Refinance mortgage pros and cons

[rokman]

Hi all,

Lurking around and searching the database for info but the last time anyone talked about refinancing their mortgage was in 2013 it seems. I thought it would be worth starting a new thread.

My case (looking for tips so thank you in advance if you have some!)

Bought our home in 2017 in SW Calgary for $477k. On accelerated bi-weekly payments. Currently owe $350k.

Earning good money as a sole proprietor; subcontracted through a geology outfit. Doesn't mean I'm good with my money; I am not. Terrible actually. Assets include:
- a rust-bucket truck with 440,000 kms.
- RRSP valued at $60k
- TFSA valued at $10k

Debts include:
Income tax: $50k (currently repaying it to the tune of $6150/month; ouch... but hey... terrible with money. Did well in the stock market in 2021 like many others did and tried to repeat it in 2022... now paying the price.)
Credit Cards: $12K
Lines of credit: $60k

And once 2023 taxes are filed, I'll owe $75k for sure. (I can hear some of you screaming "WTF MAN!" and asking yourselves tons of obvious questions for me.)

Anyways: here for advice. I had a meeting with a BDO member last week about this and her advice, starting from the best idea to the worst idea was:

1) ask your mortgage people if they'll refinance your mortgage... let me know their answer and what their rate is.

The mortgage folks said "YES" they will refinance our mortgage so we can use the equity we've built up to pay off all these debts. They'll waive the penalties as we are only 1 yr in on our 5-year fixed term (currently at 4.6%) and they offered a refinanced rate , 5 yr fixed, at 5.8%. Our payments go from $1162/month to $1411 (18% higher)

2) Ask other lenders if they'll approve us for a second mortgage in the 5-7% range

3) Ask my bank for a consolidated loan so I can pay off all the debt and then see what their interest rate would be to pay them back

4) Have BDO do up a consumer proposal - essentially they will reach out to all my creditors with a tailored offer to pay off my debts and then BDO will come at me with something in the realm of a $2300 to $2500/month repayment plan over the next 5 years. (the pros to this are: lowers my current obligations of $6150 / month so I don't feel so suffocated... The $6150 payments stop in November but then again, I'll be slapped with for sure another huge income tax and GST tab for 2023, of which I have been able to save $0 for thus far thx to me being a bad boy with the stock market; paying dearly for it. I don't need the riot act read to me; I need solutions and intel based on the tips from BDO... mainly focusing on solution number 1) - refinancing. I'm concerned because I fear I don't know all the repercussions if I opt for this.

5) Bankruptcy; after she learned of all my details, she said this was absolutely not an option for me. The other options are way more favourable and she emphasized I focus on them starting with the first option first. I was not in such dire straights to be a candidate for this #5 option so she left it completely off the table.

@Dean2 is clearly a savvy fella so I hope he chimes in here but am eager to hear what others with experience have to lend.

FYI: I've stopped putting money into the stock market. Everything is now focused on getting out of this debt.
THANK YOU and for the record: I'm not ashamed; I'm hoping this helps me and I'm hoping it may be able to help others if they're also struggling like me.

I'm married with two kids; my wifes name is on the mortgage but she is not on any of my TFSA or RRSP stuff; she's not on any of my credit card stuff or lines of credit or consolidated loans. Essentially, all the debt is my own doing. I pay all the bills for the house and I pay all the mortgage so she's on board with me refinancing because I'm paying the house off anyways. I get that there's going to be big opinions with this. Let's see how we can navigate.

[fishtank]

Refinance for 2 or 3 year terms lower than the five year rate ?

[britman101]

I will have other things to add later, but I would also consult with mortgage brokers as to what they can do for you. However, one word of advice I have for you is do not entrust everything with the bank. The banker is not your friend. They are a business and their bottom line is to turn over a profit. Bad debts and bankruptcies are things they do not like to hear about from their clients.

[CanuckShooter]

A friend of mine did a consumer proposal, got him out of his fix BUT completely tanked his credit rating for years. I'd avoid that route, and be aware that in some cases if you are setting up a proposal your creditors could force you into bankruptcy.

They aren't doing you a favour, only getting the most $ out of you they can.

[Dean2]

You have provided a lot of information, more than most are comfortable sharing on open media. That said, there is still not enough detail to provide you with a quality opinion. That and I don't give detailed, personalised input on open forums. What I post is either what I do personally or general information that is useful to many and publicly available to all, if you know where to look.

