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Started By
Message
Debt consolidation
Posted on 8/24/24 at 9:44 pm
Posted on 8/24/24 at 9:44 pm
I know you guys are smart with your money and never had to deal with this, but I was wondering if any of you have had to do debt consolidation? If so, any advice? Or is it a bad idea?
I have a little girl with medical problems and we’ve paid a grand here or five grand here on credit cards. It’s ballooned to over 30 grand. Now everything is getting to a point where I’m not sure if we tackle it anymore.
Looking back, I wonder if I should have used some of my 401k to pay the medical bills. I can only touch it for medical bills or to buy a house. We’ve tighten the budget a ton, but its one thing after another hitting us right now. (Medical stuff for girls). Any advice is appreciated.
Married dude w/ wife
2 kids, one with medical conditions
I make around $150,000 a year
House with 2.3 APR (so refinancing and taking equity from home is last terrible resort)
Thanks for any solid advice!
I have a little girl with medical problems and we’ve paid a grand here or five grand here on credit cards. It’s ballooned to over 30 grand. Now everything is getting to a point where I’m not sure if we tackle it anymore.
Looking back, I wonder if I should have used some of my 401k to pay the medical bills. I can only touch it for medical bills or to buy a house. We’ve tighten the budget a ton, but its one thing after another hitting us right now. (Medical stuff for girls). Any advice is appreciated.
Married dude w/ wife
2 kids, one with medical conditions
I make around $150,000 a year
House with 2.3 APR (so refinancing and taking equity from home is last terrible resort)
Thanks for any solid advice!
11
Posted on 8/24/24 at 9:45 pm to AuBeerStud
If you can get a lower interest rate, yes.
Posted on 8/24/24 at 10:05 pm to AuBeerStud
Do you suspect the medical debt will grow more?
Can you meet the monthly CC minimum payments or put more down to top of the monthly payments?
Paying $650/month on $30k in CC debt at 25% APR will take 13 years to pay off with the total amount of payments exceeding $72k at the end of the 13 years.
If you can take a loan against 401k, do that and pay off the CC medical debt and make an effort to repay the 401k loan ASAP.
Can you meet the monthly CC minimum payments or put more down to top of the monthly payments?
Paying $650/month on $30k in CC debt at 25% APR will take 13 years to pay off with the total amount of payments exceeding $72k at the end of the 13 years.
If you can take a loan against 401k, do that and pay off the CC medical debt and make an effort to repay the 401k loan ASAP.
Posted on 8/24/24 at 10:13 pm to AuBeerStud
You could apply for a HELOC to get equity out of the house.
Posted on 8/24/24 at 10:29 pm to bubbz
I can’t take a loan off my 401k unless it’s for medical or to buy a house, to my knowledge. I’ve already put the medical bills on the cards. Yes, I expect more medical bills. I’ve never heard of HELOC, will check it out.
Posted on 8/24/24 at 10:56 pm to AuBeerStud
What about a debt consolidation loan? I think SoFi offers them and other similar companies. I know Amex does private loans as well that would cover that at a much lower rate.
Posted on 8/25/24 at 4:52 am to AuBeerStud
Equity in home? Do a HELOC
Otherwise, do an unsecured loan
Just be careful about going back to CC’s
Otherwise, do an unsecured loan
Just be careful about going back to CC’s
Posted on 8/25/24 at 7:21 am to AuBeerStud
Never heard of limitations on why you need to take a 401k loan, but I suppose they could exist. But before assuming, I’d ask and would be prepared to provide invoices/receipts to prove it’s medically related.
One thing to watch with debt consolidation loans is they may demand/insist you close all active credit cards, which could be a problem if you anticipate continued expenses.
Unsecured loan may be the best option (assuming 401k is out) for past debt. For future medical bills, could you just have the facility bill you? Then you can make small payments towards the balance each month, and as long as you’re paying they won’t push you to collections and may even offer a reduced amount to settle it and get it off of their books
One thing to watch with debt consolidation loans is they may demand/insist you close all active credit cards, which could be a problem if you anticipate continued expenses.
Unsecured loan may be the best option (assuming 401k is out) for past debt. For future medical bills, could you just have the facility bill you? Then you can make small payments towards the balance each month, and as long as you’re paying they won’t push you to collections and may even offer a reduced amount to settle it and get it off of their books
Posted on 8/25/24 at 9:11 am to AuBeerStud
quote:
I have a little girl with medical problems
Sorry you're going through this
quote:
It’s ballooned to over 30 grand. Now everything is getting to a point where I’m not sure if we tackle it anymore.
quote:
I make around $150,000 a year
Live on $120,000 for a year and pay off the 30
Posted on 8/25/24 at 9:21 am to Ostrich
quote:
Live on $120,000 for a year and pay off the 30
Seems like the best solution. Just suck it up for a year, no vacations or fancy dinners, instead of pulling money out the 401K or paying interest for years on the CC debt.
Posted on 8/25/24 at 12:17 pm to Miglez
Yeah, depending on other factors, $30k of debt on $150k salary should be very manageable.
Definitely look at other expenses. See if you can get out of a car note by trading in on a used car.
Definitely look at other expenses. See if you can get out of a car note by trading in on a used car.
Posted on 8/25/24 at 1:30 pm to Ostrich
There a thing called taxes, etc.
File BK on just the cc’s, agree to pay everything else as is. It’s unsecured debt
File BK on just the cc’s, agree to pay everything else as is. It’s unsecured debt
Posted on 8/25/24 at 1:36 pm to xBirdx
quote:
There a thing called taxes, etc.
File BK on just the cc’s, agree to pay everything else as is. It’s unsecured debt
Yeah, so? There are taxes on a $150,000 salary too. Filing bankruptcy on $30k debt making 150 is insane.
I bet OP has a truck note he can get rid of and make it even easier.
This post was edited on 8/25/24 at 1:37 pm
Posted on 8/25/24 at 1:47 pm to Ostrich
It may be insane, may not.
BK is based off of DEBTS, and income. Just bc you make a lot, doesn’t mean you don’t qualify.
Seems like a pretty reasonable reason to use the law as it’s wrote , if qualified.
BK is based off of DEBTS, and income. Just bc you make a lot, doesn’t mean you don’t qualify.
Seems like a pretty reasonable reason to use the law as it’s wrote , if qualified.
Posted on 8/25/24 at 2:13 pm to xBirdx
quote:
It may be insane, may not. BK is based off of DEBTS, and income. Just bc you make a lot, doesn’t mean you don’t qualify. Seems like a pretty reasonable reason to use the law as it’s wrote , if qualified.
It is not very reasonable at all given his situation.
Posted on 8/25/24 at 2:21 pm to southernelite
Please explain. Honestly, why not?
Posted on 8/25/24 at 2:40 pm to xBirdx
Because all he has to do is spend less money, and take that money and apply it to the debt.
We're not talking about 300k making 150k. We're talking about 30k.
I could make a plan and have that wiped out in 18 months.
We're not talking about 300k making 150k. We're talking about 30k.
I could make a plan and have that wiped out in 18 months.
Posted on 8/25/24 at 2:48 pm to thegreatboudini
I could as well.
Maybe he can’t , idk. Just an option
Maybe he can’t , idk. Just an option
Posted on 8/25/24 at 3:48 pm to xBirdx
quote:
File BK on just the cc’s, agree to pay everything else as is. It’s unsecured debt
I'm not sure you understand how bankruptcy works.
Posted on 8/25/24 at 3:49 pm to Ostrich
quote:
Live on $120,000 for a year and pay off the 30
He makes 150k. That doesn't mean he takes home 150k.
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