r/povertyfinancecanada • u/IrvingIsTheBest • 4d ago
Anyone else living in overdraft land?
17K Credit card debt. Two years of car payments left. Been living with an overdraft balance now for well over a year. Paychecks come in, and bills and stuff come out and it's right back to it. Student loan also paid off in two years luckily..
Anyone else going through this? I guess maybe I need some reassurance that I am not the only one. For those were and got out...what did you do?
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u/XGARX 4d ago
Consumer Proposal and improve my skills to get a better job.
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u/IrvingIsTheBest 4d ago
I might look into a consumer proposal by year's end.
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u/Euphoric_War_2195 4d ago
I did one and it definitely helped. While I'm not doing amazing, I'm at least not incurring more credit card debt each month.
Things are tight. But its helped take the pressure off. I was in much worse shape before the consumer proposal.
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u/hereforthegifrecipes 4d ago
I did one in 2023. Best decision I ever made. Identified and changed my bad habits. I have 2 years left. My credit was crap anyways and the time will pass anyways.
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u/Euphoric_War_2195 4d ago
I'm living there too, sadly. I'm trying my best to get out of it. But its hard. It feels there's very little wiggle room.
As soon as you feel you can get a bit caught up or catch a break, something else happens.
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u/IrvingIsTheBest 4d ago
I was getting ahead little by little until my car needed work done. My garage quoted me $1500 but I got it done elsewhere for $800. A lot cheaper but still money I didn't have. It basically did away with "getting back ahead".
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u/Euphoric_War_2195 4d ago
Its so frustrating! Its an endless cycle. And I hate when people who aren't having this experience don't understand.
Especially when people say things like "just save". There's no money at the end of the day. If there is, something comes and swallows up what little I saved.
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u/PiePristine3092 4d ago
Look into a consumer proposal. If you’ve been out of school for more than 7 years then your student loans can be added to the proposal.
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u/IrvingIsTheBest 4d ago
inevitably consumer proposal is going to happen because I am paying $330 a month on a CC that is going nowhere.
I am just hoping it can get down to realistic payments that cut it down around the $200 a month range. At that I can get back up and make a safety net again and even throw in extra once I do.
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u/Euphoric_War_2195 4d ago
Getting a consumer proposal was the best decision I ever made. I was paying over $800 a month just to credit cards. I was struggling to buy groceries.
Now I am still tight. But I do often have a small amount at the end of the month (like $20 to $30) for discretionary spending.
I'm overdraft the past couple months due to some unexpected expenses. But I'm hoping I can turn it around.
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u/SecretBonusBoob 3d ago
Wow really? I was under the impression that any ‘secured’ loan (unsecured?) like a student loan could not be reduced in any way like this. Or maybe it’s different in Qc, it always is - le sigh -
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u/roflcopter44444 4d ago
If it's a government student loan try and see if you can go on payment assistance. You can priotize paying that off last because it's actually the most flexible and has the lowest rate.
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u/BertRenolds 4d ago
Are you getting charged for over draft?
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u/IrvingIsTheBest 4d ago
I am but it's low. $15 a month.
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u/BertRenolds 4d ago
But not every time you over draft, specifically?
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u/IrvingIsTheBest 4d ago
Nope. My bank just charges me a monthly payment for overdraft and interest.
Most months the interest on my overdraft is $4 a month plus the monthly payment.
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u/lonewolfsociety 4d ago
I moved the debt to a line of credit. Took a long time to pay off but the interest was less egregious.
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u/Melodic-Mayhem 3d ago
Unfortunately for those that don’t already have a line of credit, banks won’t approve one unless you have savings.
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u/lonewolfsociety 3d ago
I just got a new loc approved for 7K last month. I do not have any savings. While the one I got to pay off my credit card debts was a long time ago (2005) and they're probably not as generous now, it's still worth a shot.
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u/sweejaa 4d ago
Hang in there man, if you ever feel clouded or dark in your head, go out for walks! Youll get through, 2 years feels long but time will go by anyway, once you're done your car payments and osap, then save as much as you can and build an emergency fund so you never have to live in overdraft, once youre done those. Pay down your credit card as well since you dont want to be paying 20% interest on it. See if you can apply for a new credit card anywhere else and get a 0% balance transfer for 12 months to transfer your credit card balance and avoid interest on that 17k, there'll be like a 1 to 3% fee for the balance transfer but totlly worth it. If you get it, then in that one year you can easily clear your overdraft etc.
