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Started By
Message
I need some advice from the financial gurus
Posted on 2/25/24 at 5:33 pm
Posted on 2/25/24 at 5:33 pm
I apologize for the lengthy message, but I wanted to add a lot of detail.
The first part is easy. I just purchased a used vehicle from a relative but had to borrow the $10K from my parents and will pay them back when I sell my vehicle. I’m actually downgrading vehicles to try to help with the finances. I still owe $5,200 on the Tahoe that I’m selling, but i’m hoping to sell it for about $14,000. I will pay my parents back the $10,000 I borrowed from them for the new vehicle (and come out of pocket for the remaining balance). Is it a good idea to put it for sale even though I still owe on it? Or will that cause issues with the buyer for a private sale, especially if they wanted to pay cash?
The only reason I asked the previous question was because I’m debating dipping into my retirement account to help pay off my vehicle that I’m selling now and pay down credit card debt which I have about $45,000.
Before anyone wants to criticize me, I’ve been fighting cancer for over three years (tumor free for almost a year) and my wife had back surgery and still has a lot of back pain and medical bills due to it. I don’t live lavishly. Very basic in fact.
I have two credit cards that have about $25,000 total on them but both have 0% interest for another year. I have two other credit cards that have a total of roughly $20,000 of debt that have roughly 20% interest being charged. I pay a little above the minimum, but this debt is not going away anytime soon. I’m going a little further into debt every month.
I am lucky enough to have about $430,000 in my retirement and I’m 51 years old. I plan to work for the next 14 years. I’m still paying a very cheap house note with only 3% interest and plan to pay that for the next 15 years, when my house will be paid off.
I know the golden rule, never touch your retirement, unless it’s absolutely necessary. I think I’m getting to that point where I may at least get enough to pay off the credit cards that have high interest. I can play the 0% interest credit card game for a while shuffling that remaining debt until I can pay it off. Do you think taking that much out my retirement is a good idea? I can’t go back to my parents for any more money, and I really don’t have any other sources besides, maybe borrowing against my house, taking out a small loan, or something of that nature, but that just further complicates me, trying to meet the budget each month.
If cashing out a portion of my retirement account is an option, I have about $50,000 in a Roth account and only about $25,000 in a work 401(k), and the remaining amount is in an IRA. I plan to retire around 65 years old And don’t plan on being in a high tax bracket. I also plan to live modestly as needed. What would be the better account to cash out from?
One other option I was considering since I still will have probably a couple years of heavy medical bills even if my cancer doesn’t come back and another few years of my wife’s back problems (or maybe never being better) so I was thinking about just getting a few more credit cards maxing them out for as long as I can, and then filing for bankruptcy. I already have a house and vehicles and would not need any other major purchases so I could go without needing good credit for 7 years.
I appreciate anyone who read all of this and can provide advice for any part of it. Thank you.
The first part is easy. I just purchased a used vehicle from a relative but had to borrow the $10K from my parents and will pay them back when I sell my vehicle. I’m actually downgrading vehicles to try to help with the finances. I still owe $5,200 on the Tahoe that I’m selling, but i’m hoping to sell it for about $14,000. I will pay my parents back the $10,000 I borrowed from them for the new vehicle (and come out of pocket for the remaining balance). Is it a good idea to put it for sale even though I still owe on it? Or will that cause issues with the buyer for a private sale, especially if they wanted to pay cash?
The only reason I asked the previous question was because I’m debating dipping into my retirement account to help pay off my vehicle that I’m selling now and pay down credit card debt which I have about $45,000.
Before anyone wants to criticize me, I’ve been fighting cancer for over three years (tumor free for almost a year) and my wife had back surgery and still has a lot of back pain and medical bills due to it. I don’t live lavishly. Very basic in fact.
I have two credit cards that have about $25,000 total on them but both have 0% interest for another year. I have two other credit cards that have a total of roughly $20,000 of debt that have roughly 20% interest being charged. I pay a little above the minimum, but this debt is not going away anytime soon. I’m going a little further into debt every month.
I am lucky enough to have about $430,000 in my retirement and I’m 51 years old. I plan to work for the next 14 years. I’m still paying a very cheap house note with only 3% interest and plan to pay that for the next 15 years, when my house will be paid off.
I know the golden rule, never touch your retirement, unless it’s absolutely necessary. I think I’m getting to that point where I may at least get enough to pay off the credit cards that have high interest. I can play the 0% interest credit card game for a while shuffling that remaining debt until I can pay it off. Do you think taking that much out my retirement is a good idea? I can’t go back to my parents for any more money, and I really don’t have any other sources besides, maybe borrowing against my house, taking out a small loan, or something of that nature, but that just further complicates me, trying to meet the budget each month.
If cashing out a portion of my retirement account is an option, I have about $50,000 in a Roth account and only about $25,000 in a work 401(k), and the remaining amount is in an IRA. I plan to retire around 65 years old And don’t plan on being in a high tax bracket. I also plan to live modestly as needed. What would be the better account to cash out from?
