expressman
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| Debt Questions |
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I have a personal debt questions that I just do not know the anwser to
I have a credit card debt of about 8,000 that is pretty high interest...a 2 stores credit cards totally about 3,000 and a personal loan of about 5,000 that is abt abt 17 %
I have about 6,000 in cash in savings and 2,500 in stocks....what should I do about the debt
any help is much appreciated
thanks
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Wed May 10, 2006 12:07 am |
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Kiaser
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That is all heavy consumer debt with high interest rates. You'd be best off the pay those off as quickly as possible (as the interest is not tax deductable like mortgages or student loans, and it's interest rates will eat you alive).
The ONLY way that money is gonna do you any good in stocks or savings is if you're gonna be able to pull at least 2% to 4% higher in interest earnings OVER what the consumer debt is costing you in interest (as 2-4% more will be given up to taxes, loads, and fees).
Paying down debt is extremely boring and people don't consider it an investment. However, it's one of the only investments where you can guarantee a return and not be taxed on it (saving hundreds of dollars in interest you would have paid, as opposed to making hundreds of dollars in interests that you have to pay taxes on).
Keep some cash in reserve for emergency in a stable money market account, then put everything you've got into paying those debts (assets, longer work hours, blood and sweat, etc).
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Wed May 10, 2006 3:17 am |
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expressman
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I am 29yrs old and make about 90k a year right now.
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Wed May 10, 2006 4:06 pm |
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Kiaser
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quote:
Originally posted by expressman
I am 29yrs old and make about 90k a year right now.
Jesus, why do you even have these debts then? I mean you gotta have some pretty hefty financial obligations (child & spousal support, mortgages, student loans, etc) to make that much a year and carry around 16K debt in the long term.
Figure what you need to stay safe for a few months in case of bad luck (lost job, disability, etc) and keep that set aside as emergency funds. Everything else I'd suggest go right to the debts. Once you are free of those debts you'll have plenty of cash to put elsewhere.
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Wed May 10, 2006 4:41 pm |
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expressman
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I am trying to tone it down but my lifestyleis so expensive...I have a 2,000 mortgage and a 800 car note and thats it...I am trying to get a handle on it
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Wed May 10, 2006 4:46 pm |
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expressman
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Ok...so I have 1 card with 1200 high interest debt, 1 account with 900, and 1 account with 8,000. If I am going to put 6,000 into paying this off how do I decide how to allocate the money
thanks
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Tue May 16, 2006 2:46 pm |
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Kiaser
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quote:
Originally posted by expressman
Ok...so I have 1 card with 1200 high interest debt, 1 account with 900, and 1 account with 8,000. If I am going to put 6,000 into paying this off how do I decide how to allocate the money
thanks
Generally, money should be applied towards the highest interest rate debt first when working down debt. For non tax deductible debt (consumer loans for credit cards and cars, not mortgages or student loans), you should consider it one large debt (instead of multiple debts). So if you had $10,100 of consumer debt but $1,200 of it was high interest I would pay that first then work down the ladder accordingly.
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Tue May 16, 2006 3:09 pm |
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go2self
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Instead of thinly spreading your funds, why not stratgically target each debt in the order that would best benefit you in the long run.
Consider paying off the debts with the lowest balance first, then add the amount from the paid off debt to the next lowest balance debt.
The option to refinance your home allows you to pay off cards and deduct a portion of the interst.
Time is our most volatile resource that if not used immediately is lost instantly
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Sun Aug 06, 2006 10:24 pm |
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rachel59
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in a situaton like this id suggest debt settlemnt because with those interest rates youd be paying wat you owed twice. also with settlement u can cut don wat u owe by half. try a legit debt settlement company. need any suggestions?
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Tue Jul 20, 2010 4:24 pm |
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rachel59
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Hey you guys someone left me a mssg on another forum with a really awesome resolution company. I will do my research and get back to you all.
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Mon Jul 26, 2010 1:45 pm |
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Ashley Watson
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| Re: Debt Questions |
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you need to stay safe for a few months in case of bad luck and keep that set aside as emergency funds. Everything else I'd suggest go right to the debts. You had $10,100 of consumer debt but $1,200 of it was high interest I would pay that first then work down the ladder accordingly.
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Fri Aug 27, 2010 9:31 am |
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teal1066
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Stay away from loans for some time.If you want to take loans for your bankruptcy you can take online loans.
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Mon Aug 30, 2010 1:07 pm |
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jlevitt
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If I woke up in your shoes, I'd cash out the stocks. You'd have ~$8,500 in cash (minus any taxes) compared to your $8,000 in debt.
Then I'd pay off the 2 store cards ($3,000) and $4,500 of the other debt, leaving $500 in debt and $1,000 in cash.
The $1,000 stays in savings as a starter emergency fund and you can pay off the $500 in debt from monthly cash flow. You're debt free with a nice chunk of change in the bank in likely a few weeks!
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Tue Aug 31, 2010 2:51 am |
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teal1066
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Stay away from loans for some time and try to find a job..
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Tue Aug 31, 2010 1:15 pm |
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wystanfi
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| Chapter 7 Bankruptcy |
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You stay away from loans for some time.If you want to take loans for your bankruptcy you can take online loans.
Thank u.
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Thu Jan 13, 2011 11:07 am |
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