My bank offered me a line of credit with a 10 000 dollar limit in 2013, which I took but didn't touch, as I've always been relatively self sufficient. In 2014, my father got sick and I had to leave my job and go out of province to stay with him. During that time, I used 8000 of it. When he passed away in spring of 2015 I came back to my home province and started working full time, but the wage was low and I lived paycheque to paycheque. At the end of 2015, I got an inheritance cheque for 10 000 dollars and used it to pay off the line of credit, and put 1100 into a tax free savings account. I also lost my job around that time, fell into a depression and didn't work all year until October 2016, where I got a job that is only 2 days per week and is currently still my only one.
In the beginning of 2016, I started to use the line of credit again for personal expenses. Over the course of the year I kept dipping into it without making any payments at all. By December I had used 9200 of it and have refused to touch it since. I still haven't made a payment and my bank has been calling me. Since I am so scared of my debt and still have the depression, I have been ignoring them.
The original interest rate on the line of credit was prime+3%, but in the summer of 2016 I got a letter from the bank telling me they had raised the interest to prime+7%. I am about to start working again full time, and I would like to pay off the line of credit, but I don't understand how interest is calculated and I am worried that I am in way over my head. 9200 is a lot of money to me and I have been considering filing for bankruptcy, since the only money I have currently is about 500 dollars in my bank account and the 1100 in the tax free savings account.
I am largely financially dependent on my boyfriend right now, however I pay for some of my own expenses, which work out to around 2-300 dollars per month. Is it feasible for me to pay this line of credit off once I start working full time (my monthly income will likely be less than 1500 dollars), or is declaring bankruptcy the better option?
Submitted March 18, 2017 at 10:58AM by mrar99 http://ift.tt/2nkX2Kg
