# Im in some serious financial trouble and could use some advice



## Blackcat (Jan 3, 2011)

Im in some real trouble financially and could use some advice.
Im 35 and ive spent the last decade working in a coal mine in Northen BC.
My goal was to build up my credit rating and establish a savings then attempt to get my first home. That didnt quite go according to plan. The local mines closed a couple days ago and layed off around 700 employees including myself and my father. Now im not sure how to do damage control financially. I barely know how to manage my finances in general. Ill try to sum up my financial situation. I was making around $5000.00 per month and living payday to payday. I have a new car that im paying $520.00 per month on. New motorcycle and ATV that im making payments on $200.00 a month. Cell phone bill around $100.00 per month. Credit card maxed out 10,000 owing minimum payments 350 per month. My credit score is good and my credit record is clean but my total debt is around $70,000. I have zero savings and about $2000,00 in RRSPs. While I was working I just kept sinking further and further into debt. Ive never had anybody to teach me how to manage money. Just my parents and they are worse with finances than I am. Its like a train wreck.
Ive spent all these years trying to get it right and just getting further from my goals.
Now I have no idea what im supposed to do in this situation. The only thing im concerned about is saving my credit rating by any means possible so I can get my own place once im back on my feet. So far I have called telus and had my phone plan reduced. I called BMO the holder of my car loan to ask for advice about the car. They told me that my loan agreement cant be altered at all but I can defer one months payment. I just renewed my car insurance today at the bare minimum because I need the car to get around otherwise I would have just parked it.
Im in the process of applying For EI. A lot of people are telling me I should claim bankruptcy. I dont know if thats a good or bad idea or how it will effect my credit.
Including loan payments, insurance, and various expenses my monthly bills are around $2000,00 I dont think EI will make it quite that far. I do have a small metalwork business im trying to get off the ground but it wont make nearly enough to cover the bills for a while. Theres also a number of other upcoming expenses. My dog is dying of cancer and has some serious medical bills. The car has some damage that has to be repaired by august and my deductible is $1000,00 and a few other expenses that keep popping up. Im in a lot of trouble and I have no idea what to do next. How do I pick up the pieces, is it even possible ? Any advice would help thanks!


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## randomthoughts (May 23, 2010)

Without a source of income that will cover your debts, you're pretty much out of luck if you're looking for quick solutions. On the bright side, if you just lost your job days ago, then at least you're taking action now.

You have no real assets and no way to pay off your debt. Even if you had an income, you probably wouldn't even make a dent in your debt over 10 years. Since bankruptcy is cleared in 6-7 years, plus added time to build a credit score - it's time to get that process started. Do not touch your RRSPs as they are protected from bankruptcy.

The goal would be to keep as much of your EI as possible and not using it to pay off debt that bankruptcy will wipe out. You need to find a job before your EI runs out... that part I don't have any insight into.

Moving forward - managing your finances isn't hard, but it does seem like you have some issues with impulse control. 
-Never buy anything that is not a necessity with credit. EVER. AGAIN.
-Avoid buying anything that is not a necessity before saving for the future
-When you have access to credit again, the only 'building up your credit' should be a credit card that you pay off in full, monthly
-Track your earnings/spending/saving... doesn't have to be detailed, but any month where your savings don't go up is a problem.

In the short term:
-if your dog is dying, it's time to say goodbye and not spend more in medical bills. Don't get a new pet.
-see about bankruptcy before spending any money on the car
-remember that there are no quick fixes... expect to take a similar time fixing the mess as you did making it

http://www.fcac-acfc.gc.ca/eng/resources/publications/budgeting/Pages/GettingH-Obtenirl.aspx
http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br02048.html
http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br03128.html


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## Just a Guy (Mar 27, 2012)

Well, your problem seems to be your spending habits more than financial ones right now. You need to get a handle on where and how you are spending $5000/month.

You have to start prioritizing your expenses. As callous as it may sound, your dog is dying, no point in spending money you don't have to prolong his suffering. 

Building up your credit rating doesn't involve spending every dime you make and borrowing even more, it's about paying back your debts in a timely manner. Buying on credit cards and paying them off every month (living within your means) will build up your credit rating the best. 

Time to look at your spending and cut what you truly don't need to spend, while looking for a new job. Maybe consider selling some of your stuff and get rid of your debts.

Next, start learning about saving some money (don't increase your spending).


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## OhGreatGuru (May 24, 2009)

You should probably see a credit counselor, with details of the contracts for all your debt obligations, to see what can be liquidated, salvaged, or consolidated. But don't be surprised if personal bankruptcy is your solution.


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## Daniel A. (Mar 20, 2011)

Bankruptcy rules changed in 2009 it is not a good option and they don't have to let you declare bankruptcy the upper limit is 250,000.00. 
You could easily be forced into a consumer proposal. 
It is much harder today than it was before Aug. 2009 

First get rid of the new car, Motorcycle, ATV and any other assets you have to pay down the total.

Not sure I'm reading the RRSP number right but basically anything contributed in the past 12 months would be removed in bankruptcy. 
Start learning the difference between wants and needs.


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## MoreMiles (Apr 20, 2011)

You need to sell all your toys, ATV and motorcycle and maybe even your car. You can rent a small basement apartment, use public transit, give up your dog, and stop your $100 monthly cell phone plan. You can get VOIP and watch regular TV instead of cable. 

Without changing your spending habit, your only option is to get a job that pays $100,000 per year. If you don't have the qualification to find such a job, then you have no choice. You have to live frugally on cookie jars like the TV show teaches.


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## Oldroe (Sep 18, 2009)

Only had 1 experience with a friend going bankrupt.

