Ask MetaFilter questions tagged with finance and debt

Help! Credit card elimination or consolidation?

antipode12 — Sun, 06 Dec 2009 09:31:20 -0800

Help! -- My credit debt is nearly $50,000, my mortgage is upside down by 25% and my fiancee walked out the door a month ago. I can't make my bills. I'm trying to sort out which route to go with the credit cards. A service like CCCS? Or some other route like Credit Elimination? Please help me understand this. Thanks

Financial crisis in the family, what can we do?

jrdnbaade — Fri, 04 Dec 2009 04:06:46 -0800

My mom was diagnosed earlier this year with diabetes, and thats where things started getting really bad. The insurance we have won't cover anything she's needed for it. She's doing tremendously better now, but it's been replaced by a deep depression because the extra costs are just too much.

She resorted to using credit cards to pay for her medication and supplies, and now that those are maxed we're even worse off because of those bills. She's been trying so hard to find some help but theres been nothing out there.

We applied for food stamps, but got turned down. She's looked for different insurance companies, but none will cover her because of the diabetes. She's been denied for loans to try and consolidate her debt. Even the debt consolidation companies she called won't help because theres no money to pay their fees. We can't even get a first mortgage because we don't have the money to pay for the application.

It's really hard seeing her so upset, and blaming herself for everything. I've gotten her to agree with my helping her budget to try and keep some safety nets, but that doesn't really help us until we get out of this hole.

She's a pretty timid person and I don't know if she's not being aggressive enough with the people she's been in contact with for help or what. She's been trying to find a new job too on top of all that because her boss has been treating her pretty badly and has recently cut her hours. It's been pretty rough in Michigan though as far as jobs come.

I thought I'd come here to seek out any suggestions to try to get us out of this mess. Any information on insurance companies that won't deny us for preexisting illnesses, any advice on getting ourselves out of this debt, even some budgeting tips for when we're in the clear would be greatly appreciated.

Use cash to start a business or for a down payment on a home.

mintchip — Tue, 01 Sep 2009 18:40:50 -0800

Use cash to start a business or for a down payment on a home. I have been interested in having my own business. I have read business magazines for years and have even had a couple of small service-based businesses that I ran part time. No big bucks there but a rewarding experience.

Recently I've been considering trying to start a business for real. I have a small sum of cash (between 10-20k) I've been slowly saving for a home down payment.

It's a tough choice. Since I need a home to live in, buying one would mean an investment in my future and security. However, chances are that I won't get rich working for a private company. In fact, it's quite hard to get ahead nowadays with most of the good middle management positions gone. Meanwhile, most of the people I've known who did quite well for themselves did it by owning their own business.

I'm not saying it's easy. I'm just thinking that owning a business seems like my best shot at getting ahead, and it also happens to be a genuine interest of mine. At the same time, starting a business is a huge risk (I think it's something like 4 out of 5 fail within 5 years) and I could lose the money as well as a lot of time and energy.

I believe I have many of the qualities that would contribute to success in business. But it's hard for me to know if I have all of them.

What's your take? How have those of you who have been in a similar position weighed the pros and cons of such a decision.

Risk-aversion shows I'm qualified, right?

Anonymous — Mon, 13 Jul 2009 11:59:57 -0800

Should I take out a full load of student loans to attend a top-6 law school right now? I just got accepted off the waitlist at the last minute. This is not a "should I go to law school?" question; I'm already excited and fully committed.

The question, rather, is how much risk should I take financially in this economy? I was not offered a grant or scholarship (and might have a better chance at being considered for one next year if I apply very early - I put my applications in very near the deadline instead of in the fall). I currently have a job that pays well enough to put some savings away by next year, let's say at least enough to cover living expenses over all 3 years, and hope to come up with some opportunities to enhance my income given the extra time. I also have some personal projects I could finish up and be satisfied overall with spending another year this way before embarking on a long-term, non-interruptible career path like law. Until this waitlist acceptance, I was perfectly content with reapplying next year.

I am passionate about becoming a lawyer but terrified of becoming a debt slave. I can't seriously consider the possibility of committing to a loan payment plan that lasts longer than 5 years; right now, my 5-year payment plan would be $4,000 monthly starting 6 months after graduation.

