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1
Posted on 8/25/24 at 3:58 pm to Ostrich
So, live on 120 doesn't work.
Posted on 8/25/24 at 4:02 pm to VABuckeye
He gets $150 taxed right now. He can live off of $120 taxed for a year while paying off the debt.
But again, I bet he could sell a truck right now and get it cleaned up.
But again, I bet he could sell a truck right now and get it cleaned up.
This post was edited on 8/25/24 at 4:03 pm
Posted on 8/25/24 at 4:07 pm to Ostrich
I don't disagree. It's just that your math is way off. If he's getting taxed at 30% and has a 401k ()which he does) and pays for health insurance his take home is maybe, maybe 100k.
Posted on 8/25/24 at 4:10 pm to VABuckeye
Obviously his income is taxed. To which again I’m saying he should be able to pay $30k off in a year. Probably won’t be a very fun year. Oh well.
Posted on 8/25/24 at 4:15 pm to AuBeerStud
Review your medical insurance closely.
Posted on 8/25/24 at 4:26 pm to Ostrich
Yeah, I'm just not sure it's realistic with 2 kids for him and one with ongoing medical issues. It's a tough spot to be in.
What I wonder is if his wife doesn't work, can she? Again , I don't know the extent of the medical issue and amount of time she has to spend with the child.
What I wonder is if his wife doesn't work, can she? Again , I don't know the extent of the medical issue and amount of time she has to spend with the child.
Posted on 8/25/24 at 5:01 pm to VABuckeye
No- I’m pretty educated in the subject.
Posted on 8/26/24 at 7:54 am to VABuckeye
quote:
Yeah, I'm just not sure it's realistic with 2 kids for him and one with ongoing medical issues. It's a tough spot to be in.
What I wonder is if his wife doesn't work, can she? Again , I don't know the extent of the medical issue and amount of time she has to spend with the child.
May take two years if he needs it. But agreed there are definitely better options than filing BK or taking a loan out on his 401k.
Debt consolidation may lower his interest rate but aggressively cutting back and tackling the debt is how he'll climb out of the hole.
Posted on 8/26/24 at 8:44 am to Ostrich
quote:
Debt consolidation may lower his interest rate but aggressively cutting back and tackling the debt is how he'll climb out of the hole.
Debt consolidation/an unsecured loan should be possible and I think it is a better option than a 401k loan or ruining his credit for years with bankruptcy.
Most loans can be paid off early without penalty. DO NOT accumulate new credit card debt while paying this off or you risk entering into a very steep and slippery slope into a debt cycle.
Reduce retirement contributions if you can/have to. Contribute to the match and stop. You can catch up once your finances are back in order.
Posted on 8/26/24 at 9:29 am to AuBeerStud
quote:
Equity in home? Do a HELOC Otherwise, do an unsecured loan
^^^This advice from Penn seems the most rational, given the situation.The greatest unknown is, of course, your daughter’s ongoing medical situation. I don’t have children, but I’m sure that must weigh heavier on you than the bills themselves.
As far as the past bills, what’s done is done. But depending on what her future medical needs may be, have you researched foundations or companies that offer assistance? I know that drug companies often offer reduced (or free) medications case by case. I don’t know your profession or line of work, but at times, employers will go above and beyond for employees with sick children (my former employer did). Also, is your insurance doing all that it’s obliged to do? Just some things to think about.
Best of luck to you and your family.
Posted on 8/26/24 at 7:42 pm to xBirdx
quote:
Please explain. Honestly, why not?
It’s not worth ruining your credit for 7 years over $30k of debt when you have other options.
Bankruptcy should be a last resort option.
Posted on 8/26/24 at 9:44 pm to southernelite
Ruining your credit is an overstatement.
You get a secured CC after being discharged, and in a year you’ll be in 700 credit score wise, able to buy house, car, etc.
I’ve seen it hundreds of times
You get a secured CC after being discharged, and in a year you’ll be in 700 credit score wise, able to buy house, car, etc.
I’ve seen it hundreds of times
Posted on 8/28/24 at 7:46 pm to xBirdx
Your family will be in my prayers! I don’t know all the details, but I’ve read that there are 0% credit card offers for like 18+ months for balance transfers. Again, I don’t know all the details, but if it’s straightforward enough to transfer all the credit card debts to a credit card that charges no interest then that may be an option. It does seem a little counterintuitive that you need to open another credit card in order to get out of credit card debt. Does anyone know how these things work?