New they lost a house and 1 lost job. I get this call we are moving. So on the day I bring the truck to help, get it loaded up and off we go to the biggest Spanish Style house north of Whitby 6000 sq huge garage ect.

6 months later the bankruptcy goes down an they move to a more ordinary house 1700 sq subdivision house.

So they wildly inflated expense and live on the difference after the bankruptcy.


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## Cal (Jun 17, 2009)

It sounds like you were living just beyond paycheck to paycheck, but were able to keep going with a continuous paycheck. Sell bike, atv, you can't afford them. You shouldn't use credit, once you figure out how to pay it down, don't put anything on your cc unless you can pay it off in full when the next statement comes in.

Evaluate everything in your life that you spend money on. Cable, phone, car ins, even go to the dealership and see what they can do to help you get out of your payments, but still drive away with a car. I am assuming you will need a car for work, it may not be a nice car though. But consider moving to help with cash flow too.

Take any job/s you can get to keep some cash flowing, but keep looking for a better job, of course.

I do question the statement 'Ive spent all these years trying to get it right' as you certainly do not paint that picture.

It sucks but you will find a way to scrap by. You have to part with the toys and that will probably help you feel like it is a smaller hole to dig out from.


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## AltaRed (Jun 8, 2009)

OhGreatGuru said:


> You should probably see a credit counselor, with details of the contracts for all your debt obligations, to see what can be liquidated, salvaged, or consolidated. But don't be surprised if personal bankruptcy is your solution.


As Daniel A. said, bankruptcy may not be an option. But I agree with the part about seeing a credit counselor who will help put together a proposal to consolidate debts and free up cash by getting rid of what appears to be an expensive car ($520/month????), and the ATV and motorcycle. What would be wrong with a 3 yr old AWD basic auto? The problem has been expensive toys and perhaps just overall expensive spending on other things - period. How else could one get to so much debt?


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## Nemo2 (Mar 1, 2012)

Blackcat said:


> My dog is dying of cancer and has some serious medical bills.


The same day that my late wife died, my Border Collie was diagnosed with hemangiosarcoma....he lasted for 8 months, most of them great, but when the time came there was only one thing to do, (the vet bills were, indeed, expensive - and futile). As randomthoughts suggests, it may be time to just let the dog go.....there's nothing you can do, it's just the way it is. Sorry.


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## mind_business (Sep 24, 2011)

I'm disappointed that people would suggest bankruptcy as an option. How about temporarily, or permanently, moving to Alberta to work in the oil fields or oil sands. Or, check out governmental assistance to re-educate yourself, or learn a trade. There are plenty of options available in Canada other than going bankrupt. $70,000 debt is a lot, but still manageable. 

In the meantime, sell your toys, reduce all costs ... including satellite TV, etc. You should be able to live cheaply on an 'emergency budget'.

Good luck!


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## Plugging Along (Jan 3, 2011)

It's time to turn off the taps as my spouse says. You have a spending problem, and now with no income, it's going to be a big Problem.

Do not worry about buying a house for a while. Your goal now is to get out of debt and get your spending under control. 

You should not be spending a PENNY on anything not absolutely required! and even then see if you can get it cheaper.

Download your bank and credit card statements and figure out where your money is going for the last 6-12 months.
Write down every penny you spend now.

Sell your motorcycle, atv, and any of your other toys. The car may need to be downgraded too.

I would call all the places that you have bills with and see if there is a cheaper option. No eating out, no more beers at home or out, just eat cheap food. 

You need to find a way to get your expenses down. When my spouse lost his job when our second was born and I was on mat leave, we got our expenses down about 50%. We learned to save money every where from activities, to food, to insurance, even utilities. Maybe watch a show of extremes cheapskates, it was eye opening. My point is, you need to make some big changes


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## thebomb (Feb 3, 2012)

read www.mrmoneymoustache.com


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## randomthoughts (May 23, 2010)

mind_business said:


> I'm disappointed that people would suggest bankruptcy as an option. How about temporarily, or permanently, moving to Alberta to work in the oil fields or oil sands. Or, check out governmental assistance to re-educate yourself, or learn a trade. There are plenty of options available in Canada other than going bankrupt. $70,000 debt is a lot, but still manageable.
> 
> In the meantime, sell your toys, reduce all costs ... including satellite TV, etc. You should be able to live cheaply on an 'emergency budget'.
> 
> Good luck!


When I offer an opinion, it's purely on a logical basis with only the benefit of the recipient in mind. Emotions and morals are not directly applicable. (It rarely makes logical sense to do anything illegal, though.)

What it comes down to is that the OP needs to find out what's best for him. If he can work his way out of debt without ruining his credit rating, in less time than it would take to recover from bankruptcy then great.

From what he described, however, it doesn't sound like that's possible, so bankruptcy seems like the logical action - and, as you point out, does not mitigate the need to find a job/income and a lifestyle that can be supported by it.


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## Just a Guy (Mar 27, 2012)

If it makes you feel better, when I got injured and lost my income for a few years, I started to learn about investing. Thee were some very lean years, but being broke was a good motivator for me to learn. $70,000 is not really a lot of money in the long run. If you take this for a learning opportunity, and do what you need to do in order to fix the problems, you can easily turn your life around. 

Of course, I know many people who just sat back and complained about how life treated them unfairly and looked for the easy way out as well.


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## MoreMiles (Apr 20, 2011)

When one says that he has a $100 cell phone plan, it either means that it's a fancy subsided smart phone or plan with data and useless calling features. You can literally get unlimited calling cell phone plan for $20-40 these days. So this shows right away the OP is into material things and not pratical things. Declaring bankruptcy for only $70,000 will not be worth it... alike everyone else said. It's more important about changing spending habit instead of fixing the past.


