Personal Finance

Financial Idiot - Trying to reform - looking for any advise I can find.

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  • Jul 14th, 2011 6:48 am
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Newbie
Jul 11, 2011
11 posts
North Vancouver, Bri…

Financial Idiot - Trying to reform - looking for any advise I can find.

Hi Everyone,

I'm a DINK (double income no kids). I'm a dink with a credit problem to the tune of close to $80k. Life used to be fun but then the creditor's started coming at me, this has made me have to grow up and kill my inner grasshopper.

I now find myself at the beginning of the daunting task of digging myself out of debt.

I've cut my spending to a minimum and increasing my debt payoff to the max.... it hurts but at least in a few years I'll speed comfortably again.

Anyone out there been where I am? do you have any advice or tips?
16 replies
Member
Sep 19, 2004
207 posts
44 upvotes
Edmonton
Resnick880 wrote: Hi Everyone,

I'm a DINK (double income no kids). I'm a dink with a credit problem to the tune of close to $80k. Life used to be fun but then the creditor's started coming at me, this has made me have to grow up and kill my inner grasshopper.

I now find myself at the beginning of the daunting task of digging myself out of debt.

I've cut my spending to a minimum and increasing my debt payoff to the max.... it hurts but at least in a few years I'll speed comfortably again.

Anyone out there been where I am? do you have any advice or tips?

I'm working my way out of a bit of a hole I created for myself after I graduated from university. Fancy new degree with a fancy new job, bring on the toys for the first year. Its been a tough habit to break but I found a good way for me to beat my finances was to keep track of them on an every pay day basis. How much did I get paid, how much debt got paid down, how much spending was unnecessary. I've got a line of credit at 25k, an rrsp line of credit at 4k, making car payments, making mortgage payments. Luckily I've recently moved in with my fiance and my monthly required operating costs are much lower then before, but it'll be a good 18 months I figure to pull me out of this.

I've also liquidated a few expensive toys that just don't get used, game consoles, computers, misc household items.
Sr. Member
Jan 30, 2006
620 posts
34 upvotes
Ohmsford wrote: I've also liquidated a few expensive toys that just don't get used, game consoles, computers, misc household items.
I'm not sure about the financial value of this but when I've done this it has certainly taught me about how much stuff is really worth, you rarely get 50% back on electronics.

OP: perhaps go into some vague rough detail on where you debt is and how you're approaching it now. There is plenty online about tackling credit card debt for instance.

eg.

http://en.wikipedia.org/wiki/Debt-snowball_method
http://en.wikipedia.org/wiki/Debt_consolidation
Member
Sep 19, 2004
207 posts
44 upvotes
Edmonton
wiresncode wrote: I'm not sure about the financial value of this but when I've done this it has certainly taught me about how much stuff is really worth, you rarely get 50% back on electronics.
May as well get some value back in the form of cash to put down toward some debt rather then have something collecting dust and depreciating further. You can always cut your losses on a bad purchase and get something back, rather then beat yourself up about throwing that money away and watching the thing waste away.
Newbie
Jul 11, 2011
11 posts
North Vancouver, Bri…
Hmm debt snowball is interesting.

As for toy's my crutch was adventures. Darn memories cost money!
Deal Addict
User avatar
Dec 26, 2006
3283 posts
567 upvotes
My tip is an obvious one. Make sure your interest on this debt is as low as it can be. What form is your debt?

It is probably too late for the OP, since collectors are in the picture his credit rating is probably such that he would probably have difficulty getting a consolidation loan or a 0% balance transfer card, but for others in a similar spot but not quite there, minimizing your interest is very important.
Newbie
Jul 11, 2011
11 posts
North Vancouver, Bri…
JoeyMBA wrote: Checkout Debt Freedom Scamada.

They give out free jelly beans.

Hey Joey,

What is the scam? I haven't found alot of negative press on these guys... In fact I've found so little it worries me. This may mean that they are just very good/spending alot on search engine optimization.

Being that I'm looking for help, I'm hearing what they have to say tomorrow.

Thanks
Member
Oct 20, 2010
433 posts
104 upvotes
Resnick880 wrote: Hey Joey,

What is the scam? I haven't found alot of negative press on these guys... In fact I've found so little it worries me. This may mean that they are just very good/spending alot on search engine optimization.

Being that I'm looking for help, I'm hearing what they have to say tomorrow.

Thanks


Obvious Debt Freedom Scamada troll is obvious.
Newbie
Jul 11, 2011
11 posts
North Vancouver, Bri…
JoeyMBA wrote: Obvious Debt Freedom Scamada troll is obvious.

I'm sorry what?

I'm looking for help, seriously. I have no opinion of DF, I was genuinely asking because I don't want to get snowed over. I just want out of debt but the last thing I want is to get scammed and end up in a worse position.
I'm talking to this guy tomorrow. is it even worth my while?
Deal Addict
May 16, 2006
4308 posts
597 upvotes
What I'm trying to understand is what expectations do you have? These companies aren't magic, they cannot make your principle amount disappear or give you a 0% in house loan.

What I imagine they do is consolidate the debt, pay it off, give you a new loan at a lower than CC interest and give you long term to pay it back.

Forget all that, you have double income. It's simple, stop spending. Cut your bills in half, or remove them completely. Stop eating so much.

I'm not trying to be an ass, but how hard can it be to get out of debt, you put yourself there to begin with. Reverse the decisions you made and you'll eventually be out of it.

