16 replies to this topic

[vern]

I am trying to pay off my debt and eventually start a savings plan. My problem is that I don’t have a lot of credit card bebt but I do owe family/friends, pay day loans and other small business loans, NSF checks. I’m not being charged any interest on these items and would like to pay them all off. I was in the process of selling my house but at the end the sale didn’t go through so I have additional utilities that I owe plus I will have to start paying my house payment again. My problem is that I’m not sure what I should pay off first or where to start. Does anyone have any ideas? Any suggestions? Here is a breakdown of what I owe. Can anyone please help?

Credit Cards: $1,262
NSF Checks: $1,892
Family/Friends: $5,100
Loans: $1,665.00
Banks: $3,128
Medical: $645.90
Utilities: $716.37
Pay Day loans: $2,363
Old cell phone balance: $355
Canceled insurance policy balance: $134
Past due fees at gym: $337

I no longer live in the house and I'm living with family (rent free). I will have to pay my house again but no utlities (the house is up for sale again). Should I start a savings plan even if its $10.00 a week.

[Gingerly]

This is the order I would pay them off. Note the first two are in red, they are top priority to avoid bad consequences if they don't get paid first:


Pay Day loans: $2,363
NSF Checks: $1,892
Canceled insurance policy balance: $134
Past due fees at gym: $337
Old cell phone balance: $355
Medical: $645.90
Utilities: $716.37

You'll have to keep paying on these while you're paying off the first ones. Are you behind on any of these payments?

Credit Cards: $1,262
Loans: $1,665.00
Banks: $3,128

While I think the last one is very important to pay off, I think it should be last.

Family/Friends: $5,100

And yes, I think saving even the tiniest bit is always a good thing. An adequate emergency fund would be better, so you don't get sidetracked from your debt pay off plan.

[Quit Screwing Me]

I agree with Gingerly, except I'd move Utilities up to be number 4.

Also you stated that you'd "have to start paying the house payment again". That leads me to believe you hadn't paid it in a while. While you may be able to get that caught up and paid off with a sale of the home, late mortgage payments may hinder you in the future. How do you stand with your mortgage payments?

[mrhope]

and i am not here to bash but for the love of god - pay day loans are the worst thing you can do. they literally rape you. and while i agree with the payoff that ginerly states i would have to agree with quitscrewingme - move utilities up (unless its like for cable tv) but if it is for power you will have to pay it and best sooner than later as you will need power again if you ever plan on getting power through that company again. cellphone would be last on my list and i would payback friends before family.

[TxQuiltGirl]

Just out of curiosity, what is your income?

[hegemony]

are there any remaining legal issues with the NSF checks? If so, then I'd rank them over credit cards.

[CheapDB]

This is the order I would pay them off.  Note the first two are in red, they are top priority to avoid bad consequences if they don't get paid first:


Pay Day loans: $2,363
NSF Checks: $1,892
Canceled insurance policy balance: $134
Past due fees at gym: $337
Old cell phone balance: $355
Medical: $645.90
Utilities: $716.37

You'll have to keep paying on these while you're paying off the first ones.  Are you behind on any of these payments?

Credit Cards: $1,262
Loans: $1,665.00
Banks: $3,128

While I think the last one is very important to pay off, I think it should be last.

Family/Friends: $5,100

And yes, I think saving even the tiniest bit is always a good thing.  An adequate emergency fund would be better, so you don't get sidetracked from your debt pay off plan.

<{POST_SNAPBACK}>

Gingerly, just curious what kind of bad consequences can be the result of "payday loans"? Are they treated any different than unsecured debt? I know NSF can be sued in court for the amount plus some. Don't really know much about payday loans though.

[CheapDB]

I am trying to pay off my debt and eventually start a savings plan. My problem is that I don’t have a lot of credit card bebt but I do owe family/friends, pay day loans and other small business loans, NSF checks. I’m not being charged any interest on these items and would like to pay them all off. I was in the process of selling my house but at the end the sale didn’t go through so I have additional utilities that I owe plus I will have to start paying my house payment again. My problem is that I’m not sure what I should pay off first or where to start. Does anyone have any ideas? Any suggestions? Here is a breakdown of what I owe. Can anyone please help?

Credit Cards: $1,262
NSF Checks: $1,892
Family/Friends: $5,100
Loans: $1,665.00
Banks: $3,128
Medical: $645.90
Utilities: $716.37
Pay Day loans: $2,363
Old cell phone balance: $355
Canceled insurance policy balance: $134
Past due fees at gym: $337

I no longer live in the house and I'm living with family (rent free). I will have to pay my house again but no utlities (the house is up for sale again). Should I start a savings plan even if its $10.00 a week.

<{POST_SNAPBACK}>

Do you still have an income? The amount of your current income is the most important element to consider in making a payoff plan.

Also, I would say YES, you should start a Savings immediately but think of it as a Savings/Emergency/Occasional Expenses Fund. That will help prevent you from going deeper in the hole and manage your future cash-flow problems easier. $10/week is fine if that's what you can afford, but you also have to consider setting aside additional money in this fund on a weekly or monthly basis to cover occasional expenses that will pop up during the rest of the year. Whatever the amount, treat it like a bill that needs to be paid just like the ones you listed.

[vern]

Thank-you for all of your ideas and suggestions. I hope I answer all of your questions:

Gingerly asked: Am I behind on any payments on my credit cards, loans and banks? No I am not behind on any of these because I know they can have a major affect on my credit. I’m trying to raise my credit scores and don’t want any late payments reported.

Quit Screwing Me asked: How do you stand with your mortgage payments? I am behind 2 payments because the house was in the process to be sold. My mortgage company is working with me to catch up because of what happened I’m dividing the payments over 12 months but I hope it sells within the next month

TxQuiltGirl asked: What is my income? I bring home $2,600 a month after taxes and my husband brings in $1,770 a month after taxes.