On the other hand, schools like Columbia, NYU and Chicago are extremely competitive. As I was waitlisted at all 3 this year, I may not be able to count on getting in next year and they don't give deferrals to waitlisted admittees. After applying to other schools, I am certain that these are the only ones I would seriously consider attending, especially on student loans. I think I might be game for big law, but my freedom to choose is more valuable to me than anything, and I don't want to be stuck with it if I genuinely hate it.

Biglaw isn't even hiring right now, and I certainly don't want to place a $200k bet that they will be by 2012. My loans and interest rates are a certainty; the economy and the effects the recession will have on the legal industry and my ability to thrive or survive as a member of it in the near future are anything but certain. If it becomes clear over the next 12 months that student loans this large would be a death sentence for anyone, I could come up with a plan B and be glad to have escaped such a fate, even if being a lawyer remains my first career choice.

So I could be making the biggest financial mistake of my life (there are suddenly no guarantees of summer associateships and huge starting salaries for anyone at any law school?!) - or throwing away the biggest opportunity of my life (admissions are likely to get even more competitive next year, although I do have competitive numbers and would like to chalk up having been waitlisted to having applied quite late and scoring a 6-point increase on the February LSAT after applying with a lower score from December). If I pass up an opportunity to go to my dream school that might not materialize again next year, I'll always regret it; if I find that my life is essentially over after graduation due to crushing debt obligations, I will probably lose the will to go on after a couple years. Which way to go?

How can I get an emergency loan to pay the rent?

Anonymous — Thu, 25 Jun 2009 10:13:24 -0800

How can I get an emergency loan to pay the rent? About a year ago I quit a job to start a business. The business was a website and I correctly assumed that once it was built it would require very little effort to maintain. I figured I was a couple years away from it becoming particularly popular and planned on getting a job (even temping) after it was completed. I had enough money have to be out of work for about nine months after my project was completed. In the first three months I searched for a job and it was pretty hopeless. I got depressed and more or less gave up for a couple months. I, more or less, snapped out of it eventually and have been looking for a job, any job since my needs aren't that great. I just haven't been able to get anything together so far. I don't have any credit cards or any debt. My expenses are low probably just a thousand dollars a month so I don't need a lot and am willing to pay sort of usurious rates if I need to. Calling on friends and family is not an option. What sort of options do I have?

Implications of Iceland's putative international debt arrangements?

laumry — Thu, 18 Jun 2009 17:07:42 -0800

Can anyone comment on the sovereignty implications of the putative debt agreements that the Icelandic government is seeking to enter into with Britain and the Netherlands? Hello all. I am writing on behalf of a friend of mine, who is a very concerned Icelandic citizen.

At the moment, the Icelandic government is apparently negotiating a debt agreement with the governments of Britain and the Netherlands. Earlier today, these putative debt agreements were leaked onto the internet. Here’s a link to a newspaper article in one of Iceland’s newspapers of record, that in turn gives links to the loan documents at the bottom.

The loan documents seem pretty short versus what I’d expect – 20 pages each. Our question is: what are the implications of these loan agreements for Iceland’s sovereignty?

I would be delighted to get views from not just any financiers and international lawyers, but also anyone else who can spare some time and critical faculty to take a look at this.

My friend believes that since Iceland’s population is so small, there aren’t many home-grown experts qualified to talk about this – and what few there may not be credible commenters given their role in Iceland’s recent financial history. Hence this shout out to Metafilter – international, intelligent, and independent!

