Student debt is probably the worst type of debt there is. It's rare for new grads to get high paying jobs right out of school. They are basically forced to put their lives on hold for a while and pay off a big chunk of debt before they can even think about getting a mortgage or car or anything else. Seems pretty unfair that by trying to get ahead and getting an education, they really are setting themselves back financially for a very long time.

I suggest students (or anyone struggling with debt) investigate potential savings on insurance costs. Not a lot of people know that insurance rates can vary greatly from company to company. Don't assume that the insurance rate you have right now is the lowest it could be and the only way you'll know if you can get a lower rate somewhere else, is by comparing companies.

Take a look at www.Kanetix.ca if you would like to compare insurance quotes and possibly trim down on your insurance costs and free up some extra funds. You can also join the discussion on www.KanetixForum.ca if you have a question and would like to learn more about insurance; we're here to help you understand Canadian insurance.

Let's hope that by the time our kids go to school, tuition is lower across Canada, but in the meantime, I hope these links help someone save and put money towards their own school debt.

That's not the way it works in Ontario or any other province.

First, they would have to take you to court which would take several months. And there would have to be a pretrial settlement conference first. Only after they went to court would they be able to obtain a garnishee on your wages if they were successful in getting a judgement. This is obtained through a writ [or enforcement document] filed with the local sheriff's office (max. usually 15 to 20 percent of wages) and that also would take some time, even more if you appealed the judgement.

Small Claims Courts in Ontario handle prejudgement amounts up to $10,000, although after post judgement interest is added on, it could add up to somewhat more.

Divisional Court handles amounts above $10,000 but the process is especially expensive and onerous for amounts over 50K. For amounts between $10K and $50K, the process is a more streamlined. I mention this because you didn't say how much you owe. Good heavens, $500 interest per month is $6000 per year!

As far as your credit report goes (and I wonder if they even report to the credit bureaus at all), it doesn't go bad overnight. R1 is a rating that refers to an account in good standing that's paid up within 30 days of the due date. R2 means you're 1 payment or at least 30 days behind; R3 means you're 2 payments or at least 60 days behind; R4, 3 payments behind or at least 90 days; R5, 120 days etc. It's not until a debt is R9 or at least 180 days behind that it's reported as a bad debt writeoff. Note, that doesn't mean that you no longer owe the debt, as some think.

So in your case, even if it went to an R2 or R3, that still wouldn't be too bad. Of more concern to your credit file is the fact that it might show to other future creditors that you were dealing with a "lender of last resort." [assuming they even report to the credit bureaus].

The threats you are getting are the standard boilerplate that every high pressure and unconscionable lender will give you out of fear that you will default. But they have to follow the same rules as everyone else when it comes to collection remedies.

Payday lenders are under a lot of heat from the media; obviously, they don't want make any more waves than necessary.

Ray

I have two payroll loans and the interest per month is $500.00. I will not be able to pay the interest this pay(I have been on leave from work due to illness). One company told me that is I do not pay right away my wages would be garnished and they would be reporting me to the credit bureau. I thought that an account had to be several months late before the credit bureau could be notified. I also thought in Ontario, they would have to take me to court to garnish my wages. I could pay their bill in full within 2 more pays but I'm drowning in the interest. After I pay these loans in full, I will NEVER borrow from a payday lender again. Any advice would be greatly appreciated. Thank you

This is a new discussion area to talk about how to Eliminate Your High Interest Debt.

Debt consolidation, Credit repair, payday loans, mortgage loans?

What is the best way to eliminate high interest debt?