# What to do with my deep hole



## jamze (Jul 9, 2012)

My debit is a follows

180k Mortgage
20k line of credit
20 K on credit cards
9 K on car loans

Value of rsp 30k
house worth 400 k

i am always in my overdraft every month
should I get a 3rd mortgage to pay of my bills


Any help is appreciated (up to my neck here)


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## cash (Mar 5, 2011)

It's hard to say what you should do because you didn't mention what you're spending, what you're making, or how old you are. As long as you're in debt, I would decrease spending and work overtime/get a second job until you've cleared the line of credit, credit cards and car loan. After that, the mortgage shouldn't be too bad provided your income and spending habits are in order. 

I would start by making a spreadsheet to track your expenses for the past 6-12 months and figure out what you can cut. You could also sell your car(s) and buy some reliable old cars for like 3k. If you've got anything else around the house of value to sell, that will help you get out of debt too.

Don't get a third mortgage to pay your bills, spend less than you make every month, and it won't be an issue to pay your bills.

You should also check out Dave Ramsey, he helps people like you all the time.


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## Spudd (Oct 11, 2011)

What's the limit on your line of credit? You could take out more LOC to pay off the credit cards at least. Those must be killing you with interest fees.

Aside from that I would suggest analyzing your monthly spending and see where you can cut back. What's your current income/spending? If you live in the city, could you sell your car to get rid of the car loan and take the bus or bike instead? Or if you have 2 cars can you sell one? Cars are a huge expenditure between insurance, gas, maintenance, paying for the car itself.


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## dogcom (May 23, 2009)

For sure find out monthly spending and then see if you can stop the bleeding into LOC and credit cards. If you can and you can free up money every month to pay down LOC and credit cards then go with a well thought out plan for the now and the future to your bank and then consolidate.

This exercise will show to you you can do it and gives you extra pressure to succeed by showing the bank you can do it. Just going in and reducing your costs by consolidation won't help if you are just going to start racking up the credit cards again.


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## Square Root (Jan 30, 2010)

It's not rocket science. i am sure you know what to do. Spend less or earn more.


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## Just a Guy (Mar 27, 2012)

Depending on your age, you may be in great shape. I think money sense magazine published that the average net worth of Canadians I their 40's was only about 20,000. Technically, your net worth is 10 times that, though you are house rich and cash poor...also like most Canadians...

I'd be concerned over spending habits either way, if you can't afford it, don't buy it until you have the cash for it. Credit cards are not cash.


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## cash (Mar 5, 2011)

The people mentioned above will need to work until death or be paupers once they're old. If you want to be an "average" person you're probably screwed. 

If you want any good advice, you need to post your age, income and annual expenses.


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## Plugging Along (Jan 3, 2011)

Just a Guy said:


> Depending on your age, you may be in great shape. I think money sense magazine published that the average net worth of Canadians I their 40's was only about 20,000. Technically, your net worth is 10 times that, though you are house rich and cash poor...also like most Canadians...
> 
> I'd be concerned over spending habits either way, if you can't afford it, don't buy it until you have the cash for it. Credit cards are not cash.



I don't this person is in great shape regardless of age. His networth may be good, however, his cash flow has been negative consecutively. I assume this because he says he has been in overdraft every month. It will be cash flow that sinks you.

OP needs o figure out where the spending is and cut that down. A consolidation of credit may only be a good idea IF the OP has the spening under control, and is debt was due to circumstances beyond his control, or those circumstances have changed. Otherwise, the debt will become a problem again at a later time.


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## sharbit (Apr 26, 2012)

Can you move that credit debt to your LOC? Is the LOC a secured line against your house? If not then it should be; you'll get a much better rate. Your credit card should be top priority because you're likely paying 300 in interest each month.

You can also consider refinancing and consolodating all your debt into your mortgage to aleviate your cashflow problems.

I would leave your RRSP's where they are because withdrawing them will just mean you'll have to pay tax on them.


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## corezz (Jul 10, 2012)

jamze said:


> My debit is a follows
> 
> 180k Mortgage
> 20k line of credit
> ...


Would it be possible for you to rent out several parts of your home? At least then the income can help to start to reduce your credit card debt (or Line of Credit -- which ever has the highest interest rate).


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## Cal (Jun 17, 2009)

Hard to offer suggestions unless you gove more info such as why you are in overdraft every month, family spending too high, servicability of your debt, rates, did you have a temporary set back, illness?


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## hystat (Jun 18, 2010)

depends where OP lives. If in my neighbourhood, sell the executive $400K house and move to a median $200K house.


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## Sampson (Apr 3, 2009)

I did a double, triple, and quardruple take on the title of this thread.


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## Helianthus (Oct 19, 2010)

Sampson said:


> I did a double, triple, and quardruple take on the title of this thread.


:biggrin:


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## Taxsaver (Jun 7, 2009)

To get out of the hole, he decided to make one easy cut: internet...


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## Taxsaver (Jun 7, 2009)

He was talking about his deep hole. I'm now wondering if we're talking about the same one...


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## heyjude (May 16, 2009)

You are living above your means. That is not sustainable. Your priority must be to live below your means and pay off as much debt as possible as quickly as possible. Start with the debt with the highest interest rate, undoubtedly the credit card. 

There are lots of good suggestions here:

http://www.gailvazoxlade.com/


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## Square Root (Jan 30, 2010)

Pretty hard to take these kind of first posts too seriously. We often never hear from them again. The adivice is often self evident too.


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## Sherlock (Apr 18, 2010)

Yeah, what's with all the people who make a post asking a question, then leave and never post again. It seems to happen a lot at this forum. Do they forget that they made the post, or do they read all the responses but just don't bother replying any more, or what?


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## MoneyGal (Apr 24, 2009)

We don't usually tell them what they want to hear, methinks. "I bought a condo in Vancouver! I want you to tell me this is a good decision! I am deeply in debt - what miracle cure for debt can you reveal to me? I want to start investing...here are some niche stocks I'm interested in...by the way, I have ZERO investment experience. Tell me what to do!"


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## kcowan (Jul 1, 2010)

+1
I think they are looking for reinforcement from others who are drinking the kool aid...


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## ddkay (Nov 20, 2010)

Sell your house, sell you car, move downtown, rent an apartment, take the bus, pay your debt, live happily ever after


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## Taxsaver (Jun 7, 2009)

I was never sad for this man. After all, his net worth is about 200K!!


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## Square Root (Jan 30, 2010)

MoneyGal said:


> We don't usually tell them what they want to hear, methinks. "I bought a condo in Vancouver! I want you to tell me this is a good decision! I am deeply in debt - what miracle cure for debt can you reveal to me? I want to start investing...here are some niche stocks I'm interested in...by the way, I have ZERO investment experience. Tell me what to do!"


Yes I think you are right. Not very interesting for us though. I will try harder to resist a cynical or sarcastic response in future.


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