- April 12, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Seeking Assistance with a Significant Debt Issue
I first want to say that I’m unsure of what I informations I should give, so please tell me what’s missing and I’ll add it on my post asap.
I’m currently facing what I consider a huge debt totaling 12100 dollars.
Here are the numbers
– 1450 work pay biweekly
– 1500 in chequing account
– 7050 in credit card debt
– 5050 in personal loan
– 115 internet/phone monthly
– 800 rent monthly
– 150 refunding my personal loan biweekly
I’m trying to find a way, other than saving, to fix my debt. I know there is no miracle way, but I would like to know if there’s anything.
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Some more info: I’m paid for 40 hours a week, but I usually work more. I met with someone at the bank for the personal loan, but it’s hard to get a new appointment with them.
Is there a way to see what’s best for me? Are interests lower at another bank? I know nothing about all that!
Thanks very much!
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You can do this! A few thoughts:
1. 1450 biweekly is $3141.67 monthly. Where is the rest of your money going? Do you have transportation costs? Grocery? What do you spend eating out?
2. Try a “no spend month” challenge where you stop buying stuff except for bills/groceries. This is helpful as a) you will quickly realize where your money goes (“damnit! I really want to order in tonight!”) and b) you will have extra money at the end of the month to put on your debt.
3. Start focusing-firing on your credit card, as it will have the highest interest rate.
4. personally, I would hang onto the money in your checking account, in case of emergency. Once you have your credit card nearly paid off, you might consider using some of that money to get it across the finish line.
Good luck!
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This is where a proper spend tracking comes into the equation and then this thing called a budget can be made. You currently don’t have food, clothing, etc listed. Try driving to a new place if you don’t know where you are staying from, it’s not happening. 🙂
Good news is $12k debt is relatively small, though definite anchor on your finances. But if you do have $1k free month then it’s a 12 month plan, or maybe a 24 mo plan if it’s only $500/mo. But no magic like you said, it takes time and consistency. Automate the the payments so you don’t need to think of it. Make it happen on payday and pay off in order of high interest to low interest.
I personally think you should keep the $1500/small emergency fund available so you don’t need to use credit for unplanned expenses. Note I did not say unexpected, most expenses are expected with unknown timeline. Car repair, phone breaking, appliances, teeth work. These are all things we know happen the only question is when, not if.
You need to figure out where the rest of your money is going, because as someone said, you only account for about $1000 out of your $3000 income. Until you do that, you’re just wandering around in the dark.
Once you do that, you’ll know what you need to trim, and how much money you can put towards your payments. I would start with the highest interest item first, and just pay the minimum amount on the other(s).
Getting another loan to help pay off your current debt only helps if your new loan is lower interest than your current loans. You don’t say what your interest is on your current debt.
And for god’s sake, don’t charge anything more to your credit card(s) until you get it under control. Paying it down and charging more doesn’t fix anything.
I had more debt then you I had $24,000 and change in debt I got a consumer proposal and got it cut down to $7500 and paid $125 per month I got one year left of debt just as the pandemic started
You’re actually in not bad shape, mate!
1) Reduce costs: First try to stop any “vampire” monthly payments like monthly subscriptions you don’t use that much. Kill any services like cable that you can mostly replace with Internet streaming. Call your cell phone provider and tell them you found a better deal unless they drop their monthly rate. (They almost always can drop it some). If you have a car, but don’t NEED it, you could park it for a couple of months and save on insurance costs for that period.
2) work extra: When it was tight for me, I temporarily took an extra job 12-15 hrs a week stocking shelves at a grocery store for a year or so to get back on track. That cash can directly attack your debt.
Good luck!
Others are giving good advice. I just wanted to say good for you for wanting to deal with this sooner rather than later. That credit card bill will get really big really fast, so it’s good to get that out of the way now 🙂
I was trying to make sense of the math, but then realized its 12,100 instead of 121,100. “Huge Debt”.. ahaha for ants maybe. You can literally work more and pay this off in a few months.
List debt in order of highest interest to lowest interest.
Pay min payments on all debt items except for the highest one where you put all available funds against it.
Once the first one is paid off, repeat the process.
Cut unnecessary spending till it’s all paid off. (
Could grind it out in one summer of hard work if you really dug in
>I’m unsure of what I informations I should give
You need to present a budget to yourself, and then us.
Do you even know where your money is going, down to the last dollar every day/week/month for the last 3 months?
Simply saying what you make and how much you owe doesn’t do any good. You will get generic advice about everything and nothing under the sun.
You are paying almost 4k per annum to service your 5k personal loan? You need to try hard to get a line of credit to get rid of the cc debt and this oerdonal loan.
The most immediate thing you can do is move the debt to a lower interest rate, the most common methods are putting in on a LOC (line of credit) or a balance transfer card (there’s a one time fee of 2-3% but then for at least 6 months it’s 0% interest). Doing that reduces the costs immediately.
After that, assuming the debt didn’t get consolidated in one place, pay down as much as possible on the highest interest debt, while only doing minimum payments on any other debts. Like the first step, it is the optimal way of reducing costs.
Now, just start paying it down as often as you can. Most months you have $2900 income. After the expenses you listed you have $1985, and after I assume $400 for groceries, you have $1585 left over. You mentioned no other expenses, so I’m going to assume you have *at least* $1000 a month to pay down debt – with that alone this should be cleared within a year. But since you are bi-weekly, that means there are 2 months you get an extra $1450 which you could *entirely* use for debt reduction.
Given your income therefore, the main problem seems to be you are spending a lot on items you have not listed. Therefore, make a budget and stick to it.
If you usually work more than 40 hours, but aren’t paid for it, confirm this is allowed under your provincial employment standards. While many provinces have overtime exemptions, they’re usually intended to hit high income salaried workers, not sometime who thinks $12k is a huge debt.
It sounds like you’re getting stiffed at work, and need to stand up for your rights.
If you have decent credit you can try a balance transfer. Open a new card that has a balance transfer offer for 0% or 0.99% for 9-12 months. That’ll seriously cut down on the interest portions you’re paying of the CC. Then tackle the PLC debt and make the minimum payments to the credit card.
List all debt smallest balance to largest. Anything you have saved over $1000 put it towards the smallest debt. Make minimum payments on the rest and throw every dollar you have extra at the smallest debt until paid off. Then go to the next smallest and the next and so on and so on, until they’re all paid off. Once all debt is paid save 3-6 month emergency fund in a high yield savings account. This last step is very important. STAY OUT OF DEBT!! No more credit cards, close them all down. No car loans, you’re paying cash.
Cut all unnecessary spending while paying off debt. No eating out, no vacations, no weekends out at the bar. It is going to be uncomfortable and downright suck, but when you reach the other side, you’ll be happy you sacrificed.