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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 7:16 pm to Drizzt
I’m currently making $125,00 a year. My only notes besides credit cards are the house at $1,100 a month, now one car at $600 a month (was paying $530 for the Tahoe being sold), the credit cards, and monthly utilities, cable, and cell phones. My food bill is high cause I have a three year old and two teenage boys that eat twice as much as me. My main bill is Doctor bills for me and my wife, not counting insurance premiums for five that totals 19,000 a year (prior to the doctor bills). My current employer doesn’t offer health insurance.
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 7:24 pm to anc
quote:
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.
I really didn’t mean run up the credit cards as in going by something frivolously, I just mean I’m spending a couple thousand more a month than I’m actually making so the credit card balance just keeps going up by the end of this year I will probably owe close to $70,000 in credit card debt.
Posted on 2/25/24 at 7:32 pm to TIGERSby10
Have you considered finding a new employer? That $19K in after tax health insurance is brutal on your income.
Posted on 2/25/24 at 7:41 pm to lynxcat
quote:
Have you considered finding a new employer? That $19K in after tax health insurance is brutal on your income.
I am about maxed out for my profession (construction estimator). I’m a Chief Estimator for a mid-sized company that only works me about 35 hours a week and I’m close to home. I could go work for a larger company but would have to work many more hours (55 a week) and be further from home, but after having done that for 25 years, when I was diagnosed with cancer, I promised myself I would never do it again. I want to spend more time with my family, in case I don’t have many years left.
Posted on 2/25/24 at 8:03 pm to TIGERSby10
No reason you should be thinking about bankruptcy. Get on a budget and cut where you can. Also wife can do some work from home even with back issue. You should be able to do this. Good luck.
Posted on 2/25/24 at 8:35 pm to TIGERSby10
You may be eligible for a 401k hardship withdrawal due to the medical bills. You maybe be forced to make your case but what you stated here seems exactly why it was created. It’s probably a taxable event but no additional penalty.
Might be worth investigating.
Sorry about your situation.
Might be worth investigating.
Sorry about your situation.
Posted on 2/25/24 at 8:37 pm to TIGERSby10
Healthcare Marketplace
Posted on 2/25/24 at 8:53 pm to jamiegla1
quote:
best advice is to ignore everything you read on this board. No offense but ive only ever lost money based on advice here.
Sorry about your SLI and other penny stock investments.
Posted on 2/25/24 at 8:58 pm to TIGERSby10
quote:
I could go work for a larger company but would have to work many more hours (55 a week) and be further from home, but after having done that for 25 years, when I was diagnosed with cancer, I promised myself I would never do it again. I want to spend more time with my family, in case I don’t have many years left.
I get it, but if you do have time left, you and your family are looking at financial ruin on this pace. Your follow up posts make it clear this is not a one time fix to your past problems, but an ongoing problem.
Posted on 2/25/24 at 11:05 pm to jamiegla1
quote:
best advice is to ignore everything you read on this board.
this proves you are a dumbfrick know nothing on a myriad of topics we discuss here.
quote:
No offense but ive only ever lost money based on advice here.
Posted on 2/25/24 at 11:13 pm to jamiegla1
quote:
best advice is to ignore everything you read on this board. No offense but ive only ever lost money based on advice here.
Guessing the meme stocks, Penny stocks and crypto gambling didn't work out for you. Who couldn't see that coming.
Guessing you skipped the part where the non gamblers told you to invest in low cost broad index funds
Posted on 2/26/24 at 5:30 am to slackster
quote:
Sorry about your SLI and other penny stock investments.
lol yeah. im very bitter about SLI. I really shouldn't have made that comment.
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