I want my two dollars!

kaizen — Wed, 25 Mar 2009 18:20:48 -0800

What would happen if the United States defaulted on all of its debt, or simply said 'Screw off, I ain't payin!'. I know nothing about global finance, economics and power, but would like to understand what would happen if the U.S. could or would not repay its debt. If I default on a loan, someone is going to kick me out of my house. If the U.S. defaults on its loan, who would do the taking away, and what exactly would they take? If I am the biggest, meanest kid on the block, and everyone relies on me for candy, why do I have to pay you back? Can't I just kick you in the balls and keep your money?? I know this sounds stupid and simple, but what would stop the U.S. from saying to China, "F*ck you, I ain't payin, and by the way, I ain't buying anything from you anymore.". Who needs who more? How is power held it check when the sh*t really hits the fan?

credit ratings across nations

Anonymous — Tue, 13 Jan 2009 11:34:02 -0800

I was born in the US, lived in Canada for ten years, and moved back to the States last year. While I was in Canada, I built up a solid credit rating- I had two credit cards, an unsecured line of credit with low interest (7%) and overdraft protection on my checking account up to $3,500. At one point when I was underemployed I built up some credit card debt, but I payed it off. Last year, when I moved back to the US for grad school, I got into a bad pattern of leaning on my credit cards and low-interest line of credit to pay for moving and start up expenses. This June, the world financial collapse coincided with one of my own- I was employed super part time, was making around $750 a month and was struggling to pay rent and buy $20 worth of groceries a week. I just couldn't pay my debt, and I paid very minimally, then not at all. I know I probably should have called the bank and tried to work something out, but what can I say- I panicked and froze. Currently, my total debt load is $14,000 on the line of credit, $3,700 on the overdraft and $1,400 on my Visa. I've worked hard to hustle up jobs, and currently I am no longer as financially destitute as I was. I also have just now been taken to collections. I have an appointment with Canadian credit counseling (the reputable nonprofit that everyone goes to) on Thursday. I plan on amalgamating and paying off the debt.

My question is: how much, if at all, will my credit raring in Canada affecr my US credit rating? So far there seems to be no bleed-through- when I applied for a cell phone a year ago, with excellent credit in Canada, I was told that I had no credit rating in the US- not a bad one, just a nonexistent one. I told them I had great credit in Canada, and was told that the two systems don't relate at all, as the identification markers (Social Security Number and Social Insurence Number) are different. So I'm wondering, if that's so, if it might be so in reverse- that I could maintain good credit in the US even if mine in Canada has taken a hit. I'm not planning on taking out any new credit cards or debt, have worked up a budget, and all the good stuff- but I'd like to know that I could rent a car, not be screwed if I moved and am applying for a new apartment, etc.

Also, I've been told that the credit counseling service may not be able to help me, as I don't work one full-time job- I'm a performer and grad student with several part-time jobs, and sometime chunks of money from performance gigs, grants, etc. So I'm also wondering- given that they charge a fee, might it be better for me to work out my own deal with collections? I can defintiely pay off the small Visa ballance in one chunk this month, and can pay perhaps $500 a month towards the other two after that. Not great, but I could have this debt paid in three years if I stick to it.

Finally, does anyone know of any good budgeting software/budget plans for folks who are self-employed who don't have a regular paycheck? It's been a struggle for me to budget when I might only get $1,000 one month from my regualr small gigs, but then get $3,500 in one chunk from a university performance. Most budget info seems geared towards folks who have one, or two, steady jobs.

Thanks in advance!

How can I reduce my debt & improve my situation?

foodybat — Mon, 05 Jan 2009 10:09:22 -0800

I'm upside down in my house, have about $38k in CC debt. I make good money, but wanna try to find a faster way to recovery. Most the consolidators want my situation worse in order to make it better... & they all seem to offer the same basic thing, which i don't think is in my best interest. What is my best move from here? my situation is;

I'm upside down on house (which seems to be common here in Florida)... owe ~ $365k, value is probably $280ish...
this is broken into 2 mortgages; 1 at $302k (30 yr fixed @ 6.375%)... NOT behind in any payments....
The 2nd at $54k (FRHEL ? - w/15 yr BLN @ 8%)... i am paying additional principle on this one of $150/month & ... same as the 1st mortgage...NOT behind in any payments.

i have about $38k in credit card debt... virtually all are 6-8% apr.... except 1..but that will be brought back down in 2 months.
I usually pay slightly more than the minimum each month & again, NOT behind in anything...

i make approx. $150k/year... (and that's after the 15% pay cut i just took) I think my credit score is around 700, but i'm not positive....I was told the only reason it's this low is my debt to income ratio... (being too high)

The Company I work for pays for my car & fuel, my wife's car has 2 years left on the lease @ $711/month (that I pay for of course).

