#DebtHelp #FinancialAdvice #MoneyManagement
Hey everyone! 👋 Looking for some advice on the smartest way to tackle my $71k debt. Here’s a breakdown of my situation:
💳 $20,000 credit card debt
💰 $15,000 line of credit debt
📉 $35,000 high-interest installment loans
My monthly base expenses are:
🏠 $1,750 rent
💡 $150 utilities and internet
I co-own a condo with my parents with a mortgage of $350,000 at 5% fixed rate. My yearly income is $130,000.
I want to get rid of this debt and reduce financial stress. Any tips on how to proceed?
One possible solution could be:
1. Create a budget and cut back on non-essential expenses
2. Focus on paying off high-interest debt first
3. Consider consolidating debt for lower interest rates
Share your thoughts and let’s help each other out! 💪💰
I would look into consolidation and the just attacking it with every money I got after building yourself an emergency fund.
Sell the condo immediately. Or at least your interest in it. This shouldn’t even be a question. 40% interest on $35,000? That’s $14,000/year. That’s insanity, and you’re still paying rent anyway. You have a decent salary, but it’s not going to hardly make a dent in those debts at those interest rates.
Get rid of that installment loan immediately. Keep your expenses as low as you can until it’s gone. They’re so killer I would sell my home for the equity before taking one out if it was an option.
Call the CC companies. Sometimes they’ll work with you to drop the interest rate and forgive some debt if you’re in a tight spot and show you’re willing to work with them to settle up.
A licensed insolvency trustee would be able to give you their professional opinion and potential options to manage and reduce your debt. I’m not certain and I’ sure someone around here knows more about that process than I do, but there might be issues going that route with your mortgage and renewal.
You list rent as a living expense and not any mortgage payments, but then say you co-own a condo that’s mortgaged. What’s the situation there?
File a consumer proposal. All interest goes away. Payments are made over 5 years monthly based on what you can fairly pay back. Comes off your record 3 years after your last payment.
Oh lawd, $35,000 at 40%(!) interest?! That has got to be the one that gets paid first.
you should absolutely find a way to consolidate your debt into a lower interest rate, if you cant do that then do the minimum on the other debt and pay off your highest interest first working your way down. consider selling the condo as your current debt is likely to outpace the positive gains from it, however that is something that youll need to talk to your parents about since you co-own. and lastly (this one can be tough) consider trying to live off of something like 30% of your wage if possible for a year or two so you can put a large amount of money into getting rid of your debt and building up a nest egg to fall back on.
Can’t say I’ve ever met anyone smart enough to have a job paying $130k a year, that is also dumb enough to build up $71k in debt.
Call me crazy but I was in roughly the same situation as you after I tried being an owner operator. You make enough and have low enough expenses that I would just attack this in one way. Your credit is probably decimated but you own a home. Can you get a consolidation loan against your condo ? If so, I would do that and hit it with everything you got. You should be pulling in almost 8k net a month. If you drop 5 grand a month using a snowball method , you would smash this debt in no time at all.
Pay down the 35k like there’s no tomorrow
Pay the minimums on your credit card and LOC (FOR NOW!) and put every cent you have into the installment loan (as it has the highest interest rate, pay it off first!). When this is done, then pay the credit card (likely has a higher interest rate than the LOC, which is why you pay it second), and then, finally, pay the LOC. This is called debt snowballing.
Cut up the credit card and remove it from your mobile wallet so you can’t use it anymore. It doesn’t exist anymore to you.
Your budget is missing a lot of items. Do you not eat or brush your teeth? How do you get to your job?
Are you bleeding cash on the condo rental? Many are, if so sell it. You can pay this off in 3 yrs, if your frugal.
Your income is solid, so I wouldn’t recommend the consolidation, not worth it IMO.
How much equity do you have in the condo? Can you consolidate at your high interest loans into a HELOC and aggressively pay it off?
Wth did you purchased at 40% interest? 2 acres on the Moon? Start with that. Write down a strategy and spending weekly plan, thats way you’ll stick to it. Good luck.
I was at 60k in debt to CC and LOC. And was making less then you. But I didn’t have the really high interest at 40 percent that you have. After around three years I am at around 5K still owed. So it can be done but that high interest one is the one that makes it so tough.
Please visit your bank for debt consolidation.
Condo needs to be sold like now and get that 35k gone
Ask bank for another line of credit to pay down the 35,000 debt. Don’t sell your condo, this is doable with your income just live frugal.
No offense, but what baffles me is that people can get into high paying jobs (130k) and still make choices like they are a 5 year old at disney world who stole their dad’s wallet.
I truly do question our educational system…
lol 40% interest? live off coupons until that’s paid off.
There is no magic to it. See here: https://x.com/ramit/status/1749202373711405530
Standard or snowball method. Spend less than 5 minutes deciding. But with the 40% interest, do the Standard method.
Wtf on the rates! I threw up in my mouth reading that.
Get a HELOC on property or a consolidated loan at the bank asap!
List the condo this weekend or have your parents buy you out.
Your expenses seem pretty low and your income is sweet. Set a monthly budget and stick to it. Everything that’s left, throw it immediately at the highest interest debt. Any extra income you receive (tax return etc) – throw it at that debt. Pay the minimums on the other two until you pay it off. Once that’s done, throw everything you have at the next highest interest debt (I’m guessing the credit card?), and so on. You can totally do pay this down if you’re diligent! Good luck.
Lots of good advice here, but I just want to say congrats for getting back on your feet and pulling in a healthy income. By and large, it’s not easy for anyone to get their shit together after hard times. You’ve got this.
Assuming your condo value has gone up I would have it appraised and refinanced. You can get a line of credit for up to 80% of the value.
You still owe the same amount but interest would be the lowest in this case.
Debt consolidation, second job, cut up CC.