How I Overcame Major Debt I Didn’t Have

In around 2006/2007 I was paying $1250 rent a jump of 400 dollars over the previous month right before the government introduced legislation protecting renters in Alberta from crooked companies like Mainstreet Equity Group that I rented from at that time. During the winter my pipes froze and the heat went out. Naturally, I contacted the landlord and waited for them to fix it. They never did and the building in complete disrepair after many calls I decided to withhold my rent to help motivate them as money often does. The manager of the company said it didn’t matter if it was broken and that I would need to pay regardless right then.

Now to give you an idea of how cold it was it registered -40c outside and -1c inside when I had a government employee come in to verify this. I then asked them what they could do after that and to my astonishment he said nothing! So I called lawyers, family and lots of people to see what I could do. There was no protection for me anywhere it seemed like. To my astonishment a man arrived at my door and delivered me a letter to appear in court for non-payment of rent for that month.

At this point on my $18 an hour income I was feeling completely worn out, cold and helpless to do anything. I didn’t have a person in the world to help unable to afford a lawyer at that time. Any lawyer I talked to on the lawyer hotline I found told me to just move offering no advice otherwise. Feeling completely overwhelmed by anxiety over the whole ordeal I decided not to attend court for the judgement I had been served thinking that I had no rights. Being a regular early 20’s guy I had no idea what the not attending meant. I thought just by paying it things would go away as they should have. I was in for a real shock.

For over 7 years after that my long since paid $1250 rent haunted me. Something that a landlord had defrauded me of the basic essentials of life being heat in the place I had well over paid for was somehow in the system tarnishing me to all lenders with a complete inability to buy anything. I was not afforded the right to borrow anything despite full capacity to pay and then some. To banks, credit card companies and lenders I was as good as toxic sludge. It got to the point where I called different banks, credit companies and various companies to see why I was kept basically from affording the essentials of life such as a home like everyone else was. Every banker said the same thing which was basically until it was off my record despite being recorded as paid I would not be able to borrow from them. So feeling completely defeated exhausting my every resource to try to secure credit for years I gave up trying.

In 2009 during the peak of the recession I incorporated Making 8 Inc a marketing company I have been very successful helping people market their businesses with. In 2012 I incorporated a second business Oil Authority an international oil and gas directory that I paid to build out of pocket. By then I was doing anywhere from 8k to extremes of 70k in a month which all things considered I figured by then the banks would take good care of me. Boy was I ever wrong.

Despite having enough to buy half a condo in Edmonton in cash the bank the lenders still wouldn’t touch me. I couldn’t even get a credit card despite being 1 of only about 100 companies sent a letter to get a credit card. I called a ton of other banks, credit counselors and the like to see what I could do about this absolutely silly problem and nothing through the system worked. Banking officers told me the same story in which I wouldn’t be able to borrow anything despite my awesome earnings until I got more credit. Naturally, I said  how was I supposed to get credit if nobody would lend to me because of my history of no borrowing? They didn’t have an answer for me and I went months feeling really frustrated.

Looking at a successful family member that was a mortgage broker for over 25 years in the region I asked her what I could do. I mean with my earnings at the time I should have been able to go out and buy any house or car I wanted with no issues. She said that basically what I already knew that the average banker has little to no education on how the borrowing process actually works and everything is done in corporate now days.

The people you speak to at banks typically aren’t overly well versed on how things are done behind the scenes at corporate and the options available product selling aside. I asked my family what I was to do given that I was clearly earning lots and had saved in a similar fashion. I explained how I couldn’t even get a $1500 credit card at the time and was having to run my digital business through a card that did absolutely nothing for my personal credit history. I’ll tell you that travelling and running a digital business without a credit card is nothing shy of brutal if not almost impossible.

I was instructed to get two secured credit cards  through primary lenders of which they pretty much don’t advertise anywhere and pay it off regularly. Most bankers aren’t even aware of this and if you call a VISA centre today they won’t generally be able to get you one. She informed me the amount on the cards didn’t matter so long as I paid both on time and had a balance on them to show creditworthiness.

With the knowledge that the last 8 plus years had been wasted and I could have been using credit to buy a house etc I went to my bank extremely frustrated. That lack of knowledge had cost me a fortune. As expected I got the same song and dance even being told by my business banker at Scotiabank that I probably never would get credit with them ever. Disgusted I started calling other banks and knowing that was horrible customer service I contacted my branch to talk to the business banking manager. He was astonished by this behavior and beyond apologetic as I told him I was totally ready to walk.

I then on the spot set up two accounts one personal and one business for my company credit card wise including a line of credit. I did so with a secured credit card of which for 2 years I had to keep $7500 deposited in a 0.01% GIC which earned me little to no interest. For my $1500 credit card I had to put up like $2500 in a secured GIC with similar disgustingly low interest. I went to an alternative bank and took out a credit card for $500 just to generate some credit history. I was relieved but so frustrated that nearly a decade of my life and over 60k in paid rent plus the 50k I had at that time could have been used to pay for a condo outright in cash! The important thing I didn’t know after running 27k of purchases through my business account was that it’s not recorded on the personal credit side and that corporate accounts are their own entity like a person.

In 2012 my company Making 8 Inc experienced incredible growth and strong earnings. Convinced I’d be unable to obtain a house through silly lenders and disgusted with banks I looked at investing my money while solving an industry problem in the oil and gas industry. I was offered a job at Apple Inc but didn’t want to give up on my country that so many tech companies left of which we call, “The Brain Drain.” All the oil sites out there at the time and to this day for the most part are sloppy garbage which excessively charge industry members. I employed out of pocket  two developers with the budget of 20-25k to build a site and I would then use 35k for marketing with the prospects of a business that conservatively should earn 250k a year and likely $2.5MM a year with the end results of what should be Oil Authority Inc today.

