Debt Dumpers - 2016

[DisneyMandC]

So I woke up to a call from a different neighbor that a tree fell on my shed!!! Omg. The contractors still working on my house from another neighbors tree. I'm ready to move on a boat, but I'm sure I'd float into a hurricane at this rate.

omg Angee!!! I cannot believe your luck!! How did everything end up from your mold fiasco behind the dresser? I am so sorry!

 

[gracie1]

So I woke up to a call from a different neighbor that a tree fell on my shed!!! Omg. The contractors still working on my house from another neighbors tree. I'm ready to move on a boat, but I'm sure I'd float into a hurricane at this rate.

Oh no!!!! I haven't read further down - is this a tree from the same neighbors yard that fell on your house?

 

[gracie1]

Joining in! I want to pay down our cc debt (~$9k) and save for our Disney trip in November. Our cc is at 0% til June 2017. I will take $3000 from our tax return to drop it down to $6k, and our trip will cost about $6k. In my head it will all go swimmingly, but when I look at these numbers written down, it's a bit daunting. We talked about pushing the trip to January 2017, so we would have another year end bonus check and another tax return before we go, but we really want to go in Nov. So we can always use the bonus and next year's tax return to pay off the final balance on the cc. I think we finally have a good handle on our expenses, and DH is due for a raise, which will help, too. So, any extra time I get or DH gets we can put toward the plan because our monthly expenses are now covered by our income. Baby steps!

That is right - baby steps!! Plus you do have 0% till June 2017. Whatever the balance is after you dump the $3k on it just divide by the months left of 0% interest and see if you could swing that monthly.

 

[gracie1]

I am in! We need to dump debt this year. I am looking forward to working through this endeavor with all of you!!!!

Welcome!!

 

[alopez926]

Hi everyone, I'm new and had a question. Has anyone taken money from their retirement accounts to pay down their debt? I have been saddled with debt for years and I can't seem to pay it off. Every time I make a dent, something new very expensive thing happens and I wind up right back where I started. I'm a single mom and therefore I only have one income. My daughter has some special needs so between therapy and tutoring for her, I don't have a lot of extra cash. I feel like if I could just pay off my debt and start fresh. I'm desperate to be free and to stop worrying about how I'm going to pay all of my expenses each month.

Has anyone else considered liquidating retirement funds to pay off debt and start fresh? I feel like it's my only option to come out from under.

 

[Angeejoe]

Noooo!!! Did it completely crush the shed or the roof? Speaking of, how is it going with getting your house fixed from the first tree?

Oh no,I am sorry sorry this happened to you.
Sending hugs your way
Hugs Mel

omg Angee!!! I cannot believe your luck!! How did everything end up from your mold fiasco behind the dresser? I am so sorry!

Oh no!!!! I haven't read further down - is this a tree from the same neighbors yard that fell on your house?

This is different neighbor & another tree. I just don't get it. We've lived here 14 years, about 5 yrs ago in an ice storm a big branch fell in the middle of back yard, nothing hit or broken. Now to have 2 trees down in 7 months in ridiculous.

My house is still a work in progress. The plaster guy said we were all done last Monday, it looked great. Tuesday night we went into room to rip out carpet & found the ceiling was bubbling!!! So my husband called 1st thing Wednesday am & they said they'd call after Christmas. Plaster guy out tonight & said he's never seen anything like this before . They were scheduled to paint tomorrow. It never ends.... I'm loosing my mind.

On top of this my grandma has been very ill, had 2 emergency surgeries & was on a ventilator.

So I'm either at the hospital, with contractors or work. I'm exhausted & broken.

 

[Angeejoe]

Hi everyone, I'm new and had a question. Has anyone taken money from their retirement accounts to pay down their debt? I have been saddled with debt for years and I can't seem to pay it off. Every time I make a dent, something new very expensive thing happens and I wind up right back where I started. I'm a single mom and therefore I only have one income. My daughter has some special needs so between therapy and tutoring for her, I don't have a lot of extra cash. I feel like if I could just pay off my debt and start fresh. I'm desperate to be free and to stop worrying about how I'm going to pay all of my expenses each month.

Has anyone else considered liquidating retirement funds to pay off debt and start fresh? I feel like it's my only option to come out from under.

The tax penalties can be very hefty doing this. Talk to a CPA 1st.

 

[Gena001]

So I woke up to a call from a different neighbor that a tree fell on my shed!!! Omg. The contractors still working on my house from another neighbors tree. I'm ready to move on a boat, but I'm sure I'd float into a hurricane at this rate.

Oh goodness! I can't believe your tree luck! Sending you hugs! Hey, am I dreaming or was there a potential mold issue a while back?