...and if the amount is too high (you haven't told us, or your income) file bankruptcy and start fresh instead of throwing money down a black hole of interest.
Deal Fanatic
User avatar
Dec 8, 2007
5550 posts
2220 upvotes
Sorry but this does sound *very* fishy ........... new board member signs up today, and all of their posts are related to debt and debt consolidation and some other shady company??? That they are just so happening are going to meet tomorrow??? Are we then all going to be surprised about the magical savings this company is able to get them and how they were once a skeptic but now they are not??

To the OP, you may very well be a regular joe that is looking for info, but these forums have seen a lot of things and if it looks like a duck and sounds like a duck ... its probably a duck.
Hydropwnics wrote:"TodayHello is a certified hustler and original gangster."
Newbie
Jul 11, 2011
11 posts
North Vancouver, Bri…
TodayHello wrote: Sorry but this does sound *very* fishy ........... new board member signs up today, and all of their posts are related to debt and debt consolidation and some other shady company??? That they are just so happening are going to meet tomorrow??? Are we then all going to be surprised about the magical savings this company is able to get them and how they were once a skeptic but now they are not??

To the OP, you may very well be a regular joe that is looking for info, but these forums have seen a lot of things and if it looks like a duck and sounds like a duck ... its probably a duck.
I get what you are saying, but I'm not a hack for some company. Just I guy in debt that knows little about paying off them off. When I do the math things don't look that great for me, and pressure like being told to repay $10k+ by going and refinancing with a high risk creditor seems like a step in the wrong direction, when I can commit to monthly payments of more than the minimum.

So in a way I am looking for a magic pill that these companies claim to have.

I asked the question because I
a. don't know anyone who's used them and I was looking for some first hand info

and

b. I can't find negative feed back about these companies <keep reading please>.... It's the internet someone somewhere should have got pissed off at them an wrote something. So that tells me that either they have never pissed anyone off(very unlikely) OR they spend major amounts of money on IT people(like myself) to keep all the nice fluffy/fabricated stuff at the top of the searches and shove the BBB designation(they pay for) in an attempt to build credibility.

My knee jerk is that the claims are to good to be true, but I'm scared and in debt and look for advice and help from multiple avenues.

I'm guessing they are just a big scam due to how much sh1t I got for asking about them. But being called a scam troll and being told they give out jelly beans wasn't really the factual info I was looking for. Sorry they spammed the board maybe there should be a sticky the states don't bother asked about debt (whatever) companies.

As for stopping spending we have, we'll reworked everything and have 70% of our net income going toward debt and now we are working to squeeze more by changing habits that waste money here and there (lost 3 pounds this month due to the lack of fast food).

Yes I do have a meeting with one of these companies tomorrow, as I mentioned debt, finically dumb, magic pill, etc. and after getting caught in your little troll hunt I'm super curious on what they do to bother you guys so much.

Thanks

PS: This is the last I personally will talk about these companies due to the controversy it causes. Any other advice it totally welcome.
Newbie
Jul 11, 2011
11 posts
North Vancouver, Bri…
So I have to write this for other guy's/gal's in my position. Debt "settlement" companys will help you settle and pay the "settled" amount of the debt.

BUT the debt at the debt on your credit report never shows paid. Furthermore, they (original debt - the settled amount) is sold to another collector who will come after you for the remainder sometimes years after.

Moral of the story YOU HAVE TO PAY YOUR DEBT IN FULL, NO MAGIC PILL.

told ya I'm not a troll :D
Deal Addict
Mar 18, 2009
1458 posts
286 upvotes
Renous
Not exactly. Those debt settlement companies will go to your creditors and negotiate a settlement. Say you owe $10K, they try to get it down as low as possible. Say they talk them down to $6K. They set up a payment plan for a set amount of time. At this point your debt considered 'settled'. They can't sell the remainder to anyone else. On your credit report it will show R7 (Some creditors will still list it as R9 until the last payment is received) but it will show paid at the end of the payment plan. Now, R7 is almost as bad as R9, so say hello to trashed credit for ... oh about 6 years. iirc it's reported as R7 for 3 years after last payment date (most payment plans are for 3 years). -- I could be wrong on this point.

So, if this is the ONLY option, it's not a horrible one. At least it will paid off.

If I made a mistake up there :arrowu: feel free to correct me. :razz:
Reserved for future time travellers
Deal Guru
May 29, 2006
10930 posts
3663 upvotes
OP google "consumer Proposal", it might be what you are looking for.
Deal Expert
User avatar
Dec 11, 2005
20134 posts
2962 upvotes
patpond wrote: Not exactly. Those debt settlement companies will go to your creditors and negotiate a settlement. Say you owe $10K, they try to get it down as low as possible. Say they talk them down to $6K. They set up a payment plan for a set amount of time.

Creditors typically only agree to these kinds of things when they know the debitor's only other option is bankcruptcy. They would rather have some debt than nothing. if the OP is a DINK, this seems very unlikely to be the case. You have to understand, you can't just throw up your arms and declare bankruptcy - it is a legal proceeding and you have to PROVE you are bankrupt. If he has a bunch of assets and dual income he will have a very hard time proving bankruptcy.

I agree with other people that really, you just gotta stop spending so much, and pay down your debt. If you really have a plan such that all debt will be paid in 3 years, then you are not in a very bad situation at all, compared to others. Just stick to your plan.
To be nobody but yourself - in a world which is doing its best, night and day, to make you everybody else - means to fight the hardest battle which any human being can fight; and never stop fighting. -- E. E. Cummings

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