I'm in serious financial trouble-any thoughts

[chillaxin]

Hey guys after reading the lounge in here I know there are a lot of guys who are better at balancing a cheque book than myself.

Anyways to make a long story short I have about 65k in unsecured debt(my life has been out of control for about the last 4 years, addiction issues) It's sad but I have no assets besides a car with 190k on it and I make about 70k a year. I hate my life and am mad at myself most of the time and I need to turn it around.

After that what would be my best options. Also I am trying to deal with my addiction issues but I need advice about what I should do financially. I could try and pay it off or declare bankruptcy or get a structured settlement

Thanks

 

[chillaxin]

wow you make 70K/yr and can't balance your finances...are you a ticket collector?

No just incredibly irresponsible

 

[bestillmehard]

My suggestion would be to get help for your addictions first. Once you have a clearer mind you may see your finances in a different light. Depending on your addiction....drugs?...gambling?.....there are many places and resources to assist you. Good luck and godspeed

 

[The Crunge]

No just incredibly irresponsible

How supportive of you.


This certainly happens to the best of us. IMO, best option is to visit your bank, let them know your situation, and take the hit, but hopefully get your financial life back on track.. Probably also a good idea to visit the Centre for Addiction and Mental Health. The old cliche of admiting you have a problem is very true. Good luck!

 

[Juldet]

You can file a "bankruptcy proposal" under the old rules if your debt is 75k...you are not bankrupt if 50.1% of your creditors accept your deal. The new rules set to go into effect in 2008 allow a proposal for debts up to $250k. You still get some flak on your credit rating but it is better than going bankrupt.

 

[rafterman]

Do a google search for financial counselling services. Most jurisdictions have not for profit agencies that can assist.

You need a budget for necessary monthly costs and a plan for paying off your consumer debt over time.

You need to cut up your credit cards.

If your addiction issues are unresolved you should seek counselling for these problems as well.

Bankruptcy stays on your credit record for several years and should be a last resort.

 

[fijiman]

Hmm..

$65k of debt.

If that's running at an average of 15% (I presume a big chunk is credit card), then you have debt servicing costs of $10k a year.

With income of $70k in toronto? After you pay your EI, CPP, employer pension deductions, your taxes, you are down to $45k. Take off the $10k of debt servicing and you are at $35k.

Doesn't leave much room to pay down the principle.

My advice?

1. Max out your credit, save up enough cash for 6months living expenses,
2. hide the cash somewhere (perhaps with a friend who will put you on an allowance so you don't fuel your addiction
3. quit your job.
4. declare bankruptcy.

With no income they won't contest your bankruptcy. Lay low until you are discharged and deal with your addiction issues (ie keep your income low).

Then start from the beginning.

Note: if a big portion of your debt is student loan, then this may not be a good plan as student loans don't clear off with bankruptcy.

fj

 

[Perry Mason]

Fijiman... no one could give worse advice than what you suggest!!!!

Chillaxin... you have financial problems, but you are far from being in deep trouble, as you say, if you owe the equivalent of only one year's earnings.

Get help both for your credit and for your your addiction, as others have suggested... you can be back on your feet without too much "discomfort" within 2 or 3 years if you do things right... what you need is good counselling and advice!!

Don't give up! Don't quit!

Good luck!

Perry

 

[papasmerf]

Hey guys after reading the lounge in here I know there are a lot of guys who are better at balancing a cheque book than myself.

Anyways to make a long story short I have about 65k in unsecured debt(my life has been out of control for about the last 4 years, addiction issues) It's sad but I have no assets besides a car with 190k on it and I make about 70k a year. I hate my life and am mad at myself most of the time and I need to turn it around.

After that what would be my best options. Also I am trying to deal with my addiction issues but I need advice about what I should do financially. I could try and pay it off or declare bankruptcy or get a structured settlement

Thanks

Bout time you take responsibility for yourself..........You make enough cash to pay off the debt but you need to want to...........You want an easy out buy a straight razor.

 

[longlegs12]

If your trying to turn over a new leaf and wish to pay off the debt then I recommend a Consumer Proposal...It stops the intrest and combines the debit into one nice tidy payment every month and is structured over years.

If you can not pay the debt and are not willing to try and make ammends then bankruptcy is the way to go....

But in both cases be prepared to have a credit score so low that you won't qualify for even a high intrest rate card and this will last for min of three years on a proposal and as long as seven on a bankruptcy. So if you don't need credit for a new home or a move or a car or any kind of credit what so ever these are your options......

If your issue is spending on credit this is a sure way to prevent you from aquiring any new debit.

In any case you can can talk to most finacial reps for free and they can steer you properly....
just my personal opinion, please seek out professional advice before you choose. Samxo

 

[Back Burner]

How about stop spending your money on hookers?