 

[Gena001]

Hi everyone, I'm new and had a question. Has anyone taken money from their retirement accounts to pay down their debt? I have been saddled with debt for years and I can't seem to pay it off. Every time I make a dent, something new very expensive thing happens and I wind up right back where I started. I'm a single mom and therefore I only have one income. My daughter has some special needs so between therapy and tutoring for her, I don't have a lot of extra cash. I feel like if I could just pay off my debt and start fresh. I'm desperate to be free and to stop worrying about how I'm going to pay all of my expenses each month.

Has anyone else considered liquidating retirement funds to pay off debt and start fresh? I feel like it's my only option to come out from under.

Don't do it unless you have no other choice. One of DH'S friends did this and then didn't hold out enough to cover the penalty on taxes and then wound up with a monthly deduction by uncle Sam that lasted a couple years.

 

[Angeejoe]

Oh goodness! I can't believe your tree luck! Sending you hugs! Hey, am I dreaming or was there a potential mold issue a while back?

No you were not dreaming, this is my living nightmare. There was mold from the 1st tree that hit the house. That's why it's taking so long to fix my bedroom. Ugh.

 

[alopez926]

Don't do it unless you have no other choice. One of DH'S friends did this and then didn't hold out enough to cover the penalty on taxes and then wound up with a monthly deduction by uncle Sam that lasted a couple years.

Thanks. I was planning on withholding 25% federal + 10% penalty + 5% for state taxes. Sucks to lose 40% right off the bat, but I may be that desparate. I'm going to explore other options but I'm seriously considering this. I figure it will take me about 3 years to put away enough money to make up for the withdrawal, but it's going to take me a heck of a lot longer to pay off this debt, most of which is at a whopping 13% interest rate.

 

[Alice Sr.]

Thanks. I was planning on withholding 25% federal + 10% penalty + 5% for state taxes. Sucks to lose 40% right off the bat, but I may be that desparate. I'm going to explore other options but I'm seriously considering this. I figure it will take me about 3 years to put away enough money to make up for the withdrawal, but it's going to take me a heck of a lot longer to pay off this debt, most of which is at a whopping 13% interest rate.

Is this a retirement account through work? Maybe you could take a loan out against it instead. I don't think you will get dinged with the penalty if you pay it back. The other thing is the bank may close out the card or drastically reduce the limit if it's paid in full all at once, even if you have never been late. While 13% is not great there are many that are worse and if you get in a jam later the cycle could repeat with a higher rate. This happened to me in 2009. I am the last person in the world to give advise because I am here for help also, just wanted to give you a heads up to a possible untended consequence. Best of luck to you.

 

[DisneyMandC]

This is different neighbor & another tree. I just don't get it. We've lived here 14 years, about 5 yrs ago in an ice storm a big branch fell in the middle of back yard, nothing hit or broken. Now to have 2 trees down in 7 months in ridiculous.

My house is still a work in progress. The plaster guy said we were all done last Monday, it looked great. Tuesday night we went into room to rip out carpet & found the ceiling was bubbling!!! So my husband called 1st thing Wednesday am & they said they'd call after Christmas. Plaster guy out tonight & said he's never seen anything like this before . They were scheduled to paint tomorrow. It never ends.... I'm loosing my mind.

On top of this my grandma has been very ill, had 2 emergency surgeries & was on a ventilator.

So I'm either at the hospital, with contractors or work. I'm exhausted & broken.

I'm so sorry! That is just awful. I'm thinking of you and I'm sure everything will turn around soon.

 

[MrsTurnerLovesDisney]

Yay so glad I found this...I joined DIS in Nov so too late to be much with the 2015 thread...looking forward to a better 2016 and getting our budget a little more in shape.

We really don't have a lot of debt outside of about $30,000 in student loans total from both me and DH. We are making monthly payments and I'm not too worried about them this year as much as I am about getting our savings back and taking care of some minor needs.

DD who just turned 1 just got off formula and my last car note will be paid in January so that will add a total of $400 extra to our budget every month. I want to make sure we don't blow that on nonsense. I want at least $200 of that to go straight to savings. Possibly more?

The other $200 will go to pay off some dental bills I have but come May those will be paid off...I'm also getting some work done on my car next week (it's a used model) needs new brakes and something has gone wrong with the AC but we think it's just a fuse...praying none of it is too pricey. Def just need to spend less money every month.

 

[Dentam]

@Angeejoe - I'm so sorry about all of the house woes you are dealing with now! Are the neighbors with the most recent downed tree at least more considerate than the ones whose tree hit your house? Have they offered to pay for the cleanup and repairs? Less than a month until you get to cruise away from it all!! Hugs to you!