If you want to discuss your personal situation, PM me your phone number and I will give you a call and see if I can be of help.

[MK2750]

If you have a $350,000.00 at $1162.00 a month it might be your math that is the problem.

You don't have any savings when the money comes from unpaid income taxes etc. You only have the illusion of savings. I would cash those out and get on top of the outstanding revenue Canada debt. You can work with other creditors, those people can be ruthless.

You should speak to a decent accountant. Being self employed with a wife and 2 kids, a rust bucket truck, a ton of debt and an enormous tax bill is almost an oxymoron. A seasoned professional is well worth the added cost and literally does pay for himself and much much more.

If your credit lines are tied to your home there doesn't look like there is enough equity there unless your home has gone up in value a great deal.

The first key to a stable financial future is understanding where the money goes. Sounds stupid but it is true. The big bills are easy to look at and blame but it is the pennies not the dollars that generally screw up finances. Start keeping every receipt and not just the tax deductible ones, absolutely every receipt. At the end of the month sit down with your wife and find what costs can be eliminated or reduced. Sit down with your accountant and see what if any of these expenditures may in fact be tax deductible. With a humble attitude and zero sense of entitlement you will find hundreds if not thousands of dollars. It seems like hind site being 20/20 but your future depends on it. The first and most important thing to do when you find yourself in the hole is to stop digging.

Please beware of the "proposals" to reduce debt through consolidation. Banks love consolidation. It is like getting your cake and eating it too. It screws up your credit rating meaning thousands of extra dollars in profits for them and does nothing but prolong your debt burden.

I once decided to pay off a credit card that was a little out of control at about $10,000 and a used car loan that was at a higher rate than my credit line for about $3000. My line was at prime plus 1/2 IIRC. Anyway, several years later I went to pick up a new truck and they said I had a consolidation loan on my credit report. I bet that bank manager's ears are still ringing. Without my knowledge they had added that tidbit to my financials. I got it straightened out immediately but make no mistake consolidation is bank bankruptcy without benefits as far as your credit rating is concerned.

[HyperMOA]

No mater what you do, and what your payments turn out to be, you need to save an additional $6150 per month to cover 2024's taxes or this cycle will never end.

You might need an automatic withdrawal/transfer set up similar to your mortgage to an account that is not easily accessible to you.

I don't even want to know what CRA charges interest on late penalties at.

[Scott h]

Your option number #1 seemed a pretty reasonable, easy choice. A remortgage at only 1% higher than you are currently paying, with payments less than $300 a month more than you have now. The money saved on wasteful interest payments HAS to be socked away for the NEW tax bill you apparently know is coming. Having your credit cards, line of credit, and tax bills paid in full would allow you to sleep at night and hopefully learn from your mistakes.

[Cement Bench]

I am going to be blunt with my comments a couple of times here

U probably won’t like it, others won’t like it

but glad you have reached out some of us know a little bit about these things

But first

how much does the realtors want to list your house for and what will you net

how long to sell it and where would you live

future job prospects in and out of the Calgary area

then some suggestions

[Dean2]

Originally Posted by Cement Bench

I am going to be blunt with my comments a couple of times here

U probably won’t like it, others won’t like it

but glad you have reached out some of us know a little bit about these things

But first

how much does the realtors want to list your house for and what will you net

how long to sell it and where would you live

future job prospects in and out of the Calgary area

then some suggestions

Given the amount of information you have, this is a completely irresponsible suggestion. If he is paying $75,000 a year in taxes he's earning north of $200 grand. You have no idea what his wife earns. Even on just his income, why would you relocate and leave that income level? Whether he needs to sell the house or not cannot be determined based on the info presently in hand, but he sure isn't going to be able to rent a house anywhere near Calgary for anywhere near as low as his mortgage payments currently are.

I have seen some good suggestions, particularly the need for a detailed monthly budget and tracking, plus cutbacks and a detailed plan, but your suggestions are a long ways out in left field until you know more.

[Cement Bench]

also the price you paid for the stock and what they are at today if you sold

it is going to be painful with my suggestions but you need a 1-2 year plan not a 10 year plan

does your wife work and could see earn a decent income

Jeff

[Big Sky]

Given what's happened in Calgary's housing market in the last 7 years, your house should be worth considerably more than what you paid. It should easily be worth enough that you could re-finance it to cover your HLOC, CRA and credit card debts.

