Serious Question, For Serious Adults, who do Serious Things

[RdeemingRainbow]

my car, I owe 19k
Credit Cards, around 5k
Student Loan, around 10k left

Pay off that credit card debt in full next month, you'll still have 20K in the bank. Make your car and loan payments as normal.

In December, you'll be back up to 23K. Pay 3K to your loan, pay your car as normal. You'll still have 20K in the bank.

In January, you'll be back up to 23K. Pay your car as normal, pay another 3K on your loan. Now your loan is down to 4K, your car is decreased by three payments. You still have 20K in the bank.

In February, you'll be back to 23K. Pay off the remaining 4K on your loan, pay your car payment as normal. Now you are at around 17-18K in the bank, right? Next month, in March, you will have only the car payment remaining, and will again be back up to 20K. Make your car payment as usual, and it'll now be down a total of five payments. How much is left?

The amount left on your car payment by April is all you'll have to pay off, and you said that by April you'd be in a position to start paying everything off anyway. Now instead of taking four months to pay it all off, you only have the car to pay off starting in April, and each month you've kept your bank balance at about 20K after getting paid for the month. You never see your bank balance dip more than about 5K per month, you have a healthy balance, and you're about to be free of all of those debts.

Added bonus idea -- rent out your condo instead of living there. If you're lucky, it's big enough that in theory at least two college students could live in it, so advertise it on nearby campuses if there are any relatively close. Two couples could live in it if possible, even. Say that on the ads. I know several people who own condos and who have started renting them out in exactly this way, and they make more money than their monthly mortgage payment for it. This is far easier than you'd expect.

You could then rent a townhouse (complete with a yard) for less than your condo payment, save money, and still be making your mortgage payment every month on the condo (with the rent money you get from the students). Consider that even if you charged LESS per month for the rent than you owe on the mortgage, you'd be getting rent money to help pay off most of the mortgage payment, so the money you still have to pay plus the money you pay to rent a cheap townhouse would STILL be less than you pay for your mortgage. You'd still be saving some money. Not a ton, but some, probably a couple hundred bucks each month.

 

[BillyZaned]

I love my condo... plus, you can't rent it out via bylaws....

 

[Addendum]

All my bills:

Student Loans
Rent/Utilities
Car Insurance
Internet

 

[enterthemadness]

I'm not in serious debt or anything... I still bank about 3 grand every month...

I'm just REALLY cheap...

Then you can't complain. Unless if you want x amount in bank by x amount time.

 

[PemLam]

Debt consolidation companies and bankruptcy lawyers wouldn't give serious thought to your case. Part of the consolidation and/or bankruptcy process is to review your existing financial situation via bank records, tax documentation and credit reports. If you truly do have that kind of money in the bank, no LEGITIMATE company will touch you.

Your debt to income ratio for the steps your considering taking have to be pretty severe, and yours obviously isn't.

 

[The Guard]

I had a friend who was in debt very badly, and consolidation helped her out quite a bit. She paid off $10,000 in debt in something like a year. It was a bear, but she did it.

It depends on your situation, though. Yours doesn't strike me as all that dire, and they're right. I don't think a legit company would touch you with a ten foot clown pole...because odds are they wouldn't make any money off you.

You don't want to put your student loans off any longer than you have to, because they'll get you on the back end. You're better off even just paying the minimum or even just over the minimum as I understand it.

You don't neccessarily HAVE to consolidate or go through another company, though. RdeemingRainbow has a point. If you know what you're doing, some credit card companies will listen to you if you make an offer to settle without representation.

But wait a minute...you're putting $3,000 in the bank? A month?

And you're in debt?

Something wrong with that picture.

You could be debt free within months and still have a comparable amount in the bank within a few months.

I mean, I have about $15 in my actual savings account, but very little debt all things considered.

 

[PemLam]

Once I get a house....

If you think you have bills now...wait until you get a house (which will be VERY difficult/impossible if you use a debt consolidation company or file bankruptcy).

Sorry, but you don't have debt...what you have are balances as a result of making a conscious decision not to pay off your existing bills...when you clearly have the means to do so.

 

[BillyZaned]

my thing is like... my one credit card... it's only got like 1500 on it... I could pay that off right now.... but the min payment is only like 30 bucks a month..... and my other one is only like 90 bucks a month... so it's not that bad...

I know what everyone is saying, because I'm paying some interest on this, and what I'm making in my savings account in interest is nothing compared to what I'm paying...


****, just looked at my mortgage payment...

I pay around 1250 a month.... times 12 months, times 30 years....

that's nearly 450,000 I'll be paying for my condo that's worth 165k right now.... WOW

 

[BillyZaned]

Just ran the numbers through at a secured 13.5% fixed interest rate for 120 months... I would paying about 40 more a month to consolidate.

to do it in 72 months, I will be paying 130 more a month...

yeah, forget that... maybe I should just take 16 grand, pay off both credit cards and student loans... then take that 260 I'm saving each month, and put it towards my car loan and get that paid off early... that way,

I'm paying for

Mortgage
Car

and I still have 6 grand in the bank, and I will be still banking 3 grand a month...

 

[RdeemingRainbow]

If you decide to do a big payoff of some of the debts, pay off the ones with the highest interest rates first (not counting your mortgage, obviously). Hell, one option if you don't want to make big payments all at once from your bank account is -- if your student loans and/or car payments have higher interest rates than your credit card, pay the loans and car off with the credit card since the interest rate is lower. You can even call your credit card company and push them for a lower rate, threatening to just pay off the total balance and cancel the card otherwise.

My wife and I have done this repeatedly -- REPEATEDLY -- to get our interest rates lower and our limit raised on our cards, and it works every single time. You can only do it about once or twice every year, but saying, "You can't lower the interest rate? Oh, well then I'll pay off the balance and cancel the card, because Discover Cards (or whatever competitor you pick to mention) offered me a far better rate." If you always pay your bills on time and use your card regularly, they don't want to lose you as a customer, trust me. My wife and I charge everything in day-to-day life on our cards and then pay them off in full every month, and only occasionally carry a balance just for the purpose of our credit ratings (it's dumb, but it matters that you sometimes carry a balance so it's good to actually do this sometimes). On average, it's probably two grand or so each month we charge and pay off, and we use it for everything like shopping, dining, movies, and so on. So the credit cards are more than willing to keep us around. Even lacking getting much from us each year in interest charges doesn't matter -- the cc companies get a percentage of every SALE, too (stores need to allow cc usage since so many customers use cc's, but the stores pay a percentage of every transaction directly to the cc company for the "right" to accept cc's). When you use a cc a lot, those transaction percentages add up fast, so they want you to stay with them.

So you could pay off that car and/or the loans, which likely have higher interest rates than your cc's, by putting them on the cc's. But FIRST, get the cc interest rates lower by threatening to leave for another company that supposedly offered you better rates. THEN charge the car and/or loans to pay them off. Presto! Transferred the debt to a far lower interest rate.

 

[BillyZaned]

Student loan is the lowest, followed by my car loan... both well under 10%...

CC are the highest, around 13%

 

[RdeemingRainbow]

Wow, definitely should be able to get that cc rate lower, at least down to 9% if you pay on time and use the card regularly.

 

[Shuley]

OK I've been in this situation multiple times...here is what you do...Pay off your one credit card at a time,when it's done..cut it up. Work on the second credit card...if your credit limit is 5K for example with a balance of 3500. Once you have it down enough,lower your credit limit and just keep that one card. Then work on the rest of your bills paying off the lowest balances you owe first.