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The getting out of debt thread!

Discussion in 'TRIBE Main Forum' started by Skipper, Oct 12, 2005.

  1. Skipper

    Skipper TRIBE Member

    (I searched debt and getting and there were a million threads...sorry for repeat)

    So most of us have one day logged into our online banking and said "shit, I've never been so maxed in my entire life!"

    Where does one begin? Student loans, credit cards, mortgages, money owed to family or friends, blockbuster overdue fees, library charges, car payments...how does one prioritize?

    When should one consider debt consolidation?

    Any other useful/tips advice for the indebted??
     
  2. Agent Smith

    Agent Smith TRIBE Member

    Start with the debt that generates the greatest amount of interest (usually credit cards). Use lower yield debt as a way to pay off the higher yield debt and work your way down. Carefully budget every payment.
     
  3. g0nz0

    g0nz0 TRIBE Member

    get a line of credit, consolidate and save.
     
  4. The Watcher

    The Watcher TRIBE Member

    *DING DING DING*

    Now is the time to contact your bank.
     
  5. dyad

    dyad TRIBE Member

    what sort of collateral do you need for debt consolidation or a line of credit or whatevar.

    do these things normally require a co-signer if you arent worth anything?
     
  6. echootje

    echootje TRIBE Member

    Skipper, it seems dumb, but plot your expenses, and income(s) and work out exactly where you are right now with your debt in excel (yes, add and subtract your debts/projected incomes). It will help you understand exactly where you need to prioritize and what kind of financial shape you're in.

    If you keep a running total (ie weekly) it will help you see some the progress you make, and seeing that, is encouraging :)

    Rob - oh yeah, and do what everybody else is suggesting, consolidate.
     
  7. The Watcher

    The Watcher TRIBE Member

    With my bank (RBC) it didn't take anything, mind you, I do have GIC's and RRSP's with them, and a Checking account, because of this, I'm a valued customer and they just added the Line of Credit on top of that because of my good standing with RBC.
     
  8. Chris

    Chris Well-Known TRIBEr

    Start with your bank with these conversations, they maybe able to offer you some help.

    I would first take notice of all your incoming cash, and outgoing, see what is really left over and what you really can afford.

    Maybe take out a Line or a Loan to payback all of your outstanding high interest credit, then start the monthly payments?

    Roll back exciting credit cards max limit to maybe $1K, or $5 bills, roll back credit cards so that you carry only one major credit card only.

    Stop using your credit card, and start making payments only.

    Dont worry Skip, dont let this get you down, but take control, and make that first step.
     
  9. Sleepy Giant

    Sleepy Giant TRIBE Member

    What's the normal interest on a line of credit for $10,000?
     
  10. dj Red Turtle

    dj Red Turtle TRIBE Promoter

    Good thing I don't have debt :p. Well at least not anymore. I had a HUGE OSAP loan coming out of University along with a $4000+ credit card debt. I made huge payments in the beginning then voila all my debt is gone. Now I can live off peanuts and not dip into my savings.
     
  11. scott

    scott TRIBE Member

    I am currently about $10K in debt on a debt consolidation loan. Been renting for the past 3 years and in 2 weeks, I'm moving back home. Yes....home at 24. Sucks but I'll be debt free in about 8 months then it's condo time!

    Moving home sucks:(
     
  12. Chris

    Chris Well-Known TRIBEr

    tough call, depends on a few factors, other assets you have, your debt service ratio, your credit history etc. Lines are pretty cheap right now, even better if work for an FI, and a great way to close out your existing debt. The trick is to not use your line in way of existing cash, but close it off if possible and not "open".
     
  13. scott

    scott TRIBE Member

    Around 4.5 %
     
  14. Sleepy Giant

    Sleepy Giant TRIBE Member

    I deal with a credit union. My student loan is at BMO. If I get a line of credit with the credit, everything would be at the same place. Use the line of credit to pay off the student loan and pay down the line of credit with any extra cash I have left over after spreading my cash around.

    I think I'd save money in the long run because it's a huge pain in the ass to drive over to a BMO branch to pay down my student loan.
     