 

[lickrolaine]

if I made 70k on a consistant bases,I could afford an addiction.
If you take care of your addictions,ie,stop,you will have a lot more disposable income then you think,just put your nose to the grindstone and forge ahead.Remember,as long as you have a job it is possible,no job is when you will be in trouble,

 

[Questor]

Get control of the addiction. You won't solve your debt problem until you do.

 

[Moraff]

First, get some professional help for your addiction. You have admitted you have a problem which is a big step in the right direction. But you need the help of a professional to ensure that you continue along that path.

Secondly, get some professional advice from a financial person. You haven't specified what your debt is, but since you say you have no assets other than a car I'm assuming that there's no mortgage but probably a lot of credit card debt at a high interest rate. The financial consultant can help you put together a proposal to your creditors that offers a reasonable plan to restructure your debt load into something that can be managed.

You should be able to avoid bankruptcy but you need to start the process now while your relationship with your creditors is still good (I'm assuming anyways) rather than wait for collection agencies to get involved.

Get professional help for your two problems now!

 

[shrek71]

Get control of the addiction. You won't solve your debt problem until you do.

I agree with that statement. Financial problems aren't solved with money. They are solved with planning, attitude shifts, discipline and what not.

I disagree with those that said to get a consolidation loan. That doesn't get rid of your debt, it just lumps it all in one spot. In fact it may cost you more in the long run in interest if your payments are spread out over a much longer time frame.

Step 1 of the recovery process is to stop the bleeding.

Good luck to you.

 

[dcbogey]

I disagree with those that said to get a consolidation loan. That doesn't get rid of your debt, it just lumps it all in one spot. In fact it may cost you more in the long run in interest if your payments are spread out over a much longer time frame.

Step 1 of the recovery process is to stop the bleeding.

Good luck to you.

Depends on the interest rates on the current debt vs the consolidated debt. Most banks won't give a consolidation loan with a term longer than 5 years.

 

[frankcastle]

Okay one person worked out that dude would have 35 K/year to pay down principle and make ends meet. You can do it.

How about looking to get roommates or live in a basement or back in with your parents? Find a cheaper place to live.

Get rid of cable. Internet can pretty much provide you with the same if not more entertainment. I think keeping the internet is not a bad idea because a person needs some entertainment and there's a lot on the net.

Start cooking for yourself instead of eating out (that saves a ton).

Can you get by with the TTC? You could avoid all the costs with the car. Heck sell the car. You won't get much for something with 190 K but hey let's face it any money towards your debt will help.

Reduce your use of A/C in the summer and heat in the winter. A difference of a few degrees and dressing appropriately should take care of that.

Use only one phone line or cellphone. Reduce the plan and don't use it as much.

Cut back on non essential things or find cheaper ways to acheive them.

Realize that paying this debt off is going to take time so just be patient. It's happened and now ya gotta deal with it.

Remember university students pay tuition and survive on much less than what you are making.

As for your addiction try finding a support group. And one of the big successors for people kicking a habit is keeping busy and avoiding places or people that are associated with the addiction..... okay that was two successors.

Good luck with all that.

You're going to have to tighten the purse strings but you can still find a lot of enjoyment. Libraries are great for free entertainment ranging from books, music, movies. Free stuff happens around the city.

Start by paying off whatever has the highest interest rate first.

 

[21pro]

^ great advice frankcastle. i've made myself a multi-M following such principles.

to the OP (original poster)... How secure is your job?

 

[chillaxin]

^ great advice frankcastle. i've made myself a multi-M following such principles.

to the OP (original poster)... How secure is your job?

I can't really say about my job security. Let's just say it's not the most secure(another reason why my actions have been stupid) I think most likely 5years from now I will have the same job but I cannot say with a 100% certainty.

Also I do not live in Toronto so the TTC is not really an option.

Thanks to everyone for the advice. Ultimately I will have to find something that brings me the same enjoyment as my vices have brought me or at least be as rewarding. I could sure stand to lose a few lbs.

Once again thanks all

 

[frankcastle]

From a nuts and bolts perspective here are two more thoughts.

Obviously I've had debts to pay off in the past (nothing like yours but following the advice I gave you I knocked of 25 K which took 3 years but making much less than 70K).

1) is there room on any of your lines of credit etc? If so then shuffle your money around. Max out the lower interest rate things like lines of credit and move the money over to your credit card. You owe the same amount but at least you will accumulate less interest.

2) see if the bank will increase your limit on any credit that's of lower interest. In other words line of credit instead of credit card. Again if they will do that then great you owe the same amount but again are carrying less interest.

Any chance of picking up a second job? Doesn't have to be full time.... could be part time, seasonal, or one offs.