We've reduced some incidental expenses, but seems to be a drop in the bucket.

I have a motorcycle i'm TRYING to sell that should generate approx. $14k.... that I intend to use that to payoff some of the CC debt ....

I've contacted a few debt relief companies... but they all seem to offer the same basic service.... they negotiate w/my CC co's to reduce my overall debt by approx. 40%... but only after I am 2 months late in payment (thereby in default)... This would destroy my credit (score), but reduce my debt by 40%...

My overall plan currently is to sell the bike, knock $38 to $24k... & stay on my same path until something changes...

I have no other income ... & many other obligations ... so there isn't much wiggle room.

At this point, I don't believe my job is in jeopardy, I just feel I'm passively sitting on the side lines & that I could do some thing else or perhaps there's a plan out there that could drastically improve my situation or at least get me on the path to recovery faster.

I am open to all suggestions...

Lesser of two tax burdens?

al_fresco — Sat, 13 Dec 2008 15:40:17 -0800

My partner and I need to pay off some debt, and unfortunately we need to dip into our retirement funds. Our tax accountant is on vacation and we can't find the answer to our question. We have two sources–either sell some stock or cash out a couple of short-term IRA CDs. Which is the lesser of two evils? The service charge on either transaction would be about the same (~$50). We understand that the painful part would come in the form of the taxes on the amount we receive. Is there a difference in how the two types of transactions would be taxed? If we took a theoretical amount of $10k from either transaction, which would be taxed at a higher rate? What is the tax rate on either of these. I'm in California, and we'd need to do this before the end of 2008. If it matters, the money would go directly to pay off credit cards, car, student loans.

And it always makes sense to pay off debt before saving for retirement, right? (Higher interest rate on debt than retirement fund, blah blah). Oh, and we're living paycheck to paycheck.

Thanks in advance!

Financial crisis blog recommendations?

vizsla — Thu, 09 Oct 2008 15:21:38 -0800

Recommend any financial crisis blogs written by people who are following all the relevant indicators, or by people involved in the finance industry, who are trying to make sense of the market and economy?

Questions about the possible economic depression

mintchip — Tue, 16 Sep 2008 21:06:01 -0800

Questions about the best course of action to prepare for a possible economic depression I'm no economist, but I'm trying to learn about the possible economic depression everyone's been talking about since the recent financial upheaval. I have a number of questions.

1. I have always read that there are huge bargains to be had when the stock market tanks. If this is so, what stops investors from jumping INTO the market when there is a huge crash? For example, why not invest in an index fund as soon as the market drops off 500 points? Why *wouldn't* this be a good idea for the individual investor (assuming it isn't).

2. What would happen to people's outstanding debt if the companies they owe $ to went under? For example, did people's debts get wiped out with the banks that closed up shop during the Great Depression? What about nowadays...for example, what would happen to student loan debt if virtually nobody could afford to make payments?

3. Let's say you've got some extra cash flow right now...what's would be the best bet when preparing for a possible period of economic depression? Pay off outstanding debts? Stockpile money in order to buy up things once they've lost value? Etc.

4. How were some people able to purchase "bargains" during the great depression if indeed inflation caused money to lose most of its value?

5. Does FDIC insurance REALLY ensure that money is safe and accessible (up to the limits specified)?

6. Anyone care to venture a guess about what the next few years are going to look like economically?

So i'm frugal, but what's next ?

fizzix — Tue, 26 Aug 2008 12:28:42 -0800

I am a frugal person entering his senior year in college [age 21]. I have been following advice like the stuff in thread 84915and thread 99852 and living below my means. I sought advice in Financial books for college kids my age [for example, generation debt], but left feeling wanting more because they focus primarily on how to cut expenses [skipping the latte, etc]. So, I have some student loans already, but will need more for my senior year. I also have some money set aside, but I should I use this money to lower the loan amount that I'll take out or use this money for an investment (Roth IRA, index fund), and take out more for my student loans ? Here's my scenario:

- I have NO debt - EXCEPT from my Student Loan Debt

($46,025.40 for undergrad so far, heading into my senior year).
($27,519.40 are government loans - fixed rates, ),
the rest is from a private company, at variable rate -
A combination of federal and private loans
I am getting VERY Scared about affording this (right now, I have
estimated payments of $ 541.34, given the current interest rates and a normal payment schedule that is not income contingent).

