Personal Finance

Dealing with huge debt

  • Last Updated:
  • Sep 10th, 2018 11:36 pm
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[OP]
Sr. Member
Aug 29, 2008
647 posts
33 upvotes
Toronto

Dealing with huge debt

Hey I'm here to ask for personal finance advise.

I recently graduated from university, I had my own business as well for several years. While trying to do both, I ended up focusing very little on the business and wasn't very profitable. I put a ton of debt on my credit card because of that. The good part is I graduated, the bad part is that I have 27k on my credit card racked up over the years. I also have 40k on student loan.

Now I'm working making $2700 a month in the meantime while I grab experience (as I did not do co-op due to the failure business)

So...I have 67k of debt to pay...bills barely cover living expenses and a bit more.

What would you do here so I don't pay for loans/credit card for the next 20 years? I considered bankruptcy 2 months ago while unemployed but I decided I would find a way without it.

Bills:
Rent: $700
Cell phone: $70
Car (cheap, owned and needed for work): $600 (includes average maintenance. repairs and depreciation, gas, and insurance)
Smokes: $200 (yeah I know I should quit but hard in the position I am in)
Food: $300
Extras: $200
Credit Card Interest: $360
TOTAL (not including student loan) = 2430

= $2430

I basically would like to know if anybody has been in this situation and what would you recommend, I don't see much of a way out unless I switch jobs and make 6k+ which is easier said than done. Any advise is greatly appreciated.
37 replies
Member
Sep 27, 2004
246 posts
40 upvotes
Ottawa
Quit smoking. No one can help you but yourself.
Deal Addict
Oct 13, 2006
1769 posts
338 upvotes
Burnaby
Try to transfer the credit card debt to something with a lower interest rate ie line of credit or a credit card with a lower interest rate for balance transfers (be careful with these if you dont pay it off it could make your situation even worse by charging an even higher interest rate because of the late payment). Or talk to the credit card issuer and come up with a plan to pay it back, they're usually pretty good with trying to work something out.

Cut cell phone, maybe go pay as you go and if you need to make calls do it using a VOIP app.
Member
Oct 16, 2017
203 posts
899 upvotes
Get rid of the car and reduce your phone bill.
Sr. Member
User avatar
Oct 19, 2016
649 posts
199 upvotes
Toronto
Bankrupcty would be one option if you dont need to take loans or need a new credit card for a long time...
Deal Addict
User avatar
Dec 13, 2016
2660 posts
2086 upvotes
$200 a month on cigarettes? You are on a dangerous path. There are dozens of diseases you can get from it in your youth, not necessarily just a lung cancer.COPD, Asthma, acid reflux.....

Forget your debt. Stop smoking.
Last edited by BiegeToyota on Sep 5th, 2018 11:19 am, edited 1 time in total.
Deal Addict
Jan 15, 2017
2030 posts
1418 upvotes
There are really only 2 options to getting out of debt:

1. Earn more. Either get another part time job or look for a higher paying job,
2. Reduce your expenses. Find every way possible to be thrifty.
Deal Addict
Nov 13, 2013
1496 posts
577 upvotes
Ottawa
skeet50 wrote:
Sep 5th, 2018 7:12 am
There are really only 2 options to getting out of debt:

1. Earn more. Either get another part time job or look for a higher paying job,
2. Reduce your expenses. Find every way possible to be thrifty.
Basically this and it sounds overly simple but the solutions flow easily from this. Get a part time job. Overnight gas attendant etc. You are young so the best solution might be something also social. Working in a mall, bar etc you will meet lots of people and get paid at the same time.

As others said see if you can get the credit card interest down. A Debt Management Plan could make sense. Basically these are negotiated between you and your credit card companies to lower the interest and consolidate into one payment. I think the non-profit CCS is a good starting point.
Member
Dec 22, 2007
372 posts
151 upvotes
Mississauga
Gero43 wrote:
Sep 5th, 2018 2:16 am
Hey I'm here to ask for personal finance advise.

I recently graduated from university, I had my own business as well for several years. While trying to do both, I ended up focusing very little on the business and wasn't very profitable. I put a ton of debt on my credit card because of that. The good part is I graduated, the bad part is that I have 27k on my credit card racked up over the years. I also have 40k on student loan.

Now I'm working making $2700 a month in the meantime while I grab experience (as I did not do co-op due to the failure business)

So...I have 67k of debt to pay...bills barely cover living expenses and a bit more.

What would you do here so I don't pay for loans/credit card for the next 20 years? I considered bankruptcy 2 months ago while unemployed but I decided I would find a way without it.

Bills:
Rent: $700
Cell phone: $70
Car (cheap, owned and needed for work): $600 (includes average maintenance. repairs and depreciation, gas, and insurance)
Smokes: $200 (yeah I know I should quit but hard in the position I am in)
Food: $300
Extras: $200
Credit Card Interest: $360
TOTAL (not including student loan) = 2430

= $2430

I basically would like to know if anybody has been in this situation and what would you recommend, I don't see much of a way out unless I switch jobs and make 6k+ which is easier said than done. Any advise is greatly appreciated.
see what you can cut.. cheaper rent maybe with some family help
try to re-structure your debt.. believe student loan interest is a write off so focus on the credit card stuff. You could just not pay and screw your credit but not good long term. see about a line of credit with the bank maybe should help reduce your interest. they may have a lower interest option. Maybe move up the job ladder sooner than you were thinking look for better paying employment. Its alot easier to find when you have a job already.
Jr. Member
User avatar
May 31, 2018
156 posts
210 upvotes
Saskatchewan
I see almost a quarter of your monthly expenses in only 2 non-essential and easily handled items...smokes and CC interest.