One other option I was considering since I still will have probably a couple years of heavy medical bills even if my cancer doesn’t come back and another few years of my wife’s back problems (or maybe never being better) so I was thinking about just getting a few more credit cards maxing them out for as long as I can, and then filing for bankruptcy. I already have a house and vehicles and would not need any other major purchases so I could go without needing good credit for 7 years.
I appreciate anyone who read all of this and can provide advice for any part of it. Thank you.
12
Posted on 2/25/24 at 5:40 pm to TIGERSby10
I can’t see any problem selling the vehicle.
Pay off the credit cards with the Roth account if everything you said is to be believed. You should probably consult a CPA and/or an hourly financial advisor to set up a plan for you.
While I appreciate that this can be a valid option, it just feels like theft to me. I can’t condone it.
Pay off the credit cards with the Roth account if everything you said is to be believed. You should probably consult a CPA and/or an hourly financial advisor to set up a plan for you.
quote:
One other option I was considering since I still will have probably a couple years of heavy medical bills even if my cancer doesn’t come back and another few years of my wife’s back problems (or maybe never being better) so I was thinking about just getting a few more credit cards maxing them out for as long as I can, and then filing for bankruptcy. I already have a house and vehicles and would not need any other major purchases so I could go without needing good credit for 7 years.
While I appreciate that this can be a valid option, it just feels like theft to me. I can’t condone it.
Posted on 2/25/24 at 5:43 pm to TIGERSby10
What are you making a month and what are your average monthly bills? Hard to answer the bankruptcy question without this information.
Posted on 2/25/24 at 5:44 pm to TIGERSby10
I understand your situation is complex and requires careful consideration. I cannot offer financial advice, but I can share some information and alternative strategies to consider:
Selling the Tahoe:
Selling with a lien is possible: You can definitely sell your Tahoe even though you still owe money on it. Most dealerships can handle the lien payoff and title transfer for you. Selling privately will require the buyer to work with your lender to pay off the remaining balance and get the title transferred. Transparency about the lien is crucial during the selling process.
Consider the alternatives: Before dipping into your retirement, explore other options like negotiating a lower payoff amount with your lender, investigating refinancing options for a lower interest rate, or extending the loan term to lower monthly payments.
Managing your debt:
Tackle the high-interest debt: Prioritize paying off the credit cards with 20% interest. Utilize the 0% interest cards for balance transfers strategically, but be diligent in avoiding further charges on those cards. Consider a debt consolidation loan to combine and potentially lower your interest rate.
Seek professional financial advice: Consulting with a certified financial planner can help you create a personalized debt management plan based on your specific financial circumstances and goals.
Retirement savings:
Accessing retirement funds: Be extremely cautious about taking money out of your retirement accounts. Early withdrawals incur penalties and taxes, significantly impacting your future financial security. Explore all other options before considering this step.
Alternatives to bankruptcy:
Debt management plan: A credit counseling agency can help you create a repayment plan with your creditors to settle your debt over time. This can be a viable alternative to bankruptcy and help you maintain good credit standing.
Negotiate with creditors: Contact your creditors directly and explain your situation. They may be willing to work with you on reduced payments, lower interest rates, or other solutions.
Selling the Tahoe:
Selling with a lien is possible: You can definitely sell your Tahoe even though you still owe money on it. Most dealerships can handle the lien payoff and title transfer for you. Selling privately will require the buyer to work with your lender to pay off the remaining balance and get the title transferred. Transparency about the lien is crucial during the selling process.
Consider the alternatives: Before dipping into your retirement, explore other options like negotiating a lower payoff amount with your lender, investigating refinancing options for a lower interest rate, or extending the loan term to lower monthly payments.
Managing your debt:
Tackle the high-interest debt: Prioritize paying off the credit cards with 20% interest. Utilize the 0% interest cards for balance transfers strategically, but be diligent in avoiding further charges on those cards. Consider a debt consolidation loan to combine and potentially lower your interest rate.
Seek professional financial advice: Consulting with a certified financial planner can help you create a personalized debt management plan based on your specific financial circumstances and goals.
Retirement savings:
Accessing retirement funds: Be extremely cautious about taking money out of your retirement accounts. Early withdrawals incur penalties and taxes, significantly impacting your future financial security. Explore all other options before considering this step.
Alternatives to bankruptcy:
Debt management plan: A credit counseling agency can help you create a repayment plan with your creditors to settle your debt over time. This can be a viable alternative to bankruptcy and help you maintain good credit standing.
Negotiate with creditors: Contact your creditors directly and explain your situation. They may be willing to work with you on reduced payments, lower interest rates, or other solutions.
Posted on 2/25/24 at 5:46 pm to TIGERSby10
Man, I’m sorry for what you are going through.
The vehicle sale is no issue. People sell vehicles all the time with balances on a loan.
Does your retirement account allow you to take out a loan? If so, the rate may be less than the penalty but it may just be easier to pay off everything.