- I have NO credit cards.

- I do have a checking account (with a debit card).

- I have a saving account (only 1.05% APR) of $ 800 (a 6 month
emergency reserve).

- In the past 5 months or so, I have saved 40 % of my income to a
general savings and a checking account

(it's only 1.05 APR, and I know there's better ones (ING, etc) but
both my [savings and checking]
banks charge a rather large fee (of $30 or so) for transactions from
one bank account to another,
for retirement.

My most important question is THAT I have received conflicting advice
regarding the following
situation:

This fall, I'll need to take out an additional $5,500 (estimated) for
living expenses (this is living frugally, rent, utilities, etc) (I am aware that I could work off campus more hours, but I have tentatively decided not to do that.
(I decided not to work more than 12-15 hours a week, while in school,
which can be for metatalk if you want to discuss that).

Should I take that 40% [which I saved - $650] and my federal work study job income ($2220) towards my expenses and take out a smaller loan (the advice from a counselor at the school financial aid office) ?
(Because any rate that I get on investing wouldn't be higher than my loan rate)
(I have not applied for the loan yet, so not sure of the rates that I'd be getting. This loan would be a private loan, because I am already taking out the maximum from Stafford and Perkins loans. I am looking at PLUS Loans - another govt loan, but that may not work, because my parents do not want a loan in their name).

Should I take that money and put it into certain investments for retirement (Roth IRA, Index Fund,etc) ?

Should I put that into something more safer like a money market account (Andrew Tobias' advice for those with less than $5,000) ?

Help me pay off my credit cards.

judge.mentok.the.mindtaker — Sun, 27 Jul 2008 19:08:54 -0800

I have: fair credit ( reported between 650 - 720 ). a student loan and an auto finance loan of no more than $30,000 in combination. ~$9000 in credit card debt spread between 2 cards. What is a good way to pay off my high interest credit cards? I am looking at options like small loans, debt consolidation, possibly even balance transfer to a new card (although I hear that hurts your credit score?). Any good sites that can help me budget or somehow help me get out of paying like $150+ in finance charges every month?

Money money money, Must be funny

Bakuun — Tue, 01 Jul 2008 21:06:31 -0800

A noobie question on credit scores! I know raising your score is partly done by reliable monthly payments on credit cards and loans - and people who are just starting out to build their scores, are often advised to get a card and begin to responsibly pay it off, to catch the notice of the reporting agencies. Would that mean that if you can pay off a large credit loan (e.g., in the realm of $2k) immediately instead of sticking to a monthly payment system, you're missing out on chances to further raise your score? Or does being able to pay off such an amount in full give you an equivalent gold star sticker? I wish this was something that didn't need asking, but my 'financial tutors' have been virtually nonexistent while growing up. D'oh!

Why can't I close out and withdraw from my 401k? Any way out?

Anonymous — Mon, 09 Jun 2008 19:02:16 -0800

I want to close out my 401k (and pay the necessary taxes) so I can pay off some debt. My 401k says I'm not allowed. Why not? Can I change anyone's mind? I have relatively minor credit card debt n. I have meager 401k savings n. (I am only 23). I would like to pay off my credit card, and be putting the money I'm currently putting toward monthly credit card payments toward more immediately accessible savings. Additionally, my company has as of last month decided to start matching 401k contributions, so I'd rather be putting matched money in than letting the $n sit there doing not much in the stock market while I continue to accrue credit card interest. However, I can't put money in until I'm not worried about paying off credit cards.

So I called my 401k people (Fidelity) to ask to take the withdrawal. They said I can't. I said, are you seriously telling me I can't have my money? And they said that since I'm still at my current company, I can't do anything with it until I'm fired or leave voluntarily. I've got a while before I'm planning on either of those. What the hell? It's my money, isn't it? We wants it :(

The other option is to take out a loan, but I'm only eligible to take out loan n/2, and paying back loan + interest plus paying off the other half of credit card debt won't really solve my problem. My goal is to wipe out the debt, be able to start contributing small (matched) amounts to retirement, and separately do a better job of keeping an accessible savings account with monthly contributions.