 

[Angeejoe]

I'm so sorry! That is just awful. I'm thinking of you and I'm sure everything will turn around soon.

@Angeejoe - I'm so sorry about all of the house woes you are dealing with now! Are the neighbors with the most recent downed tree at least more considerate than the ones whose tree hit your house? Have they offered to pay for the cleanup and repairs? Less than a month until you get to cruise away from it all!! Hugs to you!

Thanks you guys! I'm just really looking forward to this cruise, it's really our saving grace through all of this.

 

[DisneyMandC]

Mini rant- UGGGH student loans! I'm so fed up with them! My loan provider has been pretty good, but I had to recertify my income recently since I'm the income-based repayment plan and my income had changed significantly. So I send in the form and they move me onto the wrong plan that's $200/month more. So I called and they looked at the other plan which had the correct amount I'd determined I'd be paying. So they put me into forbearance while I could apply for that plan and told me I'd make a one time forbearance payment. Well, they don't get me the forbearance bill or the new application on time, so now I'm in forbearance until February and just got the application. Except now there are NEW repayment plans, and there's nowhere to freaking check that DH and I file our taxes separately, so it keeps asking for his income Which of course will make my monthly payment skyrocket. I finally called again and they told me just to send in proof of my income and don't put anything down about him, even though the form asks for it. I feel like I'm going to get slammed with a huge bill or something crazy down the road, but I'm just doing what they say. I did write randomly on the form in a couple places that we were married filing our taxes separately, so hopefully they'll get the message.

It's so frustrating! I want to pay my student loans, I am not trying to back out of the obligation, or even the obligation to pay the increased amount with my new income. I just want to pay the RIGHT amount based on MY income since DH and I are filing separately!

End rant.

 

[Shmily1]

Thanks. I was planning on withholding 25% federal + 10% penalty + 5% for state taxes. Sucks to lose 40% right off the bat, but I may be that desparate. I'm going to explore other options but I'm seriously considering this. I figure it will take me about 3 years to put away enough money to make up for the withdrawal, but it's going to take me a heck of a lot longer to pay off this debt, most of which is at a whopping 13% interest rate.

I have done it. It wasn't what I wanted to do but I did do it. I got a 1099 in the mail to file for my taxes but it didn't make that much of a difference on my taxes. I've also had to do a loan before on my retirement and just make payments back to the account with a small interest. That was so much better. You may want to check into it.

 

[alopez926]

Is this a retirement account through work? Maybe you could take a loan out against it instead. I don't think you will get dinged with the penalty if you pay it back. The other thing is the bank may close out the card or drastically reduce the limit if it's paid in full all at once, even if you have never been late. While 13% is not great there are many that are worse and if you get in a jam later the cycle could repeat with a higher rate. This happened to me in 2009. I am the last person in the world to give advise because I am here for help also, just wanted to give you a heads up to a possible untended consequence. Best of luck to you.

Thanks for the heads up on the limit reduction. I do want to keep one card in case of emergencies but I'd like to do away with the others. I guess I'll just need to space out my payments enough on the one card I want to keep so that they don't cut my limit too drastically. I've always paid on time so I hope they don't penalize me too badly.

Unfortunately, the account I'm thinking about using to pay down my debt is an IRA, not a current 401K, so I can't take a loan against it. My current 401K doesn't have enough of a balance for me to take a loan that would really help with my debt reduction. I could take a smaller loan from my 401K and reduce the amount I take out of my IRA. thanks for the suggestion.

 

[Jen and Ashwin]

Thanks for the heads up on the limit reduction. I do want to keep one card in case of emergencies but I'd like to do away with the others. I guess I'll just need to space out my payments enough on the one card I want to keep so that they don't cut my limit too drastically. I've always paid on time so I hope they don't penalize me too badly.

Unfortunately, the account I'm thinking about using to pay down my debt is an IRA, not a current 401K, so I can't take a loan against it. My current 401K doesn't have enough of a balance for me to take a loan that would really help with my debt reduction. I could take a smaller loan from my 401K and reduce the amount I take out of my IRA. thanks for the suggestion.

Before you raid your retirement account, I would consider other options. Using your retirement money will have a very negative impact on your later years, so you would be sacrificing a lot in the long term for a short term feeling of relief:

http://money.usnews.com/money/retir...k-withdrawal-affects-your-retirement-security

Maybe you can call your credit card and ask for a reduced interest rate or some sort of repayment plan? You could also look into a credit card to transfer the balance with 0% interest. Check out Chase Slate - it has no balance transfer fee for the first 60 days and gives you 0% for 15 months. A card like that could really help free up some money that you are currently paying towards interest. Or maybe look into a personal loan that has a lower interest rate than the credit card. I would consider all possible options before raiding your retirement.