Agree with the poster that said your mortgage payment seems a bit off. A bank mortgage calculator says your mortgage should be considerably higher.

Not to add to the misery, but you should be planning on getting a newer vehicle. A vehicle with over 400000 on the clock is probably approaching the end of its life.

Selling off the RRSP might not be wise. The tax hold back might make it not worth it. Also, if you switch banks, moving your RRSP to the new bank makes you a more attractive client.

[Scott h]

Originally Posted by Big Sky

Given what's happened in Calgary's housing market in the last 7 years, your house should be worth considerably more than what you paid. It should easily be worth enough that you could re-finance it to cover your HLOC, CRA and credit card debts.

Agree with the poster that said your mortgage payment seems a bit off. A bank mortgage calculator says your mortgage should be considerably higher.

Not to add to the misery, but you should be planning on getting a newer vehicle. A vehicle with over 400000 on the clock is probably approaching the end of its life.

Selling off the RRSP might not be wise. The tax hold back might make it not worth it. Also, if you switch banks, moving your RRSP to the new bank makes you a more attractive client.

His mortgage payments are calculated on bi weekly payments I believe, and I agree his equity should have risen quite a bit in SW Calgary in that time frame.

[Big Sky]

Originally Posted by Scott h

His mortgage payments are calculated on bi weekly payments I believe......

I did see that he said that he was on "accelerated bi-weekly payments"

But he also said ...

Our payments go from $1162/month to $1411 (18% higher)

It would make more sense if the $1162 was a bi weekly payment, but I just went with what he said.

[Cement Bench]

Originally Posted by Dean2

Given the amount of information you have, this is a completely irresponsible suggestion. If he is paying $75,000 a year in taxes he's earning north of $200 grand. You have no idea what his wife earns. Even on just his income, why would you relocate and leave that income level? Whether he needs to sell the house or not cannot be determined based on the info presently in hand, but he sure isn't going to be able to rent a house anywhere near Calgary for anywhere near as low as his mortgage payments currently are.

I have seen some good suggestions, particularly the need for a detailed monthly budget and tracking, plus cutbacks and a detailed plan, but your suggestions are a long ways out in left field until you know more.

wellllll Dean chill out buddy

I DID NOT MAKE ANY FIRM SUGGESTIONS AT ALL YET

still trying to gain information

also you are (unless you have talked to him) making ALL KINDS OF Assumptions NOT IN EVIDENCE YET

slow down we both need info, you the banker have some ideas but everybody has situational bias

my bias is to get rid of debt sooner than later

there are lots of options yet to explore

rather than say his house is now worth 750 and he can net 715 after expenses before mortgages makes a difference as opposed to his house is worth 525 to sell

and maybe he works outside of Calgary or for just 1 main employer

AND I ASKED WHAT HIS WIFE EARNS IF SHE WORKS

reading comprehension is great when it works buddy

You are not the only one who can give an opinion that might work

more details are needed, you are a financial almost genius but you don’t have a monopoly on trying to help

bankruptcy or consolidation can be detrimental
we also don’t know how much he wastes in meals rather than taking a lunch or if he can do that

many more questions need to be answered and just venting at someone who,] is CURRENTLY ONLY ASKING QUESTIONS is unnecessary at this time

when I make some suggestions perhaps I can clearly make that known in a preamble for you

Now back to regularly scheduled programming to see the introduction of BACKGROUND FACTS so we can make suggestions

sheesh, so bitter and yet the “what to do report has not been written and not even my first draft”

the op has reached out which cannot be easy, let’s explore ALL BLOODY OPTIONS before closing the door on success

again, my solutions WILL BE geared to a quick solution even if it involves some discomfort

no sense prolonging a 10 year solution that given his admitted history will likely fail

some of us less knowledgeable folks might get him out of this INTACT

jeff

[Cement Bench]

Dean says

I have seen some good suggestions, particularly the need for a detailed monthly budget and tracking, plus cutbacks and a detailed plan, but your suggestions are a long ways out in left field until you know more.


