my health than paying it faster and losing it.
For depression, I recommend exercising, and Costco’s Omega 3 1200 mg, together with Ashwaghandha and Gingko Biloba. I’ve struggled with depression/burnout and anxiety for 40 years; than one day I ran into Daniel Amen’s “The end of mental ilness”, and I’ve been in a better place eversince. I used a ton of prescription meds before… the book and the recommended Nutraceuticals made huge difference in my life. I gave up all prescription medicine for 2.5 years now.
If you end up considering bankruptcy, read about how to do it right – just the other day I read here (reddit) about the fact that most agencies actually make money off their clients…
Read [https://www.canada.ca/en/financial-consumer-agency/services/financial-literacy-programs.html](https://www.canada.ca/en/financial-consumer-agency/services/financial-literacy-programs.html) to learn about managing money.
106000 should be taking 6600 home a month averaged over the entire year, which means you have on average 3100 take home a month, (amortizing the bonus over the year).
Your rent is extremely expensive for living with roommates, you probably can’t afford this.
That car is ridiculously expensive, are you using it for personal use? If you are (I suspect you are) you shouldn’t, then you won’t get taxed on it.
Put simply you are living way above your means. Move somewhere cheaper, don’t drive the car for personal use, consolidate the CC into a cheaper line of credit, and you’ll be fine after a year or two.
You can do this! First step, cut up the CC. Don’t use CC at all anymore. If you need one for online or booking a hotel etc, get one of the prepaid travel CCs. You’ve already accounted for your loan payment in those numbers, so I would slap $500 on that CC every pay cheque. That alone would pay down $13k in a year. When you get that bonus 100% should go to your CC.
I’m not sure what your “stuff” situation is. But if you have lots of clothes / shoes / accessories to get rid of, get on Poshmark and sell of what you don’t need/use. And then use that money towards debt.
Roommates dog? Are you paying for their dog?
Putting $1000 on CC leaves you $419 a month for “spending”. I would suggest trying to keep $400 a month as you “spending money” budget. And honestly if you really dedicate yourself to this, some months you may not even use that whole $400.
If you’re really overwhelmed and just don’t think you can do this, don’t do bankruptcy, look into a consumer proposal. It’s not as hard of a hit on your credit history long term.
U r perfectly fine. Many good suggestions already.
Its okay to be in this situation. But with your income you can ride it out.
Ur bonus coming in july, u will receive around 5000 after taxes,
That goes to CC straight.
Then u have left over around 1400, that should go to loan and credit card, minimum for the loan and rest to credit card, lets say ~1000 to credit card and 400 to loan.
April is going to end.
So may, june, july, – right there 5000+3000+1200 = 9200, debt goes to around 44k,
Then your income increases in second half, so increase payments to credit card to 1300, loan stays 400,
August sept oct nov dec – 6500+2000,
Debt reduces to ~36-37k.
Now, you have a okay debt to income ratio, you are expecting promotion, or some bonus etc,
Lets jot count that,
Look for line of credit Example— National Bank, package for nurses, they give prime +0.5, so interest is ~7.5%.
You can easily get approved by end. of year, assuming things stays somewhere like above
Once u have line of credit, transfer full balance to line of credit.
At this point, breathe, the big hurdle is crossed.
Now you can start enjoying life more, after stressful end of year.
Then pay the loc as fast as possible but not creeping yourself out of fun and life. And in another year living comfortably overall, you will be out of debt.
A bankrupcy is a decent option if you have no assets, tfsa, rrsp contributions etc. But you will be paying a decent amount due to your income.
They will look at your wage, 4920 a month, and go against the 2500 household expense that they use as a baseline for determining bankrupcy type. Since you are over this, they will take 50% of your extra pay past this 2500, and extend the bankrupcy from 9 months to 21
This means you would pay roughly 1210 a month for 21 months, $25410. So this is obviously less than your current debt, interest free, and you would be free of debt in just under 2 years.
The other option is a consumer proposal. However, due to your high income, they will run these numbers for a bankrupcy just as i have, and your creditors will only accept a consumer proposal if the balance is higher than what they could get in a bankrupcy. Key difference is making payments over 5 years, so 60 payments. Lets say you offer to pay 28k to entice them for a consumer proposal. Over 60 payments, thats $466 a month. Again, interest free. You also keep assets in a consumer proposal.
You’re in a sticky situation, but not horrible. You have fantastic income, and can make lifestyle changes to save a ton of money and pay this off yourself, but the interest is a killer. Small changes like cutting the morning coffee, eating out, cigs, alcohol, will save thousands in a year, but since you asked not to be lectured, i shall leave it at that.
Talk to an advisor or a LIT and go from there. Depending on your situation, a bankrupcy may be better than a consumer proposal or vice versa.
You are not alone, this can be embarassing and shameful, i am in 30k debt just starting my CP.
Good luck op, here for any other questions.