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## mind_business (Sep 24, 2011)

To the OP ... contact your local SPCA, or other BC Pet Organizations, to see if they offer assistance with paying vet bills for low-income families. 

I re-read your initial post, and you mention that you're not good with finances. Your first step, which you've already done, is apply for EI. I'm assuming they gave you some indication of how much you could expect to get. If you post that information, then others on this board will be able to offer better, more detailed advice.

The next thing you should consider doing is listing ALL of your current expenses. Then chop the discretionary spending items to zero. This will require phoning companies, like you've already started to do, to cancel subscriptions, services, etc. Keep a 'basic' cell phone for job contacts. You should be able to get this all done within one day ... make it your job to get it done!

The next thing I'd be doing is contacting all of the local companies for potential work. If you're living in too remote of a community, then start job hunting outside of your area. Like I mentioned above, there are jobs in Alberta, but make sure you have one lined up before you come out here. If you have family to stay with temporarily, then consider that option to reduce your expenses. 

The next thing I'd do is sell all of the expensive toys you've accumulated. If you still owe money on them, then you should try to break even at the very least, so you don't have any debt remaining on these items. If your town's employment is largely based out of the mine, then you may have to sell your stuff in a community that has consistent employment.

Lastly, don't despair ... EVERYONE goes through hard times in their life. Just learn from your lessons, and you'll come out stronger on the other side. Sounds corny, but it's true.


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## Butters (Apr 20, 2012)

Listen to Dave Ramsey

He will tell you to sell everything you have, mainly the New motorcycle and ATV, those are un-needed toys...
You probably paid what 10k for them, and now they are worth 5k?
Suck up the 5k loss, and mark it down as stupid tax.

Eat beans and rice, rice and beans.
The only time you will see the inside of a restaurant is if you work as a second job.

You do NOT NEED A CREDIT SCORE
cut up all your cards, and live off cash

make a budget, every dollar has a name at the start of the month


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## donald (Apr 18, 2011)

I second moving(if you are use to working in a mine,oil rigs/pipeliner ect should be right up your alley,i'm sure the recruiting would also see it this way)Target remote high paying camp work and start over(sell the toys ect)put your head down for the next yr or 2 and evaluate.
You obviously have some skill in industry and obviously a hard work ethic.
Rig work prob wouldn't be a hard adjustment.
You got to play defense on the debt but don't just accept the earning/income side of things,i would personally get out of whatever mining town you are in(things will likely go from bad to worst if i am guessing the mine just laid off that x amt of employees.
sounds like your single and no dependents(just guessing,no mention in your post)if so,huge plus.things could be worse,good to remember that in tough times,one foot in front of the other.


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## carverman (Nov 8, 2010)

mind_business said:


> I'm disappointed that people would suggest bankruptcy as an option. How about temporarily, or permanently, moving to Alberta to work in the oil fields or oil sands. Or, check out governmental assistance to re-educate yourself, or learn a trade. There are plenty of options available in Canada other than going bankrupt. * $70,000 debt is a lot, but still manageable.
> *


It is.... when you have maxed out your credit cards at 21 to 25%! Minimum monthly payments on $10K at $350 a month....will take at least 40 months ( a few years).

I know somebody that is paying off a credit card and has been paying it at minimum payment for 3 years now..he had a stroke and can't work anymore...so he is paying off his LOC (maxed out at 10K) and
a $2500 balance on the credit card which has been closed by the bank. Negotiations with the bank did not bring him any relief. His only option (after consulting with a credit counsellor), was consumer proposal or bankruptcy. He's chosing to continue paying the mimimum on the CC and the LOC in order not to ruin his credit rating. Still manages to pay for car insurance and drive a 12 year old car and a monthly bus pass.


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## OptsyEagle (Nov 29, 2009)

Bankruptcy is the best road to take. You have been headed down this road for such a long time I doubt you would be able to find your way back. You will be a lifetime paying off that $70,000. They will take your car though. Listen everyone thinks they need their car to get around. It is a luxury, not a necessity. Anyway, it isn't yours, and it isn't worth $70,000.

That is what I would do. Just learn from it.


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## carverman (Nov 8, 2010)

OptsyEagle said:


> Bankruptcy is the best road to take. You have been headed down this road for such a long time I doubt you would be able to find your way back. You will be a lifetime paying off that $70,000. They will take your car though. Listen everyone thinks they need their car to get around. It is a luxury, not a necessity. Anyway, it isn't yours, and it isn't worth $70,000.
> 
> That is what I would do. Just learn from it.


If he's out of town, like in Northern BC or Alberta (Tar sands) he needs some kind of vehicle. Just getting around is a major problem up there and in the winter time with -40c temps, you can't wait for a bus or walk very far.
He's got to move out of there into a city that has bus service..or ride a bicycle to work. If he goes the bankruptcy route, that 7 years of no credit, everything will have to be cash. In any case, even with the consumer
proposal, his credit rating is shot, but not for 7 years..I think it's 4 years. 




> If your consumer proposal is accepted, you will
> 
> be responsible for paying either a lump sum or periodic payments to the trustee;
> be required to adhere to any other conditions in the proposal;
> ...



However, he needs to find a job real fast to be able to continue with the terms of any consumer proposal:



> If you meet the conditions in full, you will be legally released from the debts included in the proposal.
> 
> However, *if you are making monthly payments and miss three payments, or if your payment schedule is less frequent but your last payment is more than three months past due, the proposal will be deemed annulled.*
> 
> ...