no problem BDO person, a decent banker, most financial help books make that plain,
budgeting, reduce expenditures and blah blah blah

what is needed here is an escape plan so he is not in financial prison for the next decade or 2

not being overly critical of Dean but Dean don’t be condescending to insinuate other great suggestions,
there was no sense in repeating common sense suggestions that all self help books take pages to tell you about


just to clarify what is needed is not small suggestions but a all encompassing plan to get out and on the road to success and an enjoyable retirement

not be half in the ditch for 20 years

[britman101]

Also no need to tell us your credit score, but work out what your payments are to various vendors. That would be mortgage payments, phone bills, internet charges, utility bills what have you. Once that has been laid out on paper starting this month, make every monthly bill payment on time. Do not skip or miss a bill payment. This will affect your credit rating and impact future loans you will be eligible for.

[Scott h]

"mainly focusing on solution number 1) - refinancing. I'm concerned because I fear I don't know all the repercussions if I opt for this."

I don't think there should be any repercussions for you by refinancing and using the money to clear your other debt. If you do go this route you may want to see how much extra your bank is willing to give you and use that money to get ahead of your expected 2023 tax bill, and save yourself from further interest hell.

[Dean2]

I am NOT being condescending, if I were, that would be more than abundantly clear. You said some would not like your suggestions, I am one of them. I also said, I have no where near enough information to form and pass on a cogent and reasonable opinion nor would I do so on an open forum, but that does not preclude me from forming and expressing an opinion on other recommendations.

If you are offended, that is on you; it was not my intent, but I do believe in speaking clearly.

[Cement Bench]

Dean 2

thanks for your reply

[MK2750]

Originally Posted by Dean2

Given the amount of information you have, this is a completely irresponsible suggestion. If he is paying $75,000 a year in taxes he's earning north of $200 grand. You have no idea what his wife earns. Even on just his income, why would you relocate and leave that income level? Whether he needs to sell the house or not cannot be determined based on the info presently in hand, but he sure isn't going to be able to rent a house anywhere near Calgary for anywhere near as low as his mortgage payments currently are.

I have seen some good suggestions, particularly the need for a detailed monthly budget and tracking, plus cutbacks and a detailed plan, but your suggestions are a long ways out in left field until you know more.

It was my understanding from his post that his tax debt was going to increase from $50,000 to $75,000 and included collected and not submitted GST. The government takes this very seriously and the penalties and interest would out weigh any savings trying to retain assets.

If you are correct and his income tax bill is $75,000 for this past year he is dealing with a budget that Ralph Cline could likely balance.

Impossible to tell without more information.

I do know that financial stress is horrible. I once sold an acreage we loved just to clear all debt and start with a clean slate. In hind sight we could have made it work but the juggling act and hours spent working was sucking the life out of me.

[bigbuck]

I think before considering any of the options you mentioned, is to get on a written budget. Know exactly where every dollar is going. It may take a few months to see some of your spending trends, but really start to tighten it. Maybe you have an extra $1-2k per month you can start throwing at some debt. Then you can go from there on some of the options you mentioned.

Sell the house and put the equity on your debt? If your line of credit isn’t tied to the house, then Rent for a while? Not the best starting from scratch but sounds like you earn a high income so can rebound sooner than others would.

[roper1]

I've never been that far in the hole.......but I would think with your income, there is a wee bit extra here or there to start with the CC first. Then the next thing you can beat. And then the next.

Dean knows way more about this stuff than most, but I personally don't know anyone who benefitted from a consolidation loan. Just kicked the can down the road & ended up broke later rather than earlier.

Being bad with money management is actually just an excuse, and I for one will not enable you. You are making huge bucks, bear down, get after individual payments that you can eliminate first. Best of luck Sir, you've got this!

[rokman]

I truly did not expect this excellent feedback; thought I'd be laughed out of the house, but hoped at least some useful advice would join me. You all did better than I anticipated with your feedback so thanks a bunch.

I typed my shpeel rather quickly and thank those for pointing out the things I need to edit / clear up.

1) $1162 accelerated bi-weekly is correct. I made an error later that said $1162/month. I meant $1162 per payment every 14 days. Thx for noticing that BigSky.

House has increased in value yes. We owe $350k on it now and properties in our neighborhood are selling in the $600's. Our house is valued in the $650k range. We are very happy in our neighborhood; we are staying put.

