What to do if you Have too Much Debt

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What to do if you have too much debt? It’s a question I hope you never have to ask. But with Canadians having record debt levels, some of us need to start taking our finances a bit more seriously.

If you’re starting to worry about your debt, try to think about the positives. You know that you may be running into a problem, and now you’re taking the steps to get back on track. Depending on how much debt you have, it may take some time to clear your debt, but these tips will help you if you’re wondering what to do if you have too much debt.

what to do if you have too much debt

Stop spending

I’m not suggesting that you stop spending all your money, but if debt is a concern, you need to start thinking about what you spend your money. First off, stop using your credit cards! Take them out of your wallet, cut them up, or freeze them. I don’t care, just stop using them. The last thing you want to do is to add on any additional debt while you’re trying to get out of debt.

You’ll then need to prioritize your spending. Buying things and eating out is fun, but your debt should always be your number one priority. Seriously, think about your spending habits because any money you save can be redirected towards debt repayment.

Balance transfer your credit cards

I wrote about balance transfers in a previous post which will give you more details, but the idea is to transfer your current credit card debt to a different credit card with a lower interest rate. Many cards offer a 0% balance transfer for a set period of time before defaulting back to the normal rate. This may seem like a trivial amount, but if done effectively, you can save a fair amount on interest charges.

Get some help!

What many people don’t realize is that there are great people out there who want to help you. Bankruptcy trustees and credit counsellors specialize in debt management and will be able to go over your complete financial situation. They’ll discuss options with you and come up with a debt solution that will get you back on track – they can even negotiate a lower interest rate for you. Some people assume that working with a bankruptcy trustee or credit counsellor means you have to declare bankruptcy, but that’s not true. There are many solutions that they can discuss with you, but in some cases, bankruptcy might be the right choice.

One thing to note, you should only work with a licensed trustee or counsellor. If you come across an ad with someone offering to fix your credit score or clear your debt for a fixed price, it’s probably a scam.

Negotiate a better rate

In some cases, it’s possible to negotiate a lower interest rate from your credit card provider, but this usually only applies to people who have a history of making their payments on time. That being said it’s up to the credit card provider to offer a lower rate, so it never hurts to make a quick phone call to ask. Not all providers are open to lowering rates which is why I think balance transfers or working with a bankruptcy trustee is a better idea.

Make more money

This is a controversial tip since not everyone will agree, but making more money is an obvious way to reduce your debt. I understand that it’s not easy to just “make more money” but have you really thought about ways to bring in additional income? Maybe you can pick up more hours at work or pick up a side income. These opportunities won’t come knocking on your door. You need to hustle if you want to make more money. If you want to do something about your debt, then finding ways to make more money needs to be considered. Of course, the alternative is to cut your expenses which is a lot easier than making more money.

About Barry Choi

Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances. His blog Money We Have is one of Canada’s most trusted sources when it comes to money and travel. You can find him on Twitter:@barrychoi


  1. Althea on April 10, 2018 at 1:22 AM

    My boyfriend has six figures of student loan debt. The worse news? He’s 49. He will defend his PhD later this year and hopes to become a professor. If so, he’ll made a handsome salary but with that much debt at his age, if will take forever to pay that off. He also has a son so has a child-support payment each month. Thankfully, for now it’s fairly modest (under $300) as it’s based on his current student income.

    We want to build a life together but as someone who has zero debt, I’m concerned about our quality of life and having to spend literally years paying this off. Anything I’ve read about people with huge student loan debt references people who are in their 20s or 30s and have far more years to work with.

    This is my boyfriend’s only debt. Any advice?

    • Barry Choi on April 10, 2018 at 10:38 AM

      Hi Althea,

      To be honest, you’re in a tough situation. Paying off 6 figures of debt at the age of 49 doesn’t exactly leave you with much time to save for retirement.

      If you’re all-in with him, both of you need to come up with a plan to pay for that debt. There’s no guarantee that he’ll become a professor which in turn means no guarantee of a higher salary.

      I would advise looking at your budget and putting as much money as possible towards the debt. You’ll likely have to make huge sacrifices, but one way or another, that debt needs to be paid.

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