| Advice for military son caught up in multiple pay-day loans |
|
|
|
|
|
ConcernedMom
New Member
Cash: $ 0.65
Posts: 3
Joined: 27 Jan 2015
Location: United States
|
| Advice for military son caught up in multiple pay-day loans |
 |
|
My son enlisted and was sent to Italy when he was 18.
While in Italy he got into the payday loan trap. Fast forward 4 years... he has been back in the US for just about a year. When he got here he stayed with me (about 45 minutes away from post). He also bought a big truck at a by-here-pay-here car lot.
He got married in Italy to a non-US citizen and after being apart for 6 months he started her paper work and flew her over here. She is not eligible to work at this time.
He has 4 payday loans ($5k, $4K, $3K, $575) with very high interest rates (two of them I believe are 80%). His truck payment is about $595 and believe he still owes about $10K on it (and is upside down on it with 18% interest).
He also has two PX accounts that he owes $960 and $749, and each come directly out of his pay at the rate of $30 each per month. He has a smart phone but his father pays that bill.
They live in military housing so their expenses are a washer and dryer (surprise, bought at Aarons rents and sells, $109 monthly) and cable/internet ($95 a month). I believe he is getting around $20,602.80 yearly based on the military pay charts on line for his rank and time in (but they are taking out $60 a month for his PX credit debt).
He recently started doing side jobs such as Gigwalk and started hauling items with his truck using services like Uship. So he is trying to make extra money. When it is all said and done he seems to clear about $100 - $150 on the weekends that he doesn't have duty.
He got in trouble for this debt because the creditors started calling his chain of command. He also got demoted from specialist back to pfc for 'poor attitude' after being counseled about his financial irresponsibility a few times.
I am not in a position to co-sign on a loan to help him consolidate (I've got a mortgage on a farm as well as a car loan). I also do not have cash to lend him without putting myself on a very slippery slope.
I suggested since they are paying for internet for him to set up an Amazon Mechanical Turk account and have his wife do that during the day since she legally can't work here until her paperwork is completed (and that will cost $1,500).
Does anyone have any suggestions? I thought about having him let the truck go... but I am afraid the legal recourse will have negative impact on his military career (ie being other than honorably discharged). I believe he needs to stay IN and finish his term and get out with an honorable discharge if at all possible. I also told him to let Aarons come and get that washer and dryer, and that for two payments we could just pay cash for used machines.
I also offered them to move back in with me... it'll be tight with 3 adults in a 900 sq ft 2 bedroom house. But I don't think having his BAH back will make up for the gas used in his truck for the 45 minute one way trip and that at least down where he is now he can do the GigWalk jobs after work (even if it is just a few per week - I kind of live out in the sticks). I also can only have them live with me for 8 months as my husband gets back from deployment then.
------------------------------------
I did some digging around on line and found that those predator pay day loans are illegal in our state (North Carolina) but I have no idea where he got the loans, what he used for his 'home' address etc.
I'm not sure what advice to give him other than to utilize his chain of command and see the free help that he has access to in the military.
When he first got back I got after him to stop buying drinks and snacks at gas stations. I also suggested he quit smoking (which I doubt is going to happen with all this stress).
I know they have nothing to sell. Literally they have their clothes, an old couch and chair I gave them, a mattress on the floor and a TV and an old computer that he took on deployment with him when he was 18.
|
Tue Jan 27, 2015 6:50 pm |
|
|
littleroc02us
Moderator
Cash: $ 384.35
Posts: 1891
Joined: 09 Feb 2009
|
|
|
|
I'd suggest to him selling the truck. I've been on a lot of military bases in my former career as a Marine and you should see the expensive vehicles military people drive. That truck is costing him $595 a month which is insane on anyone's paycheck especially when he only makes around $1,666 a month. That's pure insanity.
Have him find out the KBB private value on the truck and sell it. What he does then with the bank that owns the note is he agrees to take out a loan for the difference and makes payments on that which if the interest rate is 12% on say $8,000 for 36 months would be $265. Already he would free up $300 in his budget. Once that's paid off he'll have the full $595 back in his pocket.
What does he drive to work? A beater. For a $2,000 he could find a used Toyota camry with high milaege that still is in good condition.
Once he sells the truck then he needs to apply the $300 towards the payday loans because those interest rates are ridiculous.
Risk comes from not knowing what you're doing. (Warren Buffet)
|
|
Tue Jan 27, 2015 8:51 pm |
|
|
oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona
|
I agree, get rid of the truck. The payment is over $7000/yr. After he gets that stopped he can apply that $7000/yr to his Payday loans. The $12,000 loans can be paid in less than 2 yrs after that $7000/yr is gone.