The running up credit cards and declaring Chapter 7 thing is scammy and actually illegal. If the court feels you did this, you could face jail time.
The vehicle sale is no issue. People sell vehicles all the time with balances on a loan.
Does your retirement account allow you to take out a loan? If so, the rate may be less than the penalty but it may just be easier to pay off everything.
The running up credit cards and declaring Chapter 7 thing is scammy and actually illegal. If the court feels you did this, you could face jail time.
Posted on 2/25/24 at 6:43 pm to TIGERSby10
best advice is to ignore everything you read on this board. No offense but ive only ever lost money based on advice here.
Posted on 2/25/24 at 7:07 pm to TIGERSby10
As others said, selling car w a lien is a common occurrence. Before going private sale route, also look into selling via carmax, Carvana… or whoever else is out there. They can deal w the lien, handle all paperwork, and give you a decent price.
I’d try playing the 0% cc game for awhile before touching retirement money. Even as much as applying for new cc w 0% financing for 12/18 months. I’d also ask around about bank loans to payoff all the cc and agree to cut them up. You can always get new ones later.
For future medical debt, look into having them bill you for the services instead of credit cards. I have heard you can negotiate the amounts better after the fact, and you can often stretch them out by making very minimal payments.
I’d try playing the 0% cc game for awhile before touching retirement money. Even as much as applying for new cc w 0% financing for 12/18 months. I’d also ask around about bank loans to payoff all the cc and agree to cut them up. You can always get new ones later.
For future medical debt, look into having them bill you for the services instead of credit cards. I have heard you can negotiate the amounts better after the fact, and you can often stretch them out by making very minimal payments.
Posted on 2/25/24 at 7:19 pm to TIGERSby10
I believe you are allowed to take out any Roth IRA contributions penalty free. After all, it’s your money which has already been taxed.
So for example if you have $50k in a Roth IRA and say $40k are contributions and $10k of investment growth, you can take out up to $40k penalty free.. hopefully someone will correct me if I am wrong.
Personally, I think withdrawing those funds to pay of the 20% cc debt is your best option.
So for example if you have $50k in a Roth IRA and say $40k are contributions and $10k of investment growth, you can take out up to $40k penalty free.. hopefully someone will correct me if I am wrong.
Personally, I think withdrawing those funds to pay of the 20% cc debt is your best option.
Posted on 2/25/24 at 8:37 pm to TIGERSby10
Healthcare Marketplace
Posted on 2/26/24 at 4:54 pm to TIGERSby10
How much equity in your house?
Posted on 2/26/24 at 8:06 pm to TIGERSby10
Can you take out a 401k loan and pay off the credit cards?
The 10% hit penalty plus taxes would likely not make it worth cashing in part of your 401k.
The 10% hit penalty plus taxes would likely not make it worth cashing in part of your 401k.
Posted on 2/27/24 at 6:51 pm to TIGERSby10
quote:
I just purchased a used vehicle from a relative but had to borrow the $10K from my parents and will pay them back when I sell my vehicle. I’m actually downgrading vehicles to try to help with the finances. I still owe $5,200 on the Tahoe that I’m selling, but i’m hoping to sell it for about $14,000. I will pay my parents back the $10,000 I borrowed from them for the new vehicle (and come out of pocket for the remaining balance).
I'm trying to understand what your thinking is/was here. You only owed $5,200 on your Tahoe but you decided to borrow $10,000 from your parents to buy a car from a relative and "come out of pocket for the remaining balance"...how much is the remaining balance? What was the total price of that car you bought from the relative?
I'm not understanding why you wouldn't have just paid the $5,200 left on the Tahoe? Yeah, you might can sell it for 14K but what if you don't get 14K? What were trying to accomplish doing all this? You said you were downgrading, but you just went into more debt. How much was the car you bought from the relative?
Posted on 2/28/24 at 7:09 pm to TIGERSby10
Cash out 25k from retirement and pay off all of the 20% credit card. That’s almost 600 a month in payments alone.
See if you can sell car to somewhere like Carmax. They’ll pay off your balance from the sale and give you the rest.
Take the extra monthly revenue from no car or 20% interest CC payment and balance your budget where no further debt is necessary, then whatever is left put towards paying down 0% interest CC. When 0% runs out, get another 0% CC from a different company and transfer balance and continue to pay down. Should pay it off in 4 years if you can do 500 a month at 0%. That gives you 9 years until retirement, at that point put back any extra monthly income from your paid off debts back into retirement until you get your 25k back.
See if you can sell car to somewhere like Carmax. They’ll pay off your balance from the sale and give you the rest.
Take the extra monthly revenue from no car or 20% interest CC payment and balance your budget where no further debt is necessary, then whatever is left put towards paying down 0% interest CC. When 0% runs out, get another 0% CC from a different company and transfer balance and continue to pay down. Should pay it off in 4 years if you can do 500 a month at 0%. That gives you 9 years until retirement, at that point put back any extra monthly income from your paid off debts back into retirement until you get your 25k back.
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