So, question 1: Why can't I take out my money? What's the reason behind this? And is it likely that by arguing in a different way I could get it? I'm fully aware of and willing to pay the necessary taxes if they'll just let me get at the money.

Question 2: Any other options for what I'm trying to do?

(Anonymous because I don't want this connected to the real name I use on here)

What to do after being sued by collection agency?

b_thinky — Wed, 23 Apr 2008 20:21:15 -0800

My friend was served by a collection agency. She owes the money but doesn't have it. What's she do now? I recently met a nice gal who's made some of the stupidest financial moves ever. The most pressing problem is $4000 of debt with a collection agency. She's been unable to pay for months, yet instead of calling the collection agency she's simply ignored the statements. Today they sued her for the debt + attorney's fees.

She has no money and no assets. Even if they go to court and a judgement is made against her in this amount, she'll have to get on a monthly payment plan like she is now. This isn't really worth much to the credit agency, so I'm thinking they'd be willing to drop the case as long as she acknowledges the debt is real and she starts paying again.

So where to go from here? I thought of debt consolidation, but read some articles that said those services aren't all they're cracked up to be. Plus I didn't see any of them say anything about what to do once you've actually been served. Is it a bad move to call the collection agency directly and try to work something out? Or now that she's actually been served does she pretty much have to go to court?

How to renegotiate a Debt Management Plan you can't afford?

coffee and minarets — Fri, 11 Apr 2008 19:24:11 -0800

If you're enrolled in a debt management plan through Consumer Credit Services but can no longer make your agreed upon payment, how can you get it lowered? My parents enrolled in such a program a year and a half ago because they were deeply in debt and have managed to make their very high monthly payments until now in order to be out of debt in five years. The problem is they agreed to the plan when my mother was unemployed under the assumption that she would soon get a job but she has not been able to find one despite repeated efforts. They have now run through all their savings and retirement money trying to keep up with this overambitious payment plan they made and are within a month or two of defaulting which would wipe away all the hard work they have done. They are in their sixties and in quite desperate straits. Apparently, they have gotten nowhere trying to plead their case to the people at CCS. They are paying at least $1000 more than they can afford a month and have already cut their budget to the bone so there's no hidden money there.

Any ideas on how to renegotiate such an agreement/cut through the red tape at such an organization? They need to find a way to get through to someone who actually has the power to change their monthly payments, but so far are having no luck despite calling the headquarters.

What should I do about my debt problems?

Anonymous — Tue, 18 Mar 2008 06:49:25 -0800

I am having some serious financial issues. Who, in Eastern Canada, can I talk to about this kind of thing? I had no income for two months and, as a result of that and some spending over the last few years, incurred about 8k in unsecured debt. In addition to this, I have around 14k in Student Loans. I have applied for Student Loan relief but was denied and was not given a clear reason as to why.

Debt consolidation would make sense *if* I wasn't planning on going back to full-time school in the fall. I could avoid my student loans for a while and make payments to my unsecured debt by itself if I did that. In the short term, though, I've got 190/month going to student loans and another 300/month going to the banks and I can't afford that. What can I do? I don't want to consolidate my loans if I can avoid my student loan in another 5 months. Thanks in advance.

Is the money supply contracting, or expanding?

Pastabagel — Mon, 17 Mar 2008 11:39:51 -0800

FinanceFilter: Is the money supply contracting, or expanding, after netting all the Fed action, bank closures, mortgage defaults, etc? The dollar falling seems to signal a net increase of money supply, but this is inconsistent with the thesis of a credit or liquidity crunch. If the money supply is growing at a slower rate due to tighter lending practices, shouldn't the dollar be rising, even in the face of Fed-rate cutting? Do we know the net expansion or contraction of the money supply due to the combination of rate cuts and mortgage defaults? I understand that Fed rate cuts have the effect of increasing the money supply. I understand that lower rates lower the value of the dollar, because it puts more dollars into existence tomorrow than existed today, i.e. given a constant demand, the increase of supply lowers the price.