I drove thru the Base at 29 Palms a few times, I was astonished at what those kids buy, the parking lots are full of late-model giant 4WD Dually 4 doors, diesel engines, tractors tires all around, maybe $60,000?
If he's looking at Gigwalk and got busted back to pfc, I'm guessing that he has no skills, no education? I became wealthy mostly because of my math skills - I would suggest that he take math courses on Base, do something about those skills while he is still young and still in the Service. Does he plan on staying in?
|
|
Tue Jan 27, 2015 11:12 pm |
|
|
ConcernedMom
New Member
Cash: $ 0.65
Posts: 3
Joined: 27 Jan 2015
Location: United States
|
| Thanks for the replies... |
|
|
He's doing the Uship jobs (hauling jobs with the truck and a flat bed trailer I already have) and GigWalk stuff on the weekends / evenings because it is nearly impossible to get a part time job when you may be out in the field on the weekends (he's infantry Airborne) or on GRF every few months. At least he is doing SOMETHING. And like I said I think last weekend he cleared, after fuel, about $150 bucks in two jobs (delivering a tractor and then a car). If he can average 3 weekends a month like that it's $300 in extra income. He started doping this over his one week vacation over the holidays. He'll book shipping/hauling jobs and fill in the trip with clusters of GigWalk work (usually on the return trip) that is on the route.
This type of work is also instant pay once the task / job is done.
His contract in the Army is up (provided they don't boot him out due to his financial issues) in 2016.
Prior to enlisting, during his last two years in HS he went to fire fighter school and was on the local fire department. He talks about joining the police when he gets out. Also when he was in high school he worked at his father's taxi company and maintained the cars (he's very handy with mechanics).
The truck isn't financed through a bank, it is a buy-here-pay-here car lot. The truck is not showing up on his credit. And his credit is rubbish at this point. How would he get a loan to pay off the balance on the truck once he sold it? Esp with what, 4 payday loans showing up with delinquent amounts on his credit report? Would it be better for him to turn the truck back in to the car lot? He has put some wear and tear on it (the hood latch broke and when it did the hood came off and took off the passenger side mirror and banged up the passenger side paint).
I can't remember what the KBB is (I can't remember the year and don't know the current mileage), but when we looked it up a few months back he was terribly upside down in it, from memory about $3K compared to what they are selling for locally. And NO ONE but the type of lot he bought it from will finance a vehicle over 200K miles (from what I understand) so I'm not sure WHO is going to buy it in a hurry.
I'd love any further input about the truck if this information changes the previous advice regarding it.
UGH. *sigh*
I had done some number crunching and if they moved in with me for 6-8 months (rent free but purchased their own food and personal stuff) and got his BAH back (I believe it was about $1,000 a month) and considering fuel costs are so much lower now than they were 6 months ago, he could make a big dent in some of this debt. Let the washer/dryer go back to the rent-sell store would be $100 and cutting off their cable/internet would be another $95, plus their BAH minus fuel for driving the 60 mile round trip to the base 5 days per week.
I also asked him if he could volunteer to be deployed.  (Possible interest rates decreases, you get an increase in pay and tax free pay).
|
|
Wed Jan 28, 2015 4:41 pm |
|
|
littleroc02us
Moderator
Cash: $ 384.35
Posts: 1891
Joined: 09 Feb 2009
|
First off, don't turn in the truck. Not sure about a pay lot, but a bank would sell the truck for less and then sue him for the difference. So that's a bad idea. If his credit stinks then no he won't be able to get a loan. Is there anyone in the family he could get a loan from to cover the difference of what he owes after selling the truck?
Risk comes from not knowing what you're doing. (Warren Buffet)
|
|
Thu Jan 29, 2015 2:48 pm |
|
|
CrisAdams
New Member
Cash: $ 1.00
Posts: 5
Joined: 16 Jan 2015
Location: 3503 Jack Northrop Ave Hawthorne, CA 90250 USA
|
Seek help and make a budget in order to pay off your loans. Investigate your options to repay your payday loans. See if going to a credit counseling agency will help you to pay off your loans. The agency may help you create a budget and stick to it to save money so that you can pay off your loans in a timely manner.
Pay off one payday loan at a time if you have taken out more than one loan. However, you can try to pay them all off if you have enough money.
|
|
Thu Jan 29, 2015 3:46 pm |
|
|
GardenCat
Full Member
Cash: $ 12.80
Posts: 63
Joined: 07 Dec 2014
Location: Colorado
|
A certified credit counseling agency can be found in your area from this website
www.naccc.us/
I was a ccc for a few years. These agencies have funding and do not need to charge a lot of money for their help. Beware of the "instant fix" type of credit counselors that require money up front. The certified agencies have resources to help make arrangements for affordable loan payoffs, and can sometimes negotiate the payoff amounts.