Hegemony asked: If there are any remaining legal issues with the NSF checks? No there is not any legal issues with these checks.

My other bills consist of
Car paymenst (mine & DH)& insurance: 1,000month
Cell phone: 100 month

thats all I pay since I'm living with family rent-free

I just wasn't sure what I should start paying off first and how much I should be saving.

Edited by vern, 17 February 2005 - 09:13 AM.

[idtheftvictim]

First things first....

Do you have a written budget in place, and if you do, then how much money do you have left over AFTER you pay the minimums on everything?

What you would do is use the left over money to pay of the smallest amounts first, and work your way up....Payday loans and NSF I would try to pay off ASAP though. But from there, take your smallest amount owed, and pay it off, then move to the next largest.

Maybe if you feel comfortable enough, you could post your budget, and let us take a stab at it...maybe you could cut some FAT in your budget to start getting this stuff paid off even faster...

[CheapDB]

Thank-you for all of your ideas and suggestions. I hope I answer all of your questions:

Gingerly asked: Am I behind on any payments on my credit cards, loans and banks? No I am not behind on any of these because I know they can have a major affect on my credit. I’m trying to raise my credit scores and don’t want any late payments reported.

Quit Screwing Me asked: How do you stand with your mortgage payments? I am behind 2 payments because the house was in the process to be sold. My mortgage company is working with me to catch up because of what happened I’m dividing the payments over 12 months but I hope it sells within the next month

TxQuiltGirl asked: What is my income? I bring home $2,600 a month after taxes and my husband brings in $1,770 a month after taxes.

Hegemony asked: If there are any remaining legal issues with the NSF checks? No there is not any legal issues with these checks.

My other bills consist of
Car paymenst (mine & DH)& insurance: 1,000month
Cell phone: 100 month

thats all I pay since I'm living with family rent-free 

I just wasn't sure what I should start paying off first and how much I should be saving.

<{POST_SNAPBACK}>

I guess the good thing is $3,270.00/mo. after your auto and cell phone expenses is a lot of disposable income. What you need to answer is where is it all going? I would recommend seeing a conselor at a not-for-profit credit counseling agency to help set you up on a budget considering all the variables in your situation.

You say you are trying to raise your credit score, but your mortgage situation is probably damaging it more than you may think - I would catch up on that ASAP. I'm sure they are reporting a negative entry on your report for each month you still owe a portion of your past due balance. Also, if you can, pay the small stuff ASAP as well - past due utilities, gym fees, medical expenses, and cell phones will probably be reported to the credit bureaus immediately once they enter collections. Some companies report them sooner.

[DallasLoanGuy]

look in to debt stacking.

it disregards the 'pay the highest interest rate' strategy.

if you are trying to pay down debt on several cards... it is the best system

[Ian's Mom]

look for the SNOWBALL FIGHT ANYONE thread-

there is a GREAT excel spread sheet that helps you pay off debt.
I swear by zilchworks but now I am using both as a guide.

You are going to find that it is FUN paying off debt...tracking it and finding the best scenerios to pay off quicker. Someone on an earlier thread said she wrote her amount of debt on her calendar (it looked like a phone number) and she would change the number as she made payments.

I started doing this last month too ( luckily my debt is not large enough to look like a phone number) I just totalled my balances today and was amazed to see that I dropped my number by $579 in Feburary. I can't wait for next month cuz I will be putting every availabe cent towards payoff.

[Ian's Mom]

Here you go!

http://creditboards....showtopic=76419

[madflower]

look in to debt stacking.

it disregards the 'pay the highest interest rate' strategy.

How does debt stacking disregard "pay the highest interest rate" strategy?

It is the same strategy really.

Basically you budget 600 bucks for 3 bills, say like:
apr minimum payment
bill #1 23.9% 70
bill #2 18.6% 110
bill #3 5.2 300
-------
480

You pay the 480 for the minimum payments, then take the extra 120 and tack it to the highest interest rate. That isn't really different then paying off the highest one first.

The difference is really that you keep the 600 bucks in your budget to pay off bills, so month 2
might look like:
apr minimum payment
bill #1 23.9% 65
bill #2 18.6% 105
bill #3 5.2 295
-------
465

You pay the 465 for the minimum payments, then take the extra 135 and apply it towards the highest balance.


Once you paid off bill #1, You keep the 600 in your budget.
Month 12 might look more like:
apr minimum payment
bill #1 23.9% 0 (paid off)
bill #2 18.6% 85
bill #3 5.2 240
-------
325

So you apply 325 to the minimum payments, and then apply the 275 to the highest rate card.

Same crap, same story.

[hegemony]

if you "stack" based on size of debt and not on APR you will pay more in the long run.

[radi8]

Gingerly, just curious what kind of bad consequences can be the result of "payday loans"?  Are they treated any different than unsecured debt?  I know NSF can be sued in court for the amount plus some.  Don't really know much about payday loans though.

<{POST_SNAPBACK}>

Payday lenders threaten to deposit the check, then go after you for writing a hot one, lol.
Problem is, it's a post-dated check, which rarely can be prosecuted.
Post-dated checks are written with the presumption that there isn't available money in the account, therefore there was no intent to deceive when they were issued.

Payday lenders can get nasty pretty fast though. And, since they have access to your bank account- you'll find they aren't shy about attempting withdrawals. The bank fees alone can become pretty steep should they go on a withdrawal spree when the funds aren't there.
A stop payment order can be a great way to use $20....



If they are still charging you biweekly fees, wipe those loans out first.
They are undoubtedly the highest interest rates you will ever pay for anything.