The housing boom that peaked in 2005 involved people borrowing money to buy houses that it turns out they could not afford. This borrowing of money expanded the money supply back then. I understand that as people defaulted on their mortgages, the money supply didn't recontract (as the money that was created was spent on the house and put into the system). But as the dominoes fell, and first the mortgage companies, then regional and national banks, then CDO-holding brokerages and hedge funds were hit and stopped lending out, there should have been an attendant lack of money (from mtge payments, etc.) to lend out to future borrowers. So the money supply in the future should be smaller than we expected it to be last year. Shouldn't this cause the dollar to rise (or fall slower)?

In other words, given the 2005-2006 money supply and interest rates, the dollar had a price. But given future lending trends, the money supply growth should be slower, which other things being equal should increase the value of the dollar, right?

Is it possible that the Fed knows quantitatively the extent of the default/CDO worthlessness problem (and future money supply contraction), and isn't revealing publicly what it knows? If so, wouldn't this mean that when the Fed cuts rates, we don't hear about the amount of the money supply contraction that the Fed's inflationary move is supposed to offset, we only hear about the inflationary part of it and conclude therefrom that the money supply is growing too fast?

How do I get out of debt and get my writing back on track?

Anonymous — Sun, 02 Mar 2008 13:27:28 -0800

I just moved 4,000 miles to Washington, DC and took a job with far less salary than I am worth in a new industry for the fringe benefits. I have about $18,000 in CC debt and have a modicum of a plan but need real financial help to sort out how to pay off this debt while in the meantime making something in the mid-30's. Obviously, I should be doing a lot more than working my regular 9-5. I am an accomplished journalist, but I have literally never had to freelance. Now, I am sort of between things and realize I have nothing in the way of a signpost that advertises my work - and no portfolio to speak of. How does a person build a portfolio again from squat?

Is it worth it to start a blog and see what I come up with money wise?

Where do I get financial help? I'm not swimming in debt, but I have dreams where I watch my life sliding out from under me and I am tired of living a life I don't really have on income that's not really that. All of my purchases have been really lame, like eating out. I don't own a car or house or anything.

What financial responsibility resources are there for a young person with a job but nothing in the way of intermediate assets? (that won't come in the form of a book I've already gotten for Christmas, read, and still haven't figured out how to use.)

Student Loans and FHA Debt to Income Ratio

Dr. Zira — Wed, 27 Feb 2008 11:35:13 -0800

Does a student loan in deferment count as debt for the purposes of figuring debt to income ratios in an FHA loan? We're looking at applying for an FHA home loan. I had a lender tell me that my student loans, currently in deferment until graduation in May, then in grace period for six months after that, would be counted against my debt to income ratio now.
The lender says that in order to not have them counted against my debt to income ratio right now, I would have to provide documentation from the student loan lender that they would be deferred from one year of closing date of the mortgage. At best, I think I could only document the current deferment and subsequent grace period (six months after I graduate). As to applying for a forbearance, I don't think I can apply for that until I'm actually in repayment and even at that most lenders, apparently, only grant forbearances for 6 months at a time. It seems weird to count this as debt now, especially since my future income from my full time job which will kick in the future won't be counted.

Is this one-year deferment doc requirement a lender-specific thing or a HUD thing?
Anybody have experience doing this?

Help me find good options to help my sister get out of debt

Chuck Cheeze — Tue, 19 Feb 2008 13:02:27 -0800

My sister and her husband are in serious debt. My wife and I are going to act as their financial advisors to help them get it together. Can anyone recommend any programs/products we can look into? My wife is a financial genius and helped me get out of severe debt when we met. We need to do the same for my sister, KC. KC and her husband are totally on board and have seen the light once my wife laid all their bills out on paper for them. They are prepared to change their spending habits and work hard to get turned around. However, there are some challenges.