You’re not doomed. Bankruptcy doesn’t make sense. If this is causing you stress, you might want to do a consumer proposal, but I think you can pay this off with your income – it will just take time.
At 14% interest, if you pay $1,000 a month towards your debt, you’ll be debt free in 7 years. If you can pay $1,400 per month you’ll pay it off in 4 years.
It doesn’t hurt to talk to a licensed insolvency trustee and see if they think a consumer proposal would go your way. Given your income and earning potential I would lean into working overtime when you can and paying off the debt.
You’re earning at least 6k net/month. If your fixed expenditures are around 4k then you have quite a bit left over every month to pay off your loan. You’ll be fine, it should be paid off in 3 years or so.
Get a line of credit at a lower rate and start using that to pay it down. No need to file for bankruptcy.
I went down the debt hole to $80k and did eventually opt for a consumer proposal. However before I did, I had corrected most of my issues. Was following a budget and, not relying on CC for expenses and built a small emergency fund. What I found was having a plan, going at the problem and keeping on top of it took away most of the stress.
I don’t think bankruptcy is the answer here.
You make very good income and also note you have money left over each month so imo bankruptcy makes no sense. Interest rate is decent so I think the prudent thing would be to put everything towards your debt each month to pay off quickly.
I think you could benefit from reading some budgeting books or investment books to start thinking about how to save money as I’m sure there’s extra fixed costs you could cut down on.
Bankruptcy will impact your credit for 7 years which could impact buying a home, buying a car or even renting a place.
When did you become self aware of your debt issue? How has your spending habits been since then? Have you actually reduced your amount of debt?
First step would be to lower your credit card limit. Then start hammering away at the credit card with as much payment as possible:
You’re not doomed. Try to minimize expenses as much as possible, try to maximize revenue, pay off the highest interest debt first. Just remember to set a small amount aside for “fun” stuff. Why? Because you’re more likely to stick to your goals if you don’t feel like it torture. Usually $100 max a month for fun money helps make the $1k+ you’re spending on debt feel easier to let go of.
You’re not doomed, you do make good money, and with focus you’ll be able to dig out of the hole. A consolidation loan could save a fair bit of change, but, and this is the big but that my ex never got, you still owe all that money, and you cannot use all of your suddenly freed up credit to keep spending. If you use a card, pay it off in full, every single time. If you are a visual person, make a chart, put it on your wall, and track every payment, and your progress towards paying off that debt. You can do this!
Take 419 of that left over 1419 and put it on your credit card debt. Take a hard look at your needs vs your wants and cut back wherever possible. No shopping except for essentials, don’t buy it unless it needs to be replaced. Eat out less, make coffee and lunches at home, coffee shop maybe once a week. There are tons of ways to reduce spending. It just takes a lot of hard work and dedication and it’s not fun at all. good luck!
Go to the bank and get a line of credit secured against any assets you have, you have reasonable cash flow, but probably should consolidate the debt and cut up all the credit cards. To be honest you are really young and shouldn’t be stressing about 50 k in dept, just start making good choices and enjoy your time more. Don’t bother with a second job Vancouver is too nice this time of year.
I’ve had to consolidate debt before because of similar issues, CC got me bad after I was kicked outta home. I found a company (fox Symes for me) that consolidated all debt I had, froze creditors chasing me/calling me all the time and they put the debt into an account that doesn’t accrue interest. Plan is to pay back everything with fortnightly payments based on my income/spare funds. It’s a debt agreement plan (I’m in Australia so I’m not sure if the plan would be called something different internationally), it’s helped me pay off nearly everything at this point and will then wipe my credit history so I have a better outlook for future financial planning like getting a home loan. Super easy, they’re usually really helpful and kind and they deal with people with all kinds of circumstances. Good luck, I hope it all goes well ❤️
I think you just gotta head down … work some overtime or whatever … be mindful of buying clothes and other items that are wants vs needs
Try to consolidate all that debt into one payment with the lowest interest possible … $700-$1000 a month at that debt – extra when you can and you will do it
Keep in the gym … and stay active and healthy it will be tough mentally but you have good education and job
IMO your income is too high to justify filing bankruptcy over that amount of debt; I don’t even know whether a consumer proposal would be approved given your income. Nonetheless, **you have the means to pay this debt off**. As other posters have mentioned, it’s going to take time, it’s going to take commitment, and it’s going to suck at times – but you can do it.
First off: Your suggestion to work additional hours is great, provided that you can do so without negatively impacting your health. You’ll yield a greater financial benefit picking up additional shifts and hours at your nursing job than having to deal with working for a second employer for non-overtime wages (not to mention saving the time you’d spend commuting to and from a second workplace). Find a balance that works for you, and if you have it in you, go heavy early on and then ease off. 13.99% interest on a balance of $38K comes out to ~$5671 per year – every dollar you can spare to pay towards that debt now **will** reduce your future interest accrual, helping you to pay this off sooner. If enough extra hours are available to you, earning an additional $10K in after-tax overtime earnings between now and the end of 2024 should be quite doable without damaging your mental health. Even an extra $5K in after-tax income will make a difference.