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## lightcycle (Mar 24, 2012)

Oldroe said:


> ...the biggest Spanish Style house north of Whitby 6000 sq huge garage ect.
> 
> 6 months later the bankruptcy goes down an they move to a more ordinary house 1700 sq subdivision house.
> 
> So they wildly inflated expense and live on the difference after the bankruptcy.


How does that work? In a bankruptcy, you don't get to keep the house (unless it's a farm). There is no difference to live on.


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## fraser (May 15, 2010)

You might, for a start, consider 2 things.

Register immediately for EI. 

Then, get out of town. This should be your first priority. You need to resolve the income side of the equation first, then deal with the debt. Otherwise you end up in a black hole. It will be easier if you at least do it while you are on EI and have some steady cash flow for the basics.

There is nothing left for you in the Tumbler Ridge area. That mine will not reopen for a long time. You need to get a job and start a new life. Ft. Mac may be a great place to start. Similar environment, not too far. EI will not work...besides what happens when it runs out and you are still in Tumbler Ridge or Chetwynd (if that is where you are) Don't delay because your debters will not. You need that car and that credit card to get to your new work location-wherever it is. And if you you have some money in a bank, take it out. Keep some cash or open an account at a bank separate from one that you may owe money to just in case they decide to call the loan and empty your account.

Once you get out of town, perhaps even get a job, then visit a local not for profit credit counselling service. You need more help that we can give you on this board.
They will help you decide the best route to follow.


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## piano mom (Jan 18, 2012)

Sounds like you don't have a wife and children to support. That would have complicated things even more.


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## Mortgage u/w (Feb 6, 2014)

1- Start reading some books on personal finance and teach yourself how to manage your finance.
2- As many have pointed out already, sell all your toys; cars, motorcycle, ATV etc. 
3- Reduce your expenses dramatically. Go back to basics. (sorry about your dog but his days are numbered)
4- Before you adventure on owning a home, take a hold of your current situation. Learn to walk before running.

Some advise on Bankruptcy: Getting discharged from bankruptcy will take close to 1 year. In that time, no credit cards, loans, mortgages allowed. Once you get discharged, you can get a credit card again. You'll need to maintain that credit card in tip-top shape for at least 1 year. Only then would you be able to apply for a mortgage. Most lenders will require 2 credit experiences maintained for at least 2 years after bk discharge in order to qualify. So you'd have a good 2-3 years before you can own your own home. And if you miss one payment on that credit card, you'll be renting for a while longer. 
But until you do not master the art of 'personal finance', no use owning a home.


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## carverman (Nov 8, 2010)

Mortgage u/w said:


> 3- Reduce your expenses dramatically. Go back to basics. (sorry about your dog but his days are numbered)


Let's leave his pet out of this..I'm sure he feels badly already. It is hard decision to do the final act of kindness for them.



> Some advise on Bankruptcy: Getting discharged from bankruptcy will take close to 1 year. In that time, no credit cards, loans, mortgages allowed. Once you get discharged, you can get a credit card again. You'll need to maintain that credit card in tip-top shape for at least 1 year. Only then would you be able to apply for a mortgage. Most lenders will require 2 credit experiences maintained for at least 2 years after bk discharge in order to qualify. So you'd have a good 2-3 years before you can own your own home.


He will not qualify for a mortgage after declaring bankruptcy without a co-signer who has a good credit rating. Also what is not known is how much he owes on the vehicle, motorcycle, ATV etc that he has. IF those are not paid off, (and he mentions making payments against his vehicle/ATV), there will be LIENS against them, so he can't just go and sell them, because in the province that these vehicles are registered, there will be liens registered against them and the unpaid debt would have to be paid off before the liens are lifted.
In Ontario for instance, any loan against a vehicle that is registed with MOT must have a lien clearance certificate issued by the MOT before the buyer can re-register the vehicle
in his/her name. 
.so back to the $70k of debt.


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## lightcycle (Mar 24, 2012)

carverman said:


> Also what is not known is how much he owes on the vehicle, motorcycle, ATV etc that he has. IF those are not paid off, (and he mentions making payments against his vehicle/ATV), there will be LIENS against them, so he can't just go and sell them


Sure he can. You can buy and sell a vehicle with a lien on it, just like you can buy/sell a house with a mortgage on it.

You just have to make sure the lien is discharged before you register it with the Ministry of Transportation. If you're the seller, go to the bank with the buyer and have him write the cheque to the bank. Then the buyer will have a letter of lien release that he can show to the Ministry when he registers the vehicle.

Total non-issue.


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## Oldroe (Sep 18, 2009)

He rented this giant house for large rent. Then went bankrupt. So the huge rent is worked into basic monthly expenses. After the bankruptcy was final they moved to the smaller house and were required to pay $200 cash for 10 months. 

They also had 2 cars the bankruptcy took the decent Chrysler and left then with a beater Malibu. Budd said how am I getting to work in Bramalee. The bankruptcy guy handed him a card for Durham Dodge.


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## Daniel A. (Mar 20, 2011)

lightcycle said:


> How does that work? In a bankruptcy, you don't get to keep the house (unless it's a farm). There is no difference to live on.


Yes you can have a house in bankruptcy problem is someone else will likely be paying the mortgage.


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## Daniel A. (Mar 20, 2011)

Mortgage u/w said:


> 1- Start reading some books on personal finance and teach yourself how to manage your finance.
> 2- As many have pointed out already, sell all your toys; cars, motorcycle, ATV etc.
> 3- Reduce your expenses dramatically. Go back to basics. (sorry about your dog but his days are numbered)
> 4- Before you adventure on owning a home, take a hold of your current situation. Learn to walk before running.
> ...



Good luck getting credit anywhere but a loan shark.