  15. KillaLadY

    KillaLadY TRIBE Member

    1. Minimize your nightlife spending
    2. Start a budget, a simple spreadsheet is all you need, you really don't need anything fancy. Write down assets, liabilities, bills and their due dates... Do look over it at least once a week
    3. Write down every single penny you spend and on what
    4. Contact a Counselling Service or something like that if you need to get rid of some of the interest, they can help

    I have been managing my bills with no late charges on anything whatsoever for over 4 years now and it's all due to writing everything down.
     
  16. the_fornicator

    the_fornicator TRIBE Member

    lol

    I sucked up my nuts and moved back home to put myself on a 2 year plan to pay off all my debt. Well.... I only have 2 at this point in time and that's my car and student loans. I did some number crunching and even paying $500 a month on student loans wouldn't suffice.

    I figured I could pay off everything in 5 years while renting out a place or move home and pay off everything in 2 and have a good chunk of change left over for a down payment on a house/condo.

    pretty obvious answer for me. I guess I'm fortunate enough to have my parents help me out a bit in that aspect.
     
  17. scott

    scott TRIBE Member

    No shit eh? As of October 22nd, I will be living back home. I figure the short term pain (living at home) is worth the long term gain (buying a condo and being debt free).

    I'm in a sticky situation though. I had some money left to me (enough for a down payment on a condo) but I cannot go to the trustee and tell them I need the $ to pay off debt so I have to wait 'til that $10K is off the books....hence me moving home.
     
  18. the_fornicator

    the_fornicator TRIBE Member

    yeah, I figured if I can make it through 4 years of uni, 2 years at home should be a walk in the park.

    short term pain for long term gain. good luck with the money thing. wish someone would leave me a nice chunk of change -without dieing, that is.
     
  19. thom100

    thom100 TRIBE Member

    huh you have to pay credit cards back?
     
  20. Chris

    Chris Well-Known TRIBEr

    start hooking for extra cash?
     
  21. undercover_girl

    undercover_girl TRIBE Member

    I've been thinking that maybe these strip aerobic classes could start paying for themselves/I could write them off as professional development and my debt would become a thing of the past!

    :)
     
  22. MissBlu

    MissBlu TRIBE Member

    I had to move back home for the same reason...
    I suck with money, and my Dad is a C.A.... I am quite the disappointment, but one day, I will be debt free...
    The trick is STICKING with your created budget... The second you fall off, well it goes down hill from there (speaking from experiece)

    :)
     
  23. Skipper

    Skipper TRIBE Member

    I'm not really down about it - I'm just maxed out after our trip which was largely debt funded (but well, well worth it).

    I've already prioritized the credit card, and I'm going to knock the limit down with each $500 or $1000 I pay off. it's unnecessarily high right now.

    Moving home is not an option for me. Not because they wouldn't take me, but because any savings would be offset by the pay cut I'd have to take.
     
  24. scott

    scott TRIBE Member

    Sticking to a budget is all fine and dandy till the first 4-6 drinks....then the budget is useless, for me anyways.
    I think I just need to stop drinking/going out altogether for a while. It's so hard though when you've been doing it every weekend forever and all your friends are terrible influences.
     
  25. Poot

    Poot TRIBE Member

    Skipper, when I was trying to get out of a LOT of credit card debt a couple years ago, I just kept having them drop the limit with each payment, like you've mentioned. It was a last-effort at spending control, but at that time, when I needed it, it worked.

    By the time they start cranking it back up, you'll hopefully have the balance paid off, and be keeping it flat every month.

    Your trip was worth it, but try to go forward with the mindset that if you don't have the cash for it, it's not an option. Cash-payment only will force you to re-think what you really need to spend your money on.

    Also, set yourself up with a payment schedule, and really try to stick with it. At first, a large debt is overwhelming, but when you look forward to six months or a year from now when you expect to have a chunk of it paid off, it's very encouraging.

    Lastly, debt consolidation is an idea, but just be very careful that your now-clear credit card, or the line amount they advance you in excess of what your consolidation requires does not become additional debt.
     

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