Scott recommended asking if I could squeeze out more (if I chose to refinance) to help cover the 2023 taxes, which yes, I am sure will be $75k (GST and Income tax combined.) If I could get out of this mess in a couple years, I would like to think I can avoid this mess forever and ever.

My wife works full-time earning enough to cover kids daycare, groceries and extracurricular activities. She nets $38,000, about to net $45,000 thanks to a promotion which takes effect this spring.

MK2750, you sound like you'd have some great tips. If I could pour you a scotch and hear them, that's what I'd opt for. Your acreage anecdote hit hard.

bigbuck you're spot on there. I've had excel sheets going on for over 10 years, tracking everything I spend. Some years I slacked, other years I watched like a hawk, but you're absolutely right; every dollar needs to be tracked when you're in my situation. I hope that my extra info here lends some more feedback from you as well.

I emailed my accountant a couple hours ago in regards to "sole proprietor vs corporation" as I've been a sole proprietor since 2010. I've got this burning itch inside that says "if I were incorporated long ago, I'd probably be in a better position and paying less taxes." This is what I want to understand more. I know rocks (I'm a geologist). I don't know finances as well.

My RRSP (valued at $60k) was set up in such a way that I would be able to withdraw from it a certain amount without penalty after holding it for 6 years. It's about 8 years old now. I haven't asked the manager who looks after it yet for his advice on withdrawing some of it to help with this debt. I'll ask him soon; just seeking advice here and elsewhere before asking.

Yes, my truck is on her last legs for sure, being as old as she is. I work in the field occasionally and need a truck. I've been keeping an eye on the used truck market for several years as this thing keeps aging before my eyes. Considering a truck 3-4 years old. Less than 150k kms. ~$20-$25k should be close to what I'm looking to buy.

If I sold all of my stocks, I'd free up ~ $10k.

Other assets not mentioned in the first post: I have a rock collection (fossils, meteorites etc.) worth maybe $5k. I've been selling bits and pieces of it over the last year. Vinyl record collection worth maybe $8k. Also been selling it off. Other collectibles which again, I've been selling off. So liquidation has been the name of the game for me and I'll keep selling off those possessions to help stay afloat.

I don't own a vacation property. I sold my two motorcycles in 2020. I have no other toys. I'm 40 years old and roper1, I appreciate the comments.

britman, thanks for the suggestions and overall feedback.
Cementbench: We aren't selling; just looking at refinancing it as an option to use the equity in it to pay off some debts. Your comments are welcomed.

[bigbuck]

Originally Posted by rokman

I truly did not expect this excellent feedback; thought I'd be laughed out of the house, but hoped at least some useful advice would join me. You all did better than I anticipated with your feedback so thanks a bunch.

I typed my shpeel rather quickly and thank those for pointing out the things I need to edit / clear up.

1) $1162 accelerated bi-weekly is correct. I made an error later that said $1162/month. I meant $1162 per payment every 14 days. Thx for noticing that BigSky.

House has increased in value yes. We owe $350k on it now and properties in our neighborhood are selling in the $600's. Our house is valued in the $650k range. We are very happy in our neighborhood; we are staying put.

Scott recommended asking if I could squeeze out more (if I chose to refinance) to help cover the 2023 taxes, which yes, I am sure will be $75k (GST and Income tax combined.) If I could get out of this mess in a couple years, I would like to think I can avoid this mess forever and ever.

My wife works full-time earning enough to cover kids daycare, groceries and extracurricular activities. She nets $38,000, about to net $45,000 thanks to a promotion which takes effect this spring.

MK2750, you sound like you'd have some great tips. If I could pour you a scotch and hear them, that's what I'd opt for. Your acreage anecdote hit hard.

bigbuck you're spot on there. I've had excel sheets going on for over 10 years, tracking everything I spend. Some years I slacked, other years I watched like a hawk, but you're absolutely right; every dollar needs to be tracked when you're in my situation. I hope that my extra info here lends some more feedback from you as well.

I emailed my accountant a couple hours ago in regards to "sole proprietor vs corporation" as I've been a sole proprietor since 2010. I've got this burning itch inside that says "if I were incorporated long ago, I'd probably be in a better position and paying less taxes." This is what I want to understand more. I know rocks (I'm a geologist). I don't know finances as well.