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## Daniel A. (Mar 20, 2011)

The other big issue with bankruptcy is the Superintendent guidelines for what you are allowed to keep does not leave enough 

http://www.bankruptcycanada.com/Surplus-Income-Standards.htm 

http://bankruptcy-canada.com/bankruptcy-blog/surplus-income-limits-for-2014/


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## mind_business (Sep 24, 2011)

OptsyEagle said:


> Bankruptcy is the best road to take. You have been headed down this road for such a long time I doubt you would be able to find your way back. You will be a lifetime paying off that $70,000. They will take your car though. Listen everyone thinks they need their car to get around. It is a luxury, not a necessity. Anyway, it isn't yours, and it isn't worth $70,000.
> 
> That is what I would do. Just learn from it.


Just to put it in perspective, a welder (boilermaker, pipefitter) can make $180,000 if they work 6 months per year in the oil sands ... assuming that's all they work in the year. That's based on the typical turnaround 12 hours per day, 7days per week ... with overtime per their union agreements. Yes, this is a skill that would have to be acquired, but it should be an option for anyone who's able to do this type of work, and especially if they're in trouble financially. Most of the jobs in Ft. McMurray are camp jobs c/w all meals ... so expenditures should be low. I come from a family that promoted hard work, and look after your own problems. Yes, the Canadian safety net is great to have, but it should be a last resort.

I would not recommend bankruptcy for someone in this situation. It will not take a lifetime to pay this amount off, but if you claim BK, you will screw up your credit for years to come.


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## Blackcat (Jan 3, 2011)

*Thanks!*

All the advice helps and is appreciated. Since I posted this ive been thinking about my options. Your right im in the Tumbler Ridge area. Technically I have two homes. One in TR and one about 40 minutes from there. Both are in my parents name but I believe im on the title of the second home as well. The whole family worked at the mine. The original plan was to fix up the home in TR and sell it to pay off all our debts. My whole family is in the same situation. With the mine closeure I doubt the house will sell at all. We cant afford the payments on that house now. Im trying to talk the rest of the family into putting it up for rent. The location im at now is about 40 minutes from civilisation at the end of 14 kilometers of dirt road. However I dont have to pay room and board. I did the used car rout for years and kept getting into bad situations. Breaking down in the middle of nowhere at minus 20-40 no heater and so on. So I said thats it not worth the risk and got a new car. Now for my loans I should have been more speciffic. The car is $41,000 of that loan after interest. The motorcycle is $20,000 the remainder is for a few pieces of shop equipment and the credit card. The ATV is payed off. Currently my credit rating is quite good but im told I habe no room left for borrowing. The last few years habe been spent slowly reducing the debt. All ive managed is the ATV lol. Your right... I am thinking of what I can sell. The car could go. The ATV gets more use as essential equipment where I am its more like farm equipment so thats less likely to go. The bike... Haha... I was a biker before I could walk. Your right it should go but I imagine ill be pennyless and living on the street before that goes. Anything else I have can go no problem. I do have printouts of all my finances over the years bank statments and so on. I have all sorts of charts that show my spending habits. Its actually a little disturbing. After the bills are payed my two highest expenses per month are fuel and food. After that its eating out. Im a heavy equipment operator by trade but I have welding school booked and pre payed. I start school in september. Becides getting my own place. My other goal since I was about 10 was to start my own metal work business. Just before the layoff I finished setting up my shop and getting the last of my equipment together. With my skills I could find work just about anywhere. The way I look at it is ive been struggling the last 10 years trying to get ahead while steadily sinking. Thats with a decent paying job. I dont really have the heart to do that anymore. Ive been fighting with some serious depression issues my whole life and the thought of grinding away for another decade. I cant even think about that but I will do what I have to do. So im kind of hoping I can take this opportunity to go to school, get my welding certification and get my metalwork business off the ground. It will take some time to pull it together and make enough to live off. I guess the biggest concern is how to do this without destroying my credit as it is or losing the few things I do own. Ive called the banks that hold the loans and credit card to get some options. They tell me there are no options. The plan atm is too sell what I can cut expenses like the phone (already done) it was the internet and such on the phone that made it pricey. Im going to give this business a go. If it takes off it will be easier to go back to work. If it doesnt take off ill have to go back to work anyway. Its true im bad at finances but its not for lack of trying. I just about live in the bank. Im always asking for a financial advisor but that never works out. Last time I went in and said I want an appointment to see a financial advisor... The bank teller said oh you dont need an appointment ill talk to you right now. That was pretty much useless she just did what ive done many times, added up my expenses on my statments and told me I have to save.... Yeah no kidding. I was actually hoping for more of a plan lol. So thats about it I guess. I do appreciate the help and I will make use of the advise. Im sure ill figure something out. Mostly its the emotional wall thats geting in my way. It feels like im doomed no matter what choice I make.


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## MoreMiles (Apr 20, 2011)

Most landlords check credits these days... with a BK and ruined credits, you will only have undesirable places left to rent. You will only qualify for prepay businesses, bank cards and cell phone included. Unless you have no plan for moving up the social ladder, you really need a good credit. Also be ready to see your ATV and bike disappeared one day by repo if you fall behind payments for a few months. Either way, you need to get rid of those anyway so you might as well do it the organized / least disruptive way. Like the above poster said, your debt can be repaid in just 1 year if you agree to work hard in oil fields to make $180,000 per year or live rent free with your folks. Now if you owe $700,000 then it's a different story (many failed businessman do) so $70k is really nothing. Some people own cars that cost that much so it is not really a level that 'ruins ones life' yet.


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## Addy (Mar 12, 2010)

OhGreatGuru said:


> You should probably see a credit counselor, with details of the contracts for all your debt obligations, to see what can be liquidated, salvaged, or consolidated. But don't be surprised if personal bankruptcy is your solution.


