# Badly In Debt - I Need Advice



## Solo (Jan 19, 2017)

This may be lengthy but I will try to make it as short and to the point as best as possible. I ended up getting myself in debt after two years of medical issues, everyday bills (rent, car loan utilities etc.) and credit card expenses. I am 61.5 years old, married both of us working fulltime(with me in threat of layoffs) & a 15 year old son.
My debt is Credit Card $15,000.00
Medical Bills – 10,300 (high deductible $12,100, company offered health plan)
I currently have the following:
Company 401K - $450,000 (I am capable of taking a loan on this to repaid back to me with a 4.5% interest)
Brokerage Retirement Plan with JP Morgan - $42,000
HSA (Credit Card) Balance of $1,500.00
Wife and My Net Salary per week $1,015 or $4,060 per month
Total Expenses - $3,000 per month
I want to pay off all my debts at once but I want to do it that obviously would be beneficial to myself. 
Sorry to reach out, but unfortunately and obviously I am not very good at this and am praying for help.


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## Butterfly (Jan 19, 2017)

I'm just a lay person, but my first advice would be to immediately quit using those credit cards.  And get them paid off as quickly as you can, even if it hurts!  The interest rate on most credit cards will choke a horse and if you get behind you will never catch up.  I was left by my husband with one huge credit card debt I was previously unaware of, and I was able to negotiate it down by offering the bank 70% of the balance in cash in full settlement of the debt; then I borrowed against my home equity line of credit at about 15% lower interest rate (I think I paid about 3%) and paid off the reduced credit card balance with that money.  It took me several years, and I paid more than I had to every month and I really struggled, but I got the equity line paid off.  The one dirty little secret in doing that is the forgiving bank will send you a 1099 (or whatever form # it is) that declares the amount forgiven as income to you, and you have to pay taxes on that.  But I saved a LOT of money by doing it that way.

I don't know anything about borrowing against retirement funds -- you need expert professional advice on that, I think. 

But my personal opinion is that the best thing you can do for your financial health is NOT to use credit cards to pay for anything that you can't pay off right when the bill comes due, unless is it a true emergency and that's the only way you can save life or limb or the roof over your head.  Otherwise, do without a new TV or clothes, or whatever else.  I still use credit cards, but only as a convenience and pay them off every month.   I had to break that rule once, when a plumbing line broke under my house ($$$), but I paid that off in three months -- didn't do much of anything else that three months, but I got that sucker paid off.


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## QuickSilver (Jan 20, 2017)

Also, have you considered a debt consolidation loan or a home equity loan to pay of those high interest credit cards and other bills.?


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## Aunt Bea (Jan 20, 2017)

If I'm reading this correctly you have about $25,000.00 in debt and $1,000.00/month above and beyond your expenses.  I would just take my time and grind out the payments on the two debts as fast as I could.  I would also use any scraps of money from things like tax refunds, gifts, sale of surplus items on Ebay or Craigslist to pay down the debt.  What I would absolutely not do is borrow against my retirement accounts in an effort to pay an unsecured debt.

Good luck!


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## nvtribefan (Jan 20, 2017)

1.  Stop using the credit cards.
2.  Take the $1060/month you say you don't need for expenses and pay down your debt.
3.  Don't touch your retirement savings.


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## Peanut (Jan 22, 2017)

Hi Solo, have you tried a no interest credit card? what you'd be doing is apply for a credit card that offers no interest over a 12 to 18 month period. transfer all your other credit bills over to that then start paying that off straight away that way youll be paying off the principal over that 12 to 18 month period with out having to pay any interest. if that makes any sense?


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## Marie5656 (Jan 22, 2017)

*Maybe it is the skeptic in me, but I am curious about the motivation behind this post.  This was the OP's first post, no introduction.  And the OP has not been back at all since posting it, even to view responses.*


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## Falcon (Jan 22, 2017)

Yeah Marie, I noticed that also.  No profile posted.  I never take the time to even respond to people like that.

All they want is free information but never give any.


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## ronaldj (Jan 22, 2017)

find and listen to Dave Ramsey, pay off little debt first and don't touch retirement saving.


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## OneEyedDiva (Jan 23, 2017)

Stop using your cards. Put most of that $1,000 toward the highest interest rate card so you can get that one paid off first. Whatever you do DO NOT borrow from your 401K and DO NOT use those so called debt consolidation companies or paycheck loans. Taking a loan from your 401K may cost you more in the long run, especially if you get laid off and can't pay the loan back as intended. I believe you can take money from your brokerage IRA account without penalty since you are past 59-1/2. If it's a Roth, of course you won't have to pay taxes on what you take out or if you are taking distributions at a capital loss, that won't negatively impact your taxes either. Since you do have considerable assets, it may or may not be possible to negotiate your medical bill payments but it's worth a try to find out. Good luck!


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