Second: If you haven’t already, stop using the credit card – cut it up if you need to. Use an alternate payment method for your day-to-day expenses, ideally cash or debit.
Third: Reducing the interest rate on your credit card as far as you have is a great start – see if your financial institution will provide you with an LOC or other instrument to further reduce this rate.
Fourth: Look at further reductions to your monthly expenses – you might find some wiggle room in your food and ancillary budgets. Your rent is insanely high for a place with roommates (and I say this living in southwestern BC), but I recognize that you may be tied to a fixed-term lease that currently prohibits finding more affordable housing. Being frugal and creative with your date nights and social activities will also help (as an example: grilling a nice medium-rare steak and some vegetables is cheaper than ordering a mediocre entree at a restaurant or pub, and at your rental rate, you’re already paying for a decently nice place to host!)
Finally: once you get this all paid off, **keep it paid off**. Make financially sound lifestyle choices, review your budget periodically, and don’t let lifestyle creep increase your cost of living. Setting up automatic bi-weekly transfers into a savings account will force you to become accustomed to living on a smaller income while building up some savings, and will ensure that you start earning interest instead of paying it; implementing this strategy today could help to ensure you’re putting as much money aside as you can to pay towards your outstanding debts. Watching these bank account balances grow – and experiencing the comfort of financial stability – will help keep you on the right track, and will also help to improve your mental state (adulting is boring, but incredibly comfortable in the medium-long term!)
Remember, you work hard to earn your money – make it work hard for you! The comfort provided by financial stability (which comes from thoughtful money management) is worth more than any product, meal or vacation that you’ve charged to your credit card.
First of all, you can do this. You have a steady income and potential to increase your income. If you cannot consolidate your debt or any of the other suggestions from users, you gotta double down and go all in on paying this off. This means cutting food down to $300/ month or less (for one person this is do-able. No purchases that are not critical to your survival (NO new make up, clothing, new scrubs, etc). For the next 2 years, you are a hermit with the goal of paying off your credit card loans(then you move onto other loans). The faster you can pay this off, the faster you will be able to start your life again without this stress.
(As a fellow nurse living in Vancouver, I sympathize and understand how you got this debt. I was in a similar situation) you mentioned you have a serious bf in Vancouver, I’m assuming marriage might be in the near future and a home etc. You have to really focus in now more than ever!! You can do this.
Second job
Sell some things
Pay it off
Once done, keep saving
Learn from it
i understand you. My suggestion is asking your bank for loan for several years. And during these years, work harder and be careful of your spending. I hope you can be less stressed cuz it’s really bad for you mental and physical health. Good luck
Go to bank and ask your financial advisor to convert it into 18-24 months payment if possible. For the next two years try to cut down your expenses. When you get your yearly bonus you can use to pay off the debt and avoid additional interest. Been at your position but with smaller debt few years ago. Slowly paid it off in a year.
If you cant consolidate start paying off the highest interest card first. This will take time I definitely would not do bankruptcy as you’ll screw yourself over for 7 years but you also need to learn a lesson and you have to struggle to pay this off to learn your lesson. just like my sister-in-law did when she was 100,000 in debt. once you start getting things paid down I would potentially get rid of a couple credit cards ask the bank to lower your credit limit so you don’t get in the situation again or if you think you’re learning your lesson just leave it be as you start to pay down your debt you should be able to get a loan with a higher credit score. But you’re going to have to start learning to live beneath your means and maybe you’re getting a second job. you know Uber, Uber Eats if you have a reliable car or some other part time job those five and $600 payments will go a long way to knocking down your credit card. Alll the hard work you’re going to realize I won’t have to do this ever again if I just control my spending
Start selling your underwear
Not a great situation, but you can easily handle this. I wouldn’t even work an extra job, just throw $1000-$1200 into your debt each month and try to “save” the remaining for surprise expenses. I know you said Nursing causes you lots of stress, but if you can squeeze out some over time at your current job, that would help pay off the debt a bit quicker.
My quick thoughts and comments:
-100K gross income is not that much, when you factor in living in a big city is expensive, payroll deductions/taxes, etc.
-Declaring bankruptcy like many have said above doesn’t seem appropriate for this situation.
-Getting a LOC won’t be easy unless you have assets but it’s worth looking around. The rates will generally be prime + (7.2% +).
-The OP should try to shift mindset from feeling shame to steps to move forward on this. The promotion sounds amazing, focus on that!
-Reviewing spending and carving out a portion for the CC paydown is the way to go. Small steps.
-The amount of part time hours sounds quite a bit to add on and may be burdensome unless the mindset is pushing through to use the cash for debt paydown amd that is more powerful than being very tired.
Good luck, you can do this!