The tally was basically this:
- they make about $150K
- they put a lot into their corporate retirement plans pre-tax
- they have 3 car loans and a 5th wheel trailer loan that total $1800/month
- they have store and major credit cards totaling about $68K

They have about 50K put away that is liquid, of which 20K is available to use for paying off debt. The rest is untouchable for their own reasons. Unfortunately.

So the 20K will be used right away to pay off all the store cards and some of the major cards. I think the best course of action for the rest of the majors is two 25K debt consolidation loans. They already have a 2nd on their house that has basically been used monthly to cover about a $1500 monthly gap between their income and bills.

I know the best course it to liquidate the other $30K and not get one of the loans, but that money is off limits, this is their choice and its final.

So I am looking for other options, or, if you have a good source for these loans, point me to it. Their local CU can give them $25K over 4 years at 13.49%. Not bad - what else is out there?

They have good credit (~680), never missed a payment, but they just have a ton of debt. I'm looking for options here that may be better than what is above.

The catalyst for this was that KC said she was going to cash in $40K of her retirement, which would be a $27K net after penalties and taxes- but obviously that is a horrible cost and way worse than even the 20%+ rates they are paying on this debt. When I heard of this I decided it was time for help. Needless to say she has no clue where to start and was relieved that I offered.

The scenario is that they aren't selling any cars, the trailer, or touching the account with $30K in it. We have to work with this situation. I would do things differently, but since this is what we have to work with, I am looking for options given these challenges.

Debt/collection agency help: I want to pay off my $1600 debt. What is the best way to go about doing this?

Anonymous — Fri, 15 Feb 2008 15:43:31 -0800

Debt/collection agency help: I want to pay off my $1600 debt. What is the best way to go about doing this? I'm young and I've never dealt with a collection agency before. I would like to pay off my old credit card, which is now in the hands of Anchor Receivables Management. What is the best way to go about doing this? What are "pay to delete" letters? Please help. Many thanks in advance.

I want to pay off my credit card debt once and for all. Is selling mutual funds the best strategy to do this?

lolalivia — Thu, 03 Jan 2008 12:54:38 -0800

I want to pay off my credit card debt once and for all. Is selling mutual funds the best strategy to do this? I am coming to terms with my credit card debt. This means calculating my total debt and creating a realistic payment plan that works with my income as well as discontinuing the use of my credit cards and opting to use my debit card for internet purchases instead.

I have three credit cards:
I opened the account for Credit Card 1 in 2001 and have a credit limit of $12,000; I currently owe $5,100 on that card. The interest rate is currently about 7%.

I opened the account for Credit Card 2 in 2006 and have a credit limit of $5,100; I currently owe $3,300 on that card. The interest rate is currently about 12%.

I opened the account for Credit Card 3 in 2007 and have a credit limit of $5,000; I currently owe $4,300 on that card. The interest rate is currently about 13%.

Both Card 2 and Card 3 were balance transfers from Card 1. Both had 0% interest rates initially and the transfers were made in the hopes of paying off the balances while not accruing interest on the amount owed. The problem is that I kept using Card 1.

I have always paid above the minimum on time and have no negative marks on any of my three credit reports. I am not sure what my FICO score currently is, but I do know that of $22,100 in total credit offered to me, I owe $12,700.

With my current income of I can afford to pay approx. $150 each to Cards 1 and 2 and $350 to $450 to Card 3 (in the interest of paying off the card earning the highest interest first) per month. I “give” myself $50 a week in cash to spend on whatever I want but once it is gone, it is gone. I live with my boyfriend and another roommate and we split costs for rent, utilities, apartment needs (toilet paper, etc.), two cats and groceries.

I have money in mutual funds totaling approximately $16,000 currently. It was invested to pay for my college education. I have already earned my BA and am looking to go back for my MA in the fall. I am considering selling the funds to pay off my debt and then reinvesting the money that I would normally pay toward my credit cards as well as setting some aside in a high interest savings account. This could be reapplied to my college education if I need. My conclusion is that financially it is a sounder decision to pay off most or all of my credit card debt now with money that is probably earning a lower interest rate than my cards are charging. I think that paying the interest on the cards over the next couple years would equal literally throwing money away.

I would love to hear thoughts of others who are financially wiser/more experienced than me on this matter! Thank you!