Hello!
To start I’m not a very financial person, never went to the bank to set up investments or RRSPs or anything like that which now that I’m older I do regret. I was wondering about unpaid loans and personal budgeting advice.
I currently have 2 unpaid loans according to Equifax, 1 for $36k with a collections agency, and 1 for $16k with my bank. Both loans (as far as I know) come from a Mastercard debt from years ago. My identity credit card info was stolen and I didn’t notice until my bank sent me a letter saying I was over my limit. At the time I was trying to pay it back in monthly installments but it went to collections and was transferred to a collections agency. I had a difficult time trying to get in touch with them and organize a payment schedule and when I finally did it got transferred to a different agency with added charges. This went on for a while with me trying to pay but the agency not accepting my payments resulting in several returned payments which I got charged for.
According to what I’ve read online, after 2 years (in the province I live in Canada) of non-payment they are lo longer able to make a legal action against me. They can call and write letters but if I don’t pay they have no legal grounds. Also after 6 years (I think) the debt becomes unclaimable.
My current credit score is average, around 600 of a max of 900. My 2 loans have a last payment of July 2020 and March 2021 so one would be up this year and the other the next.
I want to start budgeting better this year to try to make a future for me and my fiance. She has a great credit score but I want to be able to help us find a place of our own. I’ve been working towards getting my license (passed the learners test, also had one 20+ years ago and drove for over a year) and I am wondering how these loans will affect me in the future. I clearly don’t have $50k to pay off the loans but when they become unclaimable is there a way to remove them from my record or will they always be there? How will it affect me in the future if I went to get a loan for a car, or try to co-sign for a mortgage? I only use 1 bank for all my needs but if they need me to repay $16 -$50k before I qualify there is no way I can do it and I don’t want the debt balance to fall on her and affect her score eitther.
I’m not really sure what to do at this point. Do I open a new account with a different bank? Does the debt carry over? If I try to get a loan from my current bank will they add on the debt before it is approved?
Any advice or answers would be very appreciated!
Thank You!