The two developers that came highly recommended by my network unfortunately had never done anything nearly as sophisticated as the work I needed done. After burning through $40k I was financially tapped with these guys being left with nothing but questions as to how so long went by with no results I could monetize with almost all my savings. They produced a non-functioning site that only worked externally but I couldn’t use to make any money with because the internals were nothing short of garbage. After that I went through 3 overseas developers but ran out of money unfortunately on finally finding a talented developer for a fifth of the price.

My girlfriend of a year and a quarter being overwhelmed burying me with her anxieties left after an all paid trip to Mexico. She did this right after my biggest client I worked with for over 4 years from $4MM startup went to $100MM decided to internalize their marketing completely destroying all my hard work which overtook their multibillion dollar competition. The client was happy with my work but simply said he didn’t have time. It was pretty obvious for me what that girlfriend was about and she admitted it. Instead of being the synergetic girlfriend I was looking for she was gold digging instead of goal digging with me. Looking back I didn’t lose anything there and it taught me the significance of taking my time to find a good partner.

Completely having to step away from my core business Making 8 Inc to communicate to overseas talent I basically hit rock bottom financially not being able to focus my time on where I was actually making a lot of money. I had to leave my downtown Edmonton place of 5 years that increased their rental rates by 20% a year and took on a roommate to make some sacrifices for the gain of a greater future. My one client I ranked #1 across all keywords for an entire season that did $16MM annually in two cities skipped out on paying their bill which I planned on using the funds for accounting and taxes. My lawyers didn’t see any merit in the case as it wasn’t enough money for them to care about being the top lawyers in a city based on oil but encouraged me to go to claims court as it was a sure win. Being super focused on business I never went to court and that client got away without paying a dime.

Having hardly any cash I used tax deferment to allow myself more cashflow to work on OilAuthority.com exhausting all personal funds to try to see the site to the finish but unfortunately ran out when I had to rebuild the site from scratch including using innovative for the time responsive design 3 years before the rest of industry caught on. A few months later the government completely depleted my account of 100% of my funds. When I called the Canadian Revenue Agency they informed me that the laws on tax deferment for a fee had been eliminated and I would now have to pay a fabricated amount 4 times the amount my previous tax year based on no actual evidence because I hadn’t submitted tax forms. I explained that I likely didn’t owe them anything and would really appreciate if they lifted the fabricated amount  to allow me to generate some funds to get my accounting and the like done as client perception may be diminished suddenly invoicing from a new company. They didn’t care and nothing would be done until I paid them an amount I never owed a penny of.

I was unable to invoice through my core business but was still incorporated paying my top lawyers anyhow.  I improvised and invoiced through my second corporation so that I could actually earn a living. A year later I had bumped my credit up over 100 points from its prior which to this day have amazing credit overcoming insanely tough months. I’ve reduced my overhead over 400%  living below my means and my accounting fees reduced by 700% with a superior accountant that recently said to me, “I don’t know how you do it,” in a time where he describes it as a bloodbath out there.

I can borrow to buy things and despite what a stupid system did I was able to get out of it. Everyone I knew family included told me to give up and change my direction. I now drive a $50k vehicle and am now afforded the right to buy the things I should have been able to all along. I have learned to keep savings aside paying bills 3 months in advance, to replace consultants quickly, to have strong agreements with signed contracts on everything, to align myself with great people of varying backgrounds, clients pay up front and are happy to do so. I moved to Calgary in March 2015 a city with smart, driven, talent. While I put myself out there for people I don’t tend to allow anyone to take advantage anymore because you can’t help anyone if you can’t help yourself first.

My taxes are done and the government actually ended up owing me money for overpaying. I learned from the 45k of unpaid bills from clients that business isn’t just a handshake place where doing good work and being a good person overwhelms all. Outlining expectations are very important as people wouldn’t pay sometimes upwards of 6 months. Some skipped paying at all despite insane results. I’ve learned that the people around you are immensely important and to not be afraid to ask good questions to avoid certain types. It’s ok to walk away from opportunities if you think they will be a problem. Some risks are not worth the reward. Know your own worth and stick to it. There’s no room for weakness in business but one can always give back. In 2015 I walked away from a major investor in Oil Authority because I could tell the interests were only his own. Business and life has taught me a lot.

Today with smart, driven, talent, and a network of awesome people and armed with this life experience I can only help others grow. We started at the bottom and now we’re here. I work evenings and weekends without remorse growing each month as we are all fortunately afforded either monetarily or personal there is always room. Making 8 Inc has gone through 2 major recessions and will hit its 8th year next May which even for a startup under ideal conditions defeats all odds by over 50%. Oil Authority is nearly completed with no outside funding and today I go to the Global Petroleum Show to meet tons of people in industry people now in its 4th year since inception representing the oil & gas industry the world around with over 8,800 companies and growing.

So if you want to give up and think all paths are paved glamorously they might not be telling you the whole story. Every path is bumpy from every successful entrepreneur, billionaire to celebrities. It’s not I can’t afford it, but how can we afford it. That simple mental shift at 15  reading business books helped me overcome all this today. If you don’t want to live an average life then don’t. Fail forward, and take chances. They wont all work out but eventually with the right time in you’ll make it.

I hope this story helps inspire other people to never give up. My sharing this was inspired by John Oliver forgiving $15 million in debt the other day to complete strangers.

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