I agree, the truck payment is a disaster. Any way out of that may just be worth it...
Do not co-sign a loan with your dear son, it will eventually put you in a very compromised position.
Good luck
|
|
Thu Jan 29, 2015 6:02 pm |
|
|
Offshore-Wealth.com
Senior Member
Cash: $ 14.80
Posts: 601
Joined: 20 Jul 2005
Location: FREEDOMLAND
|
| PAYDAY LOANS are CREDIT TRAPS |
|
|
Sadly, this is a good example of how dangerous it is to take any of these payday loans. There is no such thing as a good payday loan, they all carry extremely high interest rates which most people can never pay off.
There comes a time when we all have to grow up, and sadly, most kids are totally out to lunch when it comes to budgeting. His issues will not be solved easily, but you have to start by getting all the facts, not speculation on who what or where he took out these loans. If he used SC address, then you have a case, but I doubt payday loan would have processed such a loan knowing these restrictions.
As to concerns over being discharged from service, I have never heard of a debt issue which would get in the way of an honorable discharge. There had to be more to his demotion than meets the eye for debt is not a reason to be demoted. It is illegal in most stated for any credit collection agency to call your work or neighbors, which should apply to command as well, so I would start there to get these debts covered by legal suit against any and all violations. As I have seen, you may be able to start a civil suit, or contact FTC which will go after these violations under consumer protection act.
Simply put, you need to get all the facts on the table first. If a demotion was because of collections and contacting command office, then you have a good case to sue as you will have proof of being harrassed at his place of work, which is illegal, so get educated on your consumer rights under the fair credit act. Get credit reports to see where he stands on his payment history on truck payments. If he has no missed payments, you may be able to refinance at lower interest rate. This is where I would begin to try and help your son.
Obviously, earning more money would solve all these issues, so I commend him for trying to make a little extra income with his truck. There are better ways to make a part time income, and many involve no cost, so this is where I would focus my efforts, making more money to pay off these debts which are going to only get worse given the high interest rates will not allow you to get out from under these debts. Do not risk your credit by helping him out until he learns his lesson, and this does not come easy looking at his track record of buying everything on credit, never the less high rate credit. Easy passive extra income is only solution, and having truck, he can use it as a demonstration vehicle for new nanotechnology which protects finish, plus needs next to no washing as water and dirt no longer stick to surfaces. Easy to promote at miilitary base, and costs nothing to get started. Check out Ceracoat-Global.com for free demonstration website.
Good luck,
FREE PAY IT FORWARD OPPORTUNITIES
http://ENVIROPURELIGHT.com
http://FREE100KSECRET.com
|
|
Sun Feb 01, 2015 4:06 pm |
|
|
oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona
|
quote:
Easy to promote at miilitary base, and costs nothing to get started.
Yeah - but not very ethical. There are already plenty of predators around a Base - in fact that's part of what got this kid in trouble, pay day loans, rent to own, easy credit, yada.
'nanotechnology' ? Do the advertisers even know what 'nano' means?? 
|
|
Sun Feb 01, 2015 4:20 pm |
|
|
Offshore-Wealth.com
Senior Member
Cash: $ 14.80
Posts: 601
Joined: 20 Jul 2005
Location: FREEDOMLAND
|
Working is ethical, and the only way to get out of debt I know of, other than defaulting, and then carry a bad credit score with you for seven years.
FREE PAY IT FORWARD OPPORTUNITIES
http://ENVIROPURELIGHT.com
http://FREE100KSECRET.com
|
|
Sun Feb 01, 2015 10:14 pm |
|
|
ConcernedMom
New Member
Cash: $ 0.65
Posts: 3
Joined: 27 Jan 2015
Location: United States
|
Offshorewealth - I feel like your answer is spammy since at the end you tried to pimp your wares. :-\ Sheesh.
Well here is an update. He had multiple jobs this weekend hauling/delivering vehicles so that was good. The feedback left from all the jobs he's done so far is 5 stars (I think he is using the Uship app but not entirely sure). So at least he is putting the truck to work, and he'll be able to write off some of those expenses as well. And his wife's parents decided to pay for her citizenship paperwork so she can start the process and eventually start working too. Having two and a half incomes in the house will be a plus. 
|
|
Mon Feb 02, 2015 2:05 pm |
|
|
|