I'm leery of Credit Counselors - you know the ones, they have ads inside the buses. I'm not sure why but they seem to me to be selling snake oil. I'm hoping there are some good ones out there though, and my wariness is based on nothing more than intuition so I could be completely wrong. Anyone here have first hand knowledge of "Credit Counselors" and can shed some light on this?


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## Mortgage u/w (Feb 6, 2014)

carverman said:


> He will not qualify for a mortgage after declaring bankruptcy without a co-signer who has a good credit rating. Also what is not known is how much he owes on the vehicle, motorcycle, ATV etc that he has. IF those are not paid off, (and he mentions making payments against his vehicle/ATV), there will be LIENS against them, so he can't just go and sell them, because in the province that these vehicles are registered, there will be liens registered against them and the unpaid debt would have to be paid off before the liens are lifted.
> In Ontario for instance, any loan against a vehicle that is registed with MOT must have a lien clearance certificate issued by the MOT before the buyer can re-register the vehicle
> in his/her name.
> .so back to the $70k of debt.


So here's the mythbuster about bankruptcies and how it affects you credit rating as well as qualifying for loans - I would know since I am a mortgage underwriter:
1- it does NOT ruin your credit for 7 years. The 7 year myth is that the bankruptcy will show up on your credit report for 7 years - then it will disappear (unless you have double bankruptcies) This does not prevent credit obtention.
2- you do not need a co-borrower to qualify for a mortgage. As long as you can re-establish your credit with 2 credit cards or loans, maintained A1 for at least 2 consecutive years AFTER the bk is discharged, then you will qualify for a loan like everyone else.
3- when you declare BK, there is a transistion period where all debts need to be cleared/charged-off by the creditors. Usually takes 1 year to complete. Only once you get DISCHARGED are you eligible to apply for new credit. And you will qualify for a a regular credit card or loan 1 day after being discharged. Mortgages after 2 years of healthy credit.
4- For the loans that carry liens: most providers will seize the item (car, ATV etc) depending age and condition. Otherwise, they will simply be charged-off.
5- A home can be included in a bankruptcy but most of the time, the lender will help the client sell the home rather than foreclose it. This way, the bank will avoid losing large sums of money. And if the bank does happen to foreclose, then you reduce your chances dramatically of obtaining a new mortgage later on.

So next time people say they can't get a loan becasue they declared BK, 2 reasons: 1- they are not discharged yet 2- they did not re-establish their credit yet. 

The same applies to consumer proposal - I'd rather go BK than CP. When under consumer proposal, you will NEVER get credit until you pay off all your creditors since you are not considered to be discharged. Worse yet, once and if you do finish paying, the creditors still give you an R9 rating on your credit bureau. So my advise, avoid consumer proposal and push for bankruptcy. (I can hear the frowns).


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## fraser (May 15, 2010)

You could actually get buy with no car in Ft. Mac. If you live in a company camp transportation is provided. If you live in town, the company transportation is provided -directly to the site. There are hundreds of these buses. In fact many people bus rather than drive because the employer does not penalize you if you are late (traffic, weather, etc) on the bus but they do if you are late when driving your own vehicle.

I really think you should focus on the income side of your challenge. IF you do, your credit challenge may not seem as steep. Not certain what your skills are but I would assume you view the best outcome as getting a job, satisfying your debts, and learning to manage your money. Clearly you will have sell some asset, but this is a cost of your past lifestyle.


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## carverman (Nov 8, 2010)

Mortgage u/w said:


> So here's the mythbuster about bankruptcies and how it affects you credit rating as well as qualifying for loans - I would know since I am a mortgage underwriter:
> 1- it does NOT ruin your credit for 7 years. The 7 year myth is that the bankruptcy will show up on your credit report for 7 years - then it will disappear (unless you have double bankruptcies) This does not prevent credit obtention.
> 2- you do not need a co-borrower to qualify for a mortgage. As long as you can re-establish your credit with 2 credit cards or loans, maintained A1 for at least 2 consecutive years AFTER the bk is discharged, then you will qualify for a loan like everyone else.
> 
> The same applies to consumer proposal - I'd rather go BK than CP. When under consumer proposal, you will NEVER get credit until you pay off all your creditors since you are not considered to be discharged. Worse yet, once and if you do finish paying, the creditors still give you an R9 rating on your credit bureau. So my advise, avoid consumer proposal and push for bankruptcy. (I can hear the frowns).


Ok, good to know. I always been under the impression that building up a credit rating after bankruptcy is a long process and a complete discharge from the bankruptcy would be necessary.

Generally, society gives you a chance to re-establish yourself after BK, but that also depends on the person and what their intentions are in life. If their intentions is to rack up as much debt as possible and walk away from it, it's not really "fair" to the rest of us, who pay our debts as required. Certainly there are circumstances beyond our control that may require us to adjust our living standards, but walking away from large debt is perhaps an easy way out, and if the person does not change their lifestyle afterwards, they could experience the same situation over again.
I have no sympathy for people that max out their credit cards or LOC and then cry for help. Best to have a monthly budget, and try to save as much as possible for that worse case situation.


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## Mortgage u/w (Feb 6, 2014)

carverman said:


> Ok, good to know. I always been under the impression that building up a credit rating after bankruptcy is a long process and a complete discharge from the bankruptcy would be necessary.
> 
> Generally, society gives you a chance to re-establish yourself after BK, but that also depends on the person and what their intentions are in life. If their intentions is to rack up as much debt as possible and walk away from it, it's not really "fair" to the rest of us, who pay our debts as required. Certainly there are circumstances beyond our control that may require us to adjust our living standards, but walking away from large debt is perhaps an easy way out, and if the person does not change their lifestyle afterwards, they could experience the same situation over again.
> I have no sympathy for people that max out their credit cards or LOC and then cry for help. Best to have a monthly budget, and try to save as much as possible for that worse case situation.


