Home     Forum     401k     401k Rollovers
    Register   Login   Members   Search   FAQs     Recent Posts    




In Debt - Pull out IRA or File Bankruptcy

Reply to topic
Money Talk > Personal Finance

Author Thread
lmba227
New Member


Cash: $ 1.05

Posts: 5
Joined: 12 Mar 2015
Location: Albany
In Debt - Pull out IRA or File Bankruptcy  Reply with quote  

I will start off by saying that we recently relocated out of state because my husband lost his job. He is on commission and bringing home between $500-$900/week.

We currently have $65K in CC and a loan from a small business. 3 CC are 0% interest and the 2 business cards are 14-18% interest.

I currently and looking for a job. We are barely making it on his weekly salary and we are current on all bills. We do not have any additional money to pay on the debt at this time with his unknowingly pay and me not being able to find a job.

I have $50K in my retirement. Should I cash it out and pay off most of the debt and roll the others onto the 0% interest card? I am sure I will find employment in the next 90 days and then start back with the snowball to pay off the remainder and start back building up retirement?

The other resort is file bankruptcy, because in the next 30 days there will be something that we cannot pay.

Thanks for the advice,

Leigha
Post Thu Mar 12, 2015 1:52 pm
 View user's profile Send private message
littleroc02us
Moderator


Cash: $ 380.45

Posts: 1872
Joined: 09 Feb 2009

 Reply with quote  

Sorry to hear you've lost your jobs and relocated. I got laid off myself twice, once in 2001 and 2004. Not fun when you have school loans and cc's. What it taught me is that debt is dumb and life happens. I got 3 jobs and tore up my credit cards. It took me 5 years, but I got rid of all of my debt.
Personally I wouldn't take out retirement, except as a last resort to avoid bankruptcy. Let's say you take out the 50k and between the two of you, you make 50k for the year. You'll have an immediate 10% taken out for taxes by the federal government. Then you have another 25% taken out for taxes. So that's a total of 35%, which is almost 20k of the 50k in taxes.

As for bankruptcy, to me that's a last resort. It stays on your record for almost 8 years and a lot of forms that you fill out to borrow money will ask if you've declared bankruptcy. So it's a red mark on your record for life.

So do you have any assets you can sell, like cars, trucks, bikes or motorcycles? Something you can sell for cash or that's requiring monthly payments. I'm just trying to see where your money is going each month. Wouldn't it be great if you had an asset or something that your paying on each month that you could get rid of to free up cash.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Thu Mar 12, 2015 2:17 pm
 View user's profile Send private message
lmba227
New Member


Cash: $ 1.05

Posts: 5
Joined: 12 Mar 2015
Location: Albany
 Reply with quote  

Thanks. It is hard.

As far as assets. We own two homes that are currently rented. About 4 months ago I traded in my explorer and got a smaller car. We are a ONE care family now. We do own 6 vending machines that we are in the process of selling. That is pretty much it. I have tried to dwindle down as far as I could......
Post Thu Mar 12, 2015 2:27 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 716.00

Posts: 3482
Joined: 21 May 2006
Location: arizona
 Reply with quote  

What state are you in now - ie, did you move away from Albany? Or 'to' Albany?

How about selling the two rental houses? Any equity in them?
Post Thu Mar 12, 2015 3:18 pm
 View user's profile Send private message
lmba227
New Member


Cash: $ 1.05

Posts: 5
Joined: 12 Mar 2015
Location: Albany
 Reply with quote  

Moved from Albany to Asheville.

One is under a lease purchase, hopefully that will sale after lease or during. We will hopefully make 10k off this one. The other has some equity, but would not help my 30 - 60 day crunch.
Post Thu Mar 12, 2015 3:26 pm
 View user's profile Send private message
littleroc02us
Moderator


Cash: $ 380.45

Posts: 1872
Joined: 09 Feb 2009

 Reply with quote  

Now knowing that you have two rental properties, why haven't you tried to sell them? Is there equity in them? Owning rental properties when your broke is a good way to end up more broke.

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Thu Mar 12, 2015 3:30 pm
 View user's profile Send private message
littleroc02us
Moderator


Cash: $ 380.45

Posts: 1872
Joined: 09 Feb 2009

 Reply with quote  

quote:
Originally posted by lmba227
Moved from Albany to Asheville.

One is under a lease purchase, hopefully that will sale after lease or during. We will hopefully make 10k off this one. The other has some equity, but would not help my 30 - 60 day crunch.


I totally disagree. Owning rental property comes with expenses and right now your in crisis mode and don't have any money. Sell!

Risk comes from not knowing what you're doing. (Warren Buffet)
Post Thu Mar 12, 2015 3:32 pm
 View user's profile Send private message
lmba227
New Member


Cash: $ 1.05

Posts: 5
Joined: 12 Mar 2015
Location: Albany
 Reply with quote  

Tried selling one before we moved and didn't have any luck. That is why it is rented. My husband relocated in December and we followed in February.
Post Thu Mar 12, 2015 3:35 pm
 View user's profile Send private message
lmba227
New Member


Cash: $ 1.05

Posts: 5
Joined: 12 Mar 2015
Location: Albany
 Reply with quote  

Understand. I will work on that.
Post Thu Mar 12, 2015 3:41 pm
 View user's profile Send private message
oldguy
Senior Member


Cash: $ 716.00

Posts: 3482
Joined: 21 May 2006
Location: arizona
 Reply with quote  

The usual reason that a house sells slow is 'price', adjust the price to fit the market to get an expedient sale. (It is expensive to carry a house, sell them soon).

I looked at Ashville jobs, they seem to have 2 large employers - both are advertising for workers. Hospitals & Truckers. When I was in college I drove an 18-wheeler, it pays well and you can often get lots of hours, sometimes close to 70 hrs/wk and the OT pay is at time & a half. Your DH might consider driving a truck for awhile, way better than $500/wk commissioned sales.
Post Thu Mar 12, 2015 4:06 pm
 View user's profile Send private message

Reply to topic
Forum Jump:
Jump to:  
  Display posts from previous:      





Money Talk © 2003-2016