The CC interest can be halved if you can do as others have said, LOC or balance transfer. The smoking is even easier to deal with ... just don't. I smoked for 20 years and have been quit for 15 so know all about it. Stop. Smoking. Now. The payoffs are more than just financial.

It's good you're looking at this now and trying to get ahead of it. It isn't going to solve itself or go away quickly, so just mange it the best you can and try to focus on debt repayment as fast as possible.
Deal Addict
Jul 21, 2005
1376 posts
480 upvotes
Credit card interest is the easiest one to take care of. Go to the bank and consult them about debt consolidation. Anyone who willingly pays credit card interest loves to watch their money burn. Smoking is a good habit to drop if you can. Get a cheaper phone plan, I pay $76 for TWO people, it's a shared couples plan. With WiFi everywhere you really don't need all that much data so can probably find a cheaper plan. I am with Zoomer wireless personally.
Deal Expert
User avatar
Jan 27, 2004
40006 posts
4037 upvotes
T.O. Lotto Captain
Gero43 wrote:
Sep 5th, 2018 2:16 am
Hey I'm here to ask for personal finance advise.

I recently graduated from university, I had my own business as well for several years. While trying to do both, I ended up focusing very little on the business and wasn't very profitable. I put a ton of debt on my credit card because of that. The good part is I graduated, the bad part is that I have 27k on my credit card racked up over the years. I also have 40k on student loan.

Now I'm working making $2700 a month in the meantime while I grab experience (as I did not do co-op due to the failure business)

So...I have 67k of debt to pay...bills barely cover living expenses and a bit more.

What would you do here so I don't pay for loans/credit card for the next 20 years? I considered bankruptcy 2 months ago while unemployed but I decided I would find a way without it.

Bills:
Rent: $700
Cell phone: $70
Car (cheap, owned and needed for work): $600 (includes average maintenance. repairs and depreciation, gas, and insurance)
Smokes: $200 (yeah I know I should quit but hard in the position I am in)
Food: $300
Extras: $200
Credit Card Interest: $360
TOTAL (not including student loan) = 2430

= $2430

I basically would like to know if anybody has been in this situation and what would you recommend, I don't see much of a way out unless I switch jobs and make 6k+ which is easier said than done. Any advise is greatly appreciated.
Exactly which bank and type of credit cards are those?
Very important... bc if the cards happen to be with any of the big banks... they all have low interest rate options where you pay a small annual fee and the rates go down as low as 11.9% that 10% reduction will save you thousands a year considering you have such a high balance.
If you have a card with an institution that offers it... you can merely switch over to the low interest rate option without a new application or credit check.

Also quit smoking. I know its easier said then done... but trust me i’ve been there exactly like you... vaping is much cheaper.
You could also get a cheap dry herb vaporizer for marijuana from ebay. But use it to vaporize loose tobacco you can get in a bag for $26@ the corner store. It has more of a smokers hit that vaping can’t always do.
I’ve even rolled my own cigs. Now i vape with occassional relapses. But even vaping itself is super cheap. And if you focus you can ween off them all together. So no i’m not encouraging!!! But just being realistic with stuff that helps ween off a smoker from the habit.
Also check your work place benefits... most now offer smoking cessation products. I get $500 worth of smoking cessation products per year which is great...
Deal Addict
Apr 21, 2014
1992 posts
748 upvotes
Alberta
Gero43 wrote:
Sep 5th, 2018 2:16 am
Hey I'm here to ask for personal finance advise.

I recently graduated from university, I had my own business as well for several years. While trying to do both, I ended up focusing very little on the business and wasn't very profitable. I put a ton of debt on my credit card because of that. The good part is I graduated, the bad part is that I have 27k on my credit card racked up over the years. I also have 40k on student loan.

Now I'm working making $2700 a month in the meantime while I grab experience (as I did not do co-op due to the failure business)

So...I have 67k of debt to pay...bills barely cover living expenses and a bit more.

What would you do here so I don't pay for loans/credit card for the next 20 years? I considered bankruptcy 2 months ago while unemployed but I decided I would find a way without it.

Bills:
Rent: $700
Cell phone: $70
Car (cheap, owned and needed for work): $600 (includes average maintenance. repairs and depreciation, gas, and insurance)
Smokes: $200 (yeah I know I should quit but hard in the position I am in)
Food: $300
Extras: $200
Credit Card Interest: $360
TOTAL (not including student loan) = 2430

= $2430

I basically would like to know if anybody has been in this situation and what would you recommend, I don't see much of a way out unless I switch jobs and make 6k+ which is easier said than done. Any advise is greatly appreciated.
From the looks of it you don’t have a spending problem (have you tried vaping instead of cigs?). Your expenses are pretty reasonable. You could cut down your cell phone bill but 20 bucks isn’t going on o make much of a difference. You have an income problem. Is moving back with family a possibility? Uber and Lyft aren’t possibilities given the age of your vehicle. You have to get another part time job.
Deal Fanatic
Nov 24, 2013
5299 posts
1894 upvotes
Kingston, ON
What's the interest rate on your credit card? Who do you bank with? $360/mo on a $27,000 balance is 16% APR. Almost every bank has some form of "low interest" credit card option that forgoes rewards and insurance features for a better rate. MBNA TrueLine (fee version) and Amex Essential (no fee) are 9%. Really worth exploring.

After you get better interest there, cut down on your smoking (just reduce it, you don't have to eat the elephant in one bite), buy patches or gum, etc..

Also, while depreciation on your car is part of the total cost of vehicle ownership, it's non-cash; it's only realized if you were to sell your car.

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