Hello,
My father and his wife have accrued $26,000 in credit card debt. Their
combined minimum payments on all three credit cards is approximately
$750 per month. They live in a mobile home that they own out right
worth about $70,000 (they don't own the land, of course). They have an
investment account that has about $19,000 in it. Two retirment
accounts worth about $20,000 total. They are both retired and get a
combined $2,000 a month from SSI.
My question is this: What would be the best way to lower the interest
payment they have on their debt per month. i.e. personal loan, secured
loan using the mobile home as collateral, etc. Debt consolidation?
Any insight would be greatly appreciated. |
Request for Question Clarification by
sublime1-ga
on
08 Nov 2006 22:49 PST
dbomb...
If I was in their shoes, I would, if possible, liquidate
the investment account and withdraw from the retirement
accounts as needed to pay off the credit card debt in its
entirety. That produces an immediate additional $750 per
month in income which can be reinvested, and completely
removes the exorbitant interest they must now be paying
on the credit accounts.
Let me know if this satisfies your interests, or if you
have any questions...
sublime1-ga
|
Clarification of Question by
dbomb-ga
on
09 Nov 2006 10:12 PST
Thank you for the comments. I greatly appreciate them.
I should have mentioned that they would like to keep the investment
and retirment accounts intact, if possible. And their monthly income
is now stretched very thin. Perhaps they could use the mobile home as
collateral on a loan?
Anyway, thanks again for the comments so far.
-Dbomb
|
Request for Question Clarification by
sublime1-ga
on
09 Nov 2006 10:30 PST
The problem with consolidation or any ongoing loan is that
they'll still be paying a lot of money in interest on a
monthly basis. Paying off the loan leaves them with a
positive cash flow that, if saved, would give them their
original $26,000 back in less than 3 years!
Another option might be a reverse mortgage on the trailer,
though I'm not sure that trailers qualify for this type of
loan. The borrower must also be 62 years of age:
http://financialfreedom.com/ReverseMortgageProducts/
sublime1-ga
|
Clarification of Question by
dbomb-ga
on
09 Nov 2006 17:51 PST
sublime1,
Thank you for the link you sent. You were right to think that trailers
don't qualify for reverse mortgages (at least with that company). I'm
starting to find out that it's hard to find a secured loan using a
trailer as collateral. A personal (unsecured) loan would be no good
because of the high interest (like you had already stated). What you
said about liquidating the investment and retirment accounts and using
that to get out of debt is the most sensible course of action. I just
wish I could get them to do it! I appreciate what you have done and
you have my thanks. Oh, btw, the name 'sublime'...for the band or are
you yourself sublime?
Thanks again,
Dbomb
|
Request for Question Clarification by
sublime1-ga
on
09 Nov 2006 23:16 PST
Dbomb
Some years ago, I took a course in human potential called AvatarŪ.
You can learn more about it here:
http://www.avatarepc.com/
AvatarŪ is actually the source of my nickname. During an ineffable
experience which occurred when I took the course, only one word
came to my mind - sublime. I later looked it up and realized that
the chemical definition refers to a transition from a solid to a
gas without the intervening liquid state. This turned out to be a
perfect metaphor for what I had experienced - a transition between
physical and spiritual without the intervening states of emotional
and mental.
I've wanted to keep the word in the forefront of my awareness ever
since.
So, just to be clear, is your appreciation sufficient that you
want me to post a formal answer and collect the fee? Please
don't feel pressured to accept this suggestion, but I can't
help but express my curiosity...
sublime1-ga
|
Clarification of Question by
dbomb-ga
on
13 Nov 2006 11:19 PST
Sublime1,
Once again, thank you for all you have done. I have actually found
some lending institutions that are willing to give a secured loan
against the mobile home. My dad's payments will drop from about $750
per month to about $274 per month. And the best part is that dad will
get to keep his investment account. I consider this questioin closed.
Another happy ending.
Dbomb
|
Request for Question Clarification by
sublime1-ga
on
13 Nov 2006 15:11 PST
Dbomb...
If I'm understanding you correctly, and you want to close the
question without being charged, you can use skermit-ga's guide
for doing so:
http://www.christopherwu.net/google_answers/answer_guide.html#how_close
By thus closing the question, you'll only be charged the 50 cent
fee for posting the question, and it will preclude the possibility
of an answer being posted and your credit card being charged for
the full amount of the question fee.
If I've misunderstood you, let me know...
sublime1-ga
|
