In a scary amount of dept

[DaniDeals]

To begin you should always pay the debt that has the highest rate of interest first. Make a list of all your debts in order of highest to lower interest rate. Be sure that you are making at least your minimum payments on all debts you owe but focus on paying down the debt with the highest interest rate first.

I don't think Bankruptcy is the way to go in this situation. Filing now will make it very difficult for you to obtain any credit or to improve your credit for at least 7 years. When banks see that you have had a previous bankruptcy they put you in a higher risk category and it is more difficult to obtain financing from them without collateral or co-signers (ie if you apply for a visa with a $500 limit they may ask for you to put $500 cash held in a GIC until you can prove your credit worthyness, in case your credit becomes delinquent the banks risk has been covered by the $500 GIC that they would then cash in the pay your visa then close the visa). Something to think about for when you are finished school and wanting to begin your life and career.

If you can go the consolidation loan route you can usually reduce your payments and your interest rate by combining all you debts into one.

If you don't qualify for a consolidation loan. Then you should try to contact a Credit counselling service they can advise you what the best action would be in your situation. If you go on the website that calgarymama provided you can locate a counsellor near you. They might suggest a consumer proposal where they will contact your creditors and come to re-payment agreement that allows you to payoff your debt within your budget without having the consequences of bankrupty. (consumer proposal is basically the step b4 bankruptcy)

Sometimes you can contact each creditor to try to make arrangements. I know with most credit cards they will not make payment arrangements with you until your account has gone to collections...but one thing you can do with credit cards to help save on interest is to call them and transfer your card to a card with a lower interest rate. Most banks have them and if you are not paying your bill off monthly you would benefit from switching to a card with a lower rate. You can also save $ by transferring balances from one credit card to another as a "balance transfer" most credit card companies offer reduced interest rates on balance transfers for a certain time period (usually 4-6 months). A lot of people think you can negotiate a rate on your credit cards but in Canada that isn't an option.

Another way to cut costs is to sign up for a banking service plan so that you won't be charged crazy bank fees for using interac and making withdrawals

The sooner you deal with your situation the better the outcome will be for you. Good luck to you.

[mulock]

After I graduated from university, I owed $24k. Instead of sitting on my ass waiting for a job, I applied for jobs overseas. I found a great paying job, paid off all my student loans in 26 months, built up a nice nest egg, got non-resident status from Revenue Canada for taxation purposes (means I was no longer obligated to pay income tax to Canada while living overseas) and built up a nice credit rating. Now that I have moved back to Canada, the banks love me.

[Alee142010]

Hi, just so everyone knows... I'm not planning on going bankrupt, I just don't think it makes sense when its a smaller amount of money... I probably would if it was like 300.000 or something but I really don't want the stress that would happen if I went bankrupt....

[mnyyoungs]

Great post folks! Way to go...lots and lots of really great information! Bravo!