362K worth of debt , HELP!

iVillage Member
Registered: 09-30-2008
362K worth of debt , HELP!
9
Wed, 10-01-2008 - 12:06pm
I am new here and I need some help. I have over 362,000 worth of debt. Yes 362k!!!

iVillage Member
Registered: 01-25-2006
Wed, 10-01-2008 - 12:35pm

Hi there,


Sorry, I saw your post the other day and didn't have a chance to respond.


I was wondering if that $362k number includes a mortgage(s)?

iVillage Member
Registered: 11-17-2007
Wed, 10-01-2008 - 3:53pm

Welcome to the board I hope you will feel free to post some of your amounts that the ladies can look at and give you some advice on.


Like Peg said there is what they call Good Debt that is your mortgages. I am hoping that when you were adding up debt you counted that in the 362K. If I counted my two mortgages I would be around 200,000 in debt but I don't count mortgages because a mortgage is taken off of the value of a property. And the value in most cases out weighs the mortgages. Of course that was the good old days when people didn't have upside down mortgages on their homes.


But before you panic out I would list all your credit cards and car payment

iVillage Member
Registered: 09-30-2008
Thu, 10-02-2008 - 11:21am

thank you for your response. i appreciate and look forward to the conituous support.


you are both right, i have 2 homes and 4 mortgages. One of which i can pay off sooner, because it is only 2k. Minus those I have 75k in debt. However, here is the break down


Student Loans 40k


Car 20K


Credit Cards 15K


I have no debt for my businesses. I tried to start my business on my own last year and I maxed out all my cards and cashed out on my IRAs. I was determined, but it just was not the right plan. I am ready to make a change.


The good think is I have a sense of humor about this. which allows me to not stress to much. Also, I just started a new job, which I plan to keep and it pays me pretty well. I just need to unload my financial baggage.

iVillage Member
Registered: 04-10-2003
Thu, 10-02-2008 - 12:57pm

Hi and welcome to the board! Very glad to hear that a lot of the debt you have is mortgages! Thats not necessarily bad debt :)


I think you are in a great spot, you just need to get an idea where you stand. Start a spreadsheet listing all income and expenses (variable and fixed) and see where you stand. If you have money left over, you're laughing. If not, then you need to adjust.


I wasn't clear. Are you planning on keeping the business or are you switching over to the job entirely? If you are keeping it, could you use the income from the job to pay your bills and then funnel all business income to debt reduction?


I would personally tackle the CC's first, followed by the Car and then the student loans. Once you get all those paid off, then you can focus on the mortgage.


I think you just need to come up with a plan and run your personl finances like you would run business finances! Good luck to you!


Bex -


"Yesterday is history, tomorrow is a mystery, today is a gift -thats why its called the present."



Bex -

iVillage Member
Registered: 01-25-2006
Thu, 10-02-2008 - 1:06pm

Sounds good!

Avatar for mahopac
iVillage Member
Registered: 07-24-1997
Thu, 10-02-2008 - 1:07pm

There are different lines of thinking about this. There's the thought that you should pay off assets first, because by doing so, you increase the equity you have in that asset. There's the thought that you should pay off the highest interest rate debt first. There's also the thought that you should pay off what bothers you most and lets you sleep better at night.

Personally I worked on my credit card debt first, because (a) it was all stuff that had no lasting value and (b) those cards had the highest interest rates. Next, I worked on my HELOC because I wanted to be able to tap that $44K line of credit in case of dire emergency. Then the car, because I intend to keep it way past the end of the 4-year loan, and the payoff amount at this point (18 mos early) isn't much different from keeping it for the rest of the loan - about $200 - but I'm going to do it anyway so that I don't have the burden of that monthly payment.

I'm really not concerned about paying off my mortgage at all. I intend to live in my house for another 20 years at least. I have 3 kids, and in about 18 months I will make the first college tuition payment, which is going to continue for another 13 years. I am much more concerned with saving for my retirement while paying for their high school and college education. If I knew for sure that I'd be making $500K a year for the next 15 years, then I'd pay off the mortgage, but I don't have any such assurance. So rather than paying down the mortgage, I'm saving all my excess money until the kids' college is paid for and I have $1 million saved for retirement. THEN I'll pay off my house.

So you see, there are definitely different ways of looking at debt, and different priorities. You might want to do some research and talk to a financial advisor about the best way to tackle yours.

Kelly

iVillage Member
Registered: 09-30-2008
Wed, 10-08-2008 - 9:22am

Sorry it took me so long to reply. Thank you all for your messages. I appreciate it so much. I am really starting to work on this. At the beginning it is hard, because I got into more debt now then every, because of my business. So, I searched for months for a job and now that I finally have one, I have to play catch-up. Now, that I am playing catch-up I think I needed to stop telling my boyfriend what my financial issues are because he continues to through it in my face. I really need this group to help me get through. But, every day I see progress. I have started to pay my needed bills now, such as car insurance, condo, mortgage,

iVillage Member
Registered: 09-26-2006
Wed, 10-08-2008 - 1:12pm

Hi,

It sounds like you are "on it" and will be slowly fixing up your financial situation.

Is your boyfriend second guessing you on this? Does he or others feel you have frivolously thrown around your money? It may be true (I'm not saying it is) that you were not as cautious as you could have been, but is that necessarily so bad? You are not in a desperate situation here. With the proper spending principles going forward, you can lick your debt in the not-too-distant future.

To me, given that you were trying to get a business off the ground and given that you have some rental income and are likely to build equity over time in the houses, your situation is not abnormal. If anyone is questioning you, point out that you are someone who has the energy to build something, and also to change course when necessary.

Good luck with it!

Recreating Myself

iVillage Member
Registered: 10-07-2008
Wed, 10-08-2008 - 10:13pm

I was just posting on the "Voluntary Surrender" board and thought this might benefit you as well.