Absolutely. There are 'good' bankruptcies and 'bad' bankruptcies. I've seen people declare bk for amounts under $10k! The shame should be on the trustees who allow such nonsense. People are usually unknowledgeable and rely on so-called experts, but as in everything, there are bad apples in every field.

Just to clarify your point, re-building your credit IS a long process. First, you need to get discharged from BK. That process is usually 1 year. Then you need to obtain and hold credit for at least 2 years AFTER being discharged. So if you do everything right, the quickest time frame you will be eligible for a mortgage is 3 years. If you do not get discharged, you cannot even get a Sears card!


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## Daniel A. (Mar 20, 2011)

Even after discharge you would have a hard time getting a credit card to start rebuilding I know from experience. 

The credit report will say R9 and slowly drops every year.


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## fraser (May 15, 2010)

You need to understand how to manage your finances before you even think of starting a viable business....otherwise you will not be in business for very long.

You also need to consider the chances of your business succeeding in TR/Chetwynd given that the area is about to become economically depressed. Or does your trading area include businesses outside of this area?


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## Blackcat (Jan 3, 2011)

*This all looks good*

In the last few days im actually developing a plan and a number of options are on the table. My family has five other vehicles insured. They are planning on un insureing these and were all going to use mine and split the cost.
My skills can get me work just about anywhere and I do have a camp job in fortmac as an option. Union meeting tomorrow about severance pay. If we do get anything it will be going to the second biggest debt my credit card.
I actually had a small credit card years ago I think I was 18. It got me into all sorts of trouble but I manged to get it all turned around and I swore I wpuld never get another. Then when I started at the mine I kept running into problems. Everywhere I went they said I have no credit record. So I went to the bank and was told my only option was to get a credit card. Thats how that started. Now from what it looks like I will be able to pull together enough to cover my bills and loan payments with just a little left over each month to live on. Thats really all I need to make it. Its true this area is a small consumer base for my business but its setup in such a way my customers can be just about anywhere including international. Overhead is low, I have the skills and the equipment. Its must a matter of getting it done. Downside is im not really very sociable and an awful at sales. My girlfriend is kind of taking care of that aspect lol
On a side note. This place where im at now is a several hundred acre property. It was a working ranch before we took over and it has farm status. I did check to be sure and my name is on the title as a partner. We let our neighbours work the land for the most part and pull crops off it. Ive been saying for years we should make this place work for us financially. Im usually told "were not farmers". Since the layoff he neighbours have been telling us to go to the auction and get a few head of cattle. Low initial investment and a decent return. Now the rest of the family is all excited about trying this. Im just saying I told you so. I think there are other ways to make a place like this return a profit. Im just not quite sure how lol
Its too nad this thread is my first post here. I actually signed up here a long time ago my plan was to learn all I could about managing my finances. Setting up an investment portfolio, getting into the property market and managing my owm finances. Something distracted me. I guess all thats left now in my current situation is to set up a game plan and make it work. Thanks again for all the help!


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## Just a Guy (Mar 27, 2012)

Farming/ranching ain't cheap nor easy...there are a lot of startup and ongoing costs, not to mention all the skills you need to have...

Trust me, stick with a job until you've fixed your financial situation.


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## ashin1 (Mar 22, 2014)

Well OP, it good that you want to pay off your debt, but dont forget one day you will want to retire yourself, don't forget to pay yourself first. try to put some money you make away in a retirement piggy bank and the rest towards your debt. good luck.


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## sags (May 15, 2010)

I assume you mean you are going to raise a couple of calves to sell later.

The Combine Forum is a good place to learn and ask questions.

www.thecombineforum.com

At the website...........click Forums and there will be several areas for livestock, forage etc..........


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## Arshes76 (Jul 5, 2013)

If you are going to be getting g a severance you may not want to use it to clear of your debts right away. Better to hold the cash till your income/cash flow settles in. I personally would not recommend any major debt ckearing until you get a job or your business takes off.


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## Blackcat (Jan 3, 2011)

sags said:


> I assume you mean you are going to raise a couple of calves to sell later.
> 
> The Combine Forum is a good place to learn and ask questions.
> 
> ...



Thats exactly what I need thanks ! Yes a few calves to sell next year. We have everything we need except the claves and experience but theres quite a few ppl we know that have offered to help tech us. Its also no cost to me. Not really my project im just labour lol. I do have to start paying myself thats true. Its funny ive come up with all sorts of plans over the years. The old 10% off the top into savings, that sort of thing. It never worked out well. Doesnt mean I will quit though. Its not my style. It doesnt look like there will be severance from work. We had a meeting with the union today. Our contract says the company can hold us on long term layoff for 24 months so they dont have to pay severance. By that time a lot of the town will have moved away and found other employment. Legally it seems legit... It is what it is. Imo its pretty slimey. I doubt any of us will ever see severance. A lot of folks were pretty choked about that. The union told me that my welding school in september is cancelled. I enrolled myself and I paued for it out of my own pocket. So now im trying to find out how they think they can keep me from going to school. So far nobody has answers they just keep telling me to ask the next person up the ladder lol


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## Janus (Oct 23, 2013)

Blackcat said:


> Thats exactly what I need thanks ! Yes a few calves to sell next year. We have everything we need except the claves and experience but theres quite a few ppl we know that have offered to help tech us. Its also no cost to me. Not really my project im just labour lol. I do have to start paying myself thats true. Its funny ive come up with all sorts of plans over the years. The old 10% off the top into savings, that sort of thing. It never worked out well. Doesnt mean I will quit though. Its not my style. It doesnt look like there will be severance from work. We had a meeting with the union today. Our contract says the company can hold us on long term layoff for 24 months so they dont have to pay severance. By that time a lot of the town will have moved away and found other employment. Legally it seems legit... It is what it is. Imo its pretty slimey. I doubt any of us will ever see severance. A lot of folks were pretty choked about that. The union told me that my welding school in september is cancelled. I enrolled myself and I paued for it out of my own pocket. So now im trying to find out how they think they can keep me from going to school. So far nobody has answers they just keep telling me to ask the next person up the ladder lol


If it's never worked out well, what do you intend to do differently this time? You need to have a plan.