Posted on 8/29/24 at 8:10 am to damonster
Usually there is a 3-5% charge on the rolled balance, but if it's for 18 months it's better than running a 23.9%
Posted on 8/29/24 at 8:32 am to RJSambola
This is what I would do in this situation
1. Open a 18 month 0% cc and transfer the $30k balance, it will cost 3% probably, so ~$900.
2. Cut up all the credit cards, stop using them, we cant use them as a crutch any more and get back into this situation. In the long run you need an emergency fund saved up for emergencies like with your daughter.
3. Make a very specific plan to pay off that $30,900 over the next 18 months. Get some extra income going between you and your wife, cut some expenses, a blend of this will really help you out rather than doing it all 1 way or the other.
4. $30,900 over 18 months is $1,717/mo, thats what you need to average to pay it off. So again, find that extra ~$1k in your budget each month from extra income and cut expenses, you can do it.
5. After all this is over, you've been putting all this extra monthly towards the credit cards and they will be gone. Now you have all this extra money each month, so start building an emergency fund of 3-6 months of expenses...use this in the future to pay medical things that pop up.
To do it this way you will get rid of the credit card crutch, save yourself about $5k-$6k in interest even if you paid off the current cards in the same amount of time (18 months), and get a nice nest egg built up for emergencies you wont have to keep throwing on credit cards.
Dont take the easy way out, there's plenty of stats out there that show debt consolidation, 401k loans, etc etc to "pay off debt" - really just moving debt around, shows these people end up right back where they are in the future because no behavior was changed, and ultimately the behavior is what needs changing.
1. Open a 18 month 0% cc and transfer the $30k balance, it will cost 3% probably, so ~$900.
2. Cut up all the credit cards, stop using them, we cant use them as a crutch any more and get back into this situation. In the long run you need an emergency fund saved up for emergencies like with your daughter.
3. Make a very specific plan to pay off that $30,900 over the next 18 months. Get some extra income going between you and your wife, cut some expenses, a blend of this will really help you out rather than doing it all 1 way or the other.
4. $30,900 over 18 months is $1,717/mo, thats what you need to average to pay it off. So again, find that extra ~$1k in your budget each month from extra income and cut expenses, you can do it.
5. After all this is over, you've been putting all this extra monthly towards the credit cards and they will be gone. Now you have all this extra money each month, so start building an emergency fund of 3-6 months of expenses...use this in the future to pay medical things that pop up.
To do it this way you will get rid of the credit card crutch, save yourself about $5k-$6k in interest even if you paid off the current cards in the same amount of time (18 months), and get a nice nest egg built up for emergencies you wont have to keep throwing on credit cards.
Dont take the easy way out, there's plenty of stats out there that show debt consolidation, 401k loans, etc etc to "pay off debt" - really just moving debt around, shows these people end up right back where they are in the future because no behavior was changed, and ultimately the behavior is what needs changing.
Posted on 8/31/24 at 9:05 am to xBirdx
quote:
Ruining your credit is an overstatement.
I’ve seen it hundreds of times.
You’re a bankruptcy attorney? Just curious how you’d have seen this hundreds of times.
Posted on 8/31/24 at 10:20 am to Jag_Warrior
Exactly. I’d also like to see this 700 score in a year.
Posted on 9/1/24 at 12:19 pm to AuBeerStud
Never pay for medical you don't have the cash for with credit cards. As long as you are paying SOMETHING they aren't going to come after you. I mean, if you have the cash and no debt, swipe that thing and get the rewards, but don't go into real debt to pay for medical debt.
I know this doesn't help you, but it can help those in the future. Most hospitals have programs where they will wipe your remaining debt out after insurance pays because they HAVE to provide a certain amount of "charity" care to remain non profit. Everyone thinks Ochsner was being so kind clearing peoples medical debt... nah, they needed to to remain a non profit.
I know this doesn't help you, but it can help those in the future. Most hospitals have programs where they will wipe your remaining debt out after insurance pays because they HAVE to provide a certain amount of "charity" care to remain non profit. Everyone thinks Ochsner was being so kind clearing peoples medical debt... nah, they needed to to remain a non profit.
Posted on 9/2/24 at 1:35 am to AuBeerStud
I totally get it; dealing with debt while handling medical bills is rough. I've been through debt consolidation myself and found it helpful when it lowered my monthly payments and got me a better interest rate. You might want to check out balance transfer credit cards or personal loans with lower rates. Just be sure to read the terms carefully.
As for tapping into your 401k, it can be a last resort, but I’d weigh the pros and cons carefully. Sometimes, talking to a financial advisor can give you a clearer picture of what’s best.
As for tapping into your 401k, it can be a last resort, but I’d weigh the pros and cons carefully. Sometimes, talking to a financial advisor can give you a clearer picture of what’s best.
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