Hi everyone, I live in Ottawa, Canada. My wife and I are about 20K in debt. From some bad business decisions we are in debt to Revenue Canada, credit cards and a line of credit from the bank that has now gone to collections. The collector is not willing to negotiate monthly payments. We are home owners with two children and have been refused for debt consolidation loans at two banks. Could it be any worse? Anyway, ready to smarten up, and trying to dig my way out of this hole. Does anyone know of a place that would accept debt consolidation loans where other wouldn't? Alternatively, what would any of you do in my position (not that you would ever be dumb enough to do so) LOL

I appreciate any constructive advice or thoughts.

Don't tknow if this makes a difference but we make approx. 50K per year each.

I would continue to call said creditor. try and get a hold of someone that is able to make descisions. Write to the President of the institution. Explain that you are trying to pay them back. Dont get discouraged. It may take a couple of letters. Tell them you want a payment plan and get all of this in writting. then ask for a PFD (Pay for Delete).

PFD basically says once your negociated obligations are fulfilled, they will delete these accounts from your credit history, basically like you never had the loans/credit. this will help your credit by getting rid on any negitive comments/late payments they have reported on you. You will loose the history of the account, but the baddies are worse than the history. Good luck.

In my opinion a Debt Roll Down program may be best for you. With Debt Roll Down you will pay off all of your debts without affecting your credit and can incorporate secured debts as well. You would not need to take out a loan to do this and if you are strict with the plan you can get out of debt in a smaller time frame.

My first thought is that this time in your life must be very stressful for you and your family. Every day is a big challenge, I'll wager.

On a more positive note, with an income of $100k, you should be able to pay off $20k within a year to 18 months, not knowing whether you have other obligations not mentioned.

First, make a budget. Spend nothing more than what you have on your budget.

Second, charge nothing.

Third, reduce, cut off, sell, stop using whatever you do not absolutely have to have. Is cable tv a need or a want? Call waiting and caller id on the phone? (That's about $8 a month or $100 per year. Do you like finding $100 in the street sometimes? Well, you just did the equivalent.)
Rent movies? Not for a while. Expensive haircuts? Uh, no to that too. It's getting warmer so maybe your heating bills won't be through the roof for a while.

Four, take your lunch to work everyday. No more eating out.

Now the plan, list your debts from largest to smallest. Make minimum payments on all balances except the one on the bottom of the list. Pay as much as you can to the amount on the bottom of your list. Then, once the last listed debt is paid, take that money and apply it to the next debt up the totem pole. Continue the process until you have all of your bills paid.

If your bank is unwilling to take payments on your line of credit, go into the bank with all of your debts listed on a piece of paper and show your contact there, who hopefully can make bigger decisons, that you have a plan and that you are committed to working it.

Figure out about how long it will take to get everything paid. Your attention to detail and dedication that you show to getting this all under control might be enough to get your banker to give you a chance to give you a break.

In the meantime, sell what you can, see about a part-time job to bring in some extra cash and put all that you earn toward your bills.

It sounds like you have lost a bit of hope of turning this around anytime soon. You can. Eighteen months is still soon.

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I think anyone would agree that Revenue Canada is your biggest problem and they will charge you incredible interest that will probably double the amount you owe. You need to focus on a plan to get that paid somehow, some way. Any relatives you can borrow from? This is the time for desperate measures. If your line of credit has already gone to collections you have waited too long to make a move and you will absolutely meet resistance. Keep at the bank - go in person, as another reply stated. They have to believe you are committed and serious. Don't give up!!!
In the meantime, cut to the bone as far as household expenses. The whole family needs to be in on it. If your kids are old enough to talk, you can explain it to them and have them help by turning off lights, only watching TV on certain days etc. I would eliminate internet, cable TV, eating out, shopping etc. With kids, that is sometimes the hardest thing to do!
I would not advise consolidation as it negatively impacts your credit score which would just compound where you already are.

In my opinion your best option is to formulate a debt management plan. Try looking at your expenditure versus your income, and see where you can channel surplus cash. If you can't get a secured loan from financial institutions, try asking friends or family, the benefit there is that these people will understand your current situation and there'll be no interest.

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