My RRSP (valued at $60k) was set up in such a way that I would be able to withdraw from it a certain amount without penalty after holding it for 6 years. It's about 8 years old now. I haven't asked the manager who looks after it yet for his advice on withdrawing some of it to help with this debt. I'll ask him soon; just seeking advice here and elsewhere before asking.

Yes, my truck is on her last legs for sure, being as old as she is. I work in the field occasionally and need a truck. I've been keeping an eye on the used truck market for several years as this thing keeps aging before my eyes. Considering a truck 3-4 years old. Less than 150k kms. ~$20-$25k should be close to what I'm looking to buy.

If I sold all of my stocks, I'd free up ~ $10k.

Other assets not mentioned in the first post: I have a rock collection (fossils, meteorites etc.) worth maybe $5k. I've been selling bits and pieces of it over the last year. Vinyl record collection worth maybe $8k. Also been selling it off. Other collectibles which again, I've been selling off. So liquidation has been the name of the game for me and I'll keep selling off those possessions to help stay afloat.

I don't own a vacation property. I sold my two motorcycles in 2020. I have no other toys. I'm 40 years old and roper1, I appreciate the comments.

britman, thanks for the suggestions and overall feedback.
Cementbench: We aren't selling; just looking at refinancing it as an option to use the equity in it to pay off some debts. Your comments are welcomed.

I use the every dollar budgeting app. It’s called a 0 dollar budget. So you allocate all your net income at the start of each month, and “give your money a place to go”. It’s worked well for my wife and I. The app is from Dave Ramsey. Not sure if you heard of him or not and he’s definitely not for everyone but his podcast can be very motivating for people trying to get out of debt. Maybe worth a listen.

[densa44]

I'm kind of with cement bench and Dean2, you have a very big and multi faceted problem and it needs more than tinkering with the mortgage terms.

You are taking a very responsible approach, ie. paying your bills, no one suggested bankcruptcy and I'm not either but if you ask in a new thread who can recommend a competent financial planner, I think that would be a very good idea. The sooner the better.

Advice that you may not want, don't gamble on the stock market and don't get cross threaded with CRA.

You are trying to address your problems in a very adult fashion and this will work but I think that you would bennefit from more help than you can get here.

Good luck!

[ditch donkey]

My two cents-

You don't have that big of a problem. Someone speculated your income north of $200 000, so lets use that.

This is what I would do. You're paying $1162 bi weekly for a mortgage. Is one of those payments an extra? If it is, I would stop the extra payment. You don't actually have the money to make an extra payment.

I would not refinance and use the equity to pay off the other debts. You're not paying anything off, just moving one debt to the other debt.

I would set myself up on a wage, auto deposit from my company into my personal account. A real wage based on your necessary expenses, after you figure out a tight written budget. You've likely been using your company bank account as your personal chequing account, dipping in there when you feel you need something. I been there. Real people don't get to tap into the employers bank account when they have over extended themselves, and we shouldn't either.

Get current on paying your taxes for the personal income you've made in 2024, and set aside the money you'll need to pay your business tax.

Sell your fossils, and records and stocks. I would sell all the fossils together, all the records together. Probably at a discount. Other wise you're going to spend a lot of time selling 2-3 records at a time for $200 every 2-3 months and that money will not actually filter into your debt. It will evaporate.

Crush your $12000 credit card bill, and get rid of your cards. They're credit cards, you're not paying them now cause you don't have the money. Stop spending money you don't have.

Pay off your income tax debts, then personal loans.

Honestly I think you have 6 months of hard living to get your feet under you, and you can have all your non mortgage debt payed off in another 18 - 24 months. Probably way earlier if you really cut your spending to actual essentials. Like, real actual essentials!

I'm a big Dave Ramsey fan. Look him up. If nothing else, use his budgeting app.

[Back Country Hunter]

Penalties and interest on long overdue tax payments can often exceed the amount of the tax owing. Attack the expenses that are causing the most financial distress first.

[Au revoir, Gopher]

Towards the goal of avoiding this mess in the future, might I suggest you read Wealthing Like Rabbits, it is an introduction to personal finance. It is written for a younger audience, but I think most people can find some bits of wisdom in there.

ARG

[elkhunter11]

With an income of $200k, a drastic plan could resolve a lot of issues in two years. The entire family will likely be very unhappy for this period.Then you have to keep managing money wisely, to pay off the rest, and not accumulate any more debt.