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## crabstampede (Feb 28, 2014)

Mean a**hole response incoming:

I'm not trying to crush your hopes and dreams but if you're not *amazing* with money management and negotiation, farming/ranching will be like swimming with sharks. I'll also point out that because you have no current income and maxed out credit, procuring a herd, feed and equipment, let alone medicine, transportation, and an entire host of other costs not only make this a horrible investment, but further entrenches you into the same position you're in now.

I read the entire thread... probably the best advice was to get yourself another job ASAP, and find ways to spend the least amount of money possible. You can eat like a king for ten bucks a day if you take the time to make your own meals. If you drink, limit alcohol as much as possible and if you smoke (anything), QUIT. Only once you're able to hold onto at least a little bit of money from a paycheque should you think about acquiring some equipment or some livestock and make a transition into self-employment.

I know that sounded like scolding but your ideas didn't really seem that well thought out, just very hopeful.


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## Oldroe (Sep 18, 2009)

I've seen this a dozen times. It's easy we get 4 calves raise them up and have them slaughter for meat.

Some were along the line they become Joe,Burt, Felix and Sissy. Yes you make friends with them and that ends eating them.


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## Just a Guy (Mar 27, 2012)

I've seen it dozens of times...people don't know how to handle money, get into financial trouble...talk to some friends, find and "easy" way to make money that they have no experience in...find out whatever project it is is a hell of a lot harder and more expensive than they thought, and get in deeper...

All while ignoring people with experience telling them to avoid making the mistake...

Good luck Blackcat, you seem determined to dig your own grave.


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## Nemo2 (Mar 1, 2012)

About 15 years ago, a couple I knew in Alberta, (her family had been ranching for eons), sold their cattle and packed it in because they couldn't make a living; likewise, my late wife's brother, who had a small farm in Ontario, got rid of his cattle...same reason.


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## Janus (Oct 23, 2013)

Just a Guy said:


> I've seen it dozens of times...people don't know how to handle money, get into financial trouble...talk to some friends, find and "easy" way to make money that they have no experience in...find out whatever project it is is a hell of a lot harder and more expensive than they thought, and get in deeper...
> 
> All while ignoring people with experience telling them to avoid making the mistake...
> 
> Good luck Blackcat, you seem determined to dig your own grave.


I couldn't agree more. 

When you're on the brink of bankruptcy, making an investment in an area you know nothing about is a terrible idea. Forget investing - get a job, sell all your useless toys, and pay down that debt.

If you think you can consistently earn a better return on a farm than you can on your consumer debt, I think you're kidding yourself.


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## Fraser19 (Aug 23, 2013)

Sorry to hear about your troubles.

I was recently in your position I had $36,000.00 of debt and a net monthly take home of $2300.00. I know that might not sound like a lot but I had a car, truck and a motorcycle so I had insurance payments galore and several other expenses. I was living pay cheque to pay cheque and felt like I was stuck underwater. Now I recognise there are some differences but there are also many similarities.

My first thing was to find out exactly how much I spend. I was pretty shocked to find out when I spent on just going out. It didn't feel like I went out a lot but when looking at my credit card statements I spent over 200.00 a month at fast food restaurants. So I used an excel based program to set up budgets and all of that. I cut out my food fast food spending. I also got a no fee bank account with PC financial, I also kept my CIBC one but I came up with a budget I put all my money left over after my bills into the PC account and then transfers 25% of what was left over from savings to chequeing and that was all I got to reward myself. Now I have my BMW up for sale, I expect it to sell pretty quick and then I will be at 12,000.00 dollars of debt.

It sucks but I have to let go of things. I now drive a 1999 Honda civic that cost 50 dollars to fill up, lasts for two weeks and has cheap insurance, like you I will not give up my bike. I also combined my bike and car insurance to save money. Put any payments you can all with the same company and hope the have a multi policy deal. 

I have lived cheap this year, the things I want well I just do not buy them because I cant stand the feeling I get when I have debt. Its like swimming to the bottom of a pool and you feel like you cant get back to the surface soon enough.

In the last 14 months I have paid off $9000.00 of debt. Once the car is sold I will refinance my loan and then set up automatic payment so that it still makes to original payment and then also include the old cost of insurance for the car into the new payment. With all of this done I hope I can be %100 debt free.

The trick is to just not ever increase spending. Once one thing is paid off, the additional money that I now have goes straight into the next payments. 

I have managed to do all of this with a 791 credit rating and over 60,000.00 in RRSP's. I believe that you can do this without declaring bankruptcy. But you need to identify real quick what you can let go of.

You can do it man, just get to work. Also this is not the time to take risks like with the ranching idea. Do what you know will work, once you are more secure then try ranching as a means of supplementary income.

Now I never lost my job but, you can get one and then keep figuring things out from there. 
Work hard and make sacrifices, it will eventually pay off.


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