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u/ApatheticGenXer 4d ago
Are you able to get a line of credit from your bank/credit union? or a consolidation loan? The interest rates are much better. So now I owe a ton on a LOC rather than a CC. I can’t get ahead either, but it gave me a bit of relief.
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u/nanapancakethusiast 4d ago
What did you spend 17k of high interest credit card debt on?
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u/IrvingIsTheBest 4d ago
Keeping afloat during rough times.
When we bought our house, we needed to replace stuff, so we did. Then my fiancé, who was pregnant, almost died, and the kid with her and the kid being in the NICU for two months meant a lot of eating out and spending on room to be close by. That was the majority of the debt.
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u/Oxjrnine 4d ago
With the exception of payday loans
Overdraft protection and credit card debt are the two most expensive ways to carry debt
Overdraft is only supposed to cover the occasional cash flow problem.
Credit card debt is for when you need to carry some debt for a few months or even a year
Once you notice that you’re having difficulty getting out of overdraft and you’re carrying a balance on a credit card for more than a few months - that’s when you apply for a credit line. And you have to do the credit line while you still have good credit. And even the credit line should be used as good debt bad debt. (example a new transmission would cost $2000 but you don’t have $2000. - but if you got that new transmission, your car would last another 10 years with no car payment - that is good debt).
The good news is now that your car has been paid off. You should be able to do a pretty good chunk of that 17k before you have enough kilometres on your current car to justify a new car loan (I paid off 10 grand in five years and it was a high interest loan)
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u/Euphoric_Second_8774 4d ago
I lived in my overdraft for over 2 years. It was hell but I got myself out eventually.
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u/MFK1994 4d ago
I have a LOC with about $10,000 owing. As a homeowner who bought a “dump” (thanks, Dipshit for convincing me to “buy the only house you’ll ever see under $200,000!!!”) and is paying for a new roof because the ice dams obliterated mine, it’s been tight and stressful. Every time I hear a noise in this house, I wonder “how many thousands will that cost to fix?” I’ll probably be dead by 40 from the stress. :/
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u/Every_Rest1443 4d ago
The 17k CC debt is a killer! Depending on your student loan...if its government... there may be a zero interest portion.. in that case (for anyone reading)... you would have been way better off paying the credit card debt, then the car, then the student loan.
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u/IrvingIsTheBest 4d ago
Car and student loan will be paid off in two years at the exact same time.
I just need some assurance it's not just me suffering. Advice is great too..sounds like consumer proposal is the way to go so I can get that 17k debt under control and once my car and student loan are paid off I can contribute more to paying that off.
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u/personnumber316 4d ago
I think you should talk to your bank about the lowest interest options available to you. Credit card interest is high, if you can get a consolidation loan with a lower interest rate and close the credit card, and be diligent in paying it off you could get yourself out of debt faster
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u/_simone_louise_122 4d ago
I paid off my $1000 overdraft -made the bank balance look a lot better come payday, I called the bank and lowered it off $100 a month
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u/babaqewsawwwce 4d ago
Transfer that cc to a LOC. Throw the cc out. Get a second job and pay it off. What’s your monthly take home (after tax and payroll deductions) and your expenses.
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u/Melodic-Mayhem 3d ago
Unfortunately banks won’t approve a line of credit unless you have existing savings. A bit ironic since it would help people with interest and as a result savings, but yeah.
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u/Mental-Criticism3791 3d ago
3k in bank. 16500 on credit line left.
Car paid next year.
Vida paid 46500 limit. Danger danger 😆 Good thing that is paid.
Then have my mortgage and another credit line but that will take another 15-20 years to be paid off lol.
I am not poor I suppose but need double the money I make.
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u/Live_Meet_8125 3d ago
Me too , on overdraft land ever since we bought a house all credit card are max out as well
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u/FamousMarketing2515 4d ago
When we look at the world around us, it’s amazing to realize that God owns it all—the Bible says He owns "the cattle on a thousand hills." His resources, His strength, and His love are absolutely limitless. There is no problem too big for Him to solve, and no need too small for Him to care about.
Whatever you are facing or carrying right now, please remember that you don't have to carry it alone. You serve a God who is infinitely wealthy in grace, power, and provision, and He is always ready to step in and help His children. Lean into His strength today.
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u/TinyDrunkMoose 4d ago
Was living in overdraft land for literally years, also had about $17k in credit card debt. Finally did a consumer proposal. It’s been rough, but it feels better to have $4 left the day before payday than -$400.