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Hello, I have create a situation for my self that my monthly expenses exceed my monthly income so I been missing payments to my credit cards. I was thinking of cashing out one of my mutual funds and pay off two of my cards to reduce my monthly overhead, Best buy has offered me a settlement offer where I would pay them half of my total statement within 90 days and they would charge off the rest, but they would still show on my credit that this was paid but not all of it. And I still have to reach out to chase to see what options I have with them. My question is, is this a good idea right now I am way behind on the payments and killing my credit but not sure what is my best options. Any suggestions or recommendation? Also I own my home so I didn't want to so a bankruptcy.

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Posted (edited)

How adequate is your emergency fund after you sell the mutual funds?

 

How long have you held them?  Will you realize a profit on the sale?

 

What have you done to reduce your other monthly expenses?  Have you taken a second job?  

 

 

Edited by cv91915

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Beyond what CV points out, have you looked at the tax liability that will come with the cashing in of mutual funds and other such assets?

 

Quite honestly, if you are going to be in a position where your credit is still trashed by a charge-off and other derogatory notations, you MAY be in a position to pursue other options that don't require lump sums and tax consequences.  I am not one to suggest simply walking away from amounts owed, but I can tell you that people in jurisdictions that don't have a lot of options post-judgment like wage garnishment and bank levy processes are sometimes able to just play whack-a-mole with the third-party entities and never get sued. 

 

You will find better guidance here if you can provide a rough estimate of expenses and the amounts at issue...you may find that options exist using FDIC Rule 5000 which would then allow you to get current AND keep the account open, with negative information being deleted.  However, without knowing the precise depths of the situation, nobody can say for sure whether that is a viable option...

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