Your Questions About How To Pay Off Debt With No Job

Thomas asks…

So , Tea Partiers, how long would it take to pay off the National Debt if we didn’t tax the “Job Creators”?

Yes, let’s keep the Fed alive on a starvation diet of purely Middle Class taxes. Hey! Let’s tax the poor more, too, isn’t that what you want, to slash social services/welfare/unemployment/WIC/SSI?

My question is, with only 30% of the nation’s income being taxed, roughly how long would it take for this country to have a surplus again? Hint = No less than FIFTEEN THOUSAND YEARS.
@no ma’am, the article would hold a lot more weight with me if they provided a single source for those surprising statistics. Not one, Furthermore, the article does not say that Democrats consider the middle class rich.
@ Eric, oops, nobody told you? Lincoln’s administration DEFAULTED on the loans it took out to fund the Civil war.. Everything else you wrote was wild, myopic conjectures..

richmama answers:

They don’t care about anything they claim to care about. All they know is that they are anti-Obama.

They would be happy to have more debt if it was for war.

Ken asks…

Should I pull/borrow from 401K to pay off CC Debt? ?

Hello – I’m 27 and Married (my husband is 34). We own a home which currently has no equity. We have $52K in CC debt. I know exactly how we got there and we haven’t use CC in years (our CC debt started at $85 two years ago). We’ve been doing a relatively decent job of paying them off but with the recent market crash many of our CC companies have decided to hike up our APRs to 18%+ (all were below 8%). It has make it nearly impossible to pay off any principle balance lately.
Our question is, my husband has $60k+ in his 401K from a previous job (he’s now self employeed). Should we or can we pull or borrow from this to pay off our CC debt?
We have/ I have contacted all of our CC companies and received the lowest rate possible and consolidated where I could at a lower interest rate where possible. We do not want to purposely default in order to get debt consolidation. Bankruptsy is not an option.

richmama answers:

I feel your pain – essentially, you need to decide a few things here:

– If you want to default, since the debt is substantial, obviously don’t touch the 401K (this is a last-resort option, but I want to mention it up front).
– If you want to reorganize, do *not* use a debt consolidation service. Call each card company and renegotiate the rate. They’re all concerned that people will take option (a) above, so you have some bargaining power, especially if you’ve been paying off the cards reliably for a couple of years.
– If you haven’t look at cheap balance transfers, now is the time to do so. Discover and Mastercard have a few I’ve seen – you may well be declined, but it’s worth an online application.

Ok, so now onto your 401K:

– Any money you remove obviously gets the 10% penalty + taxes, which will amount to around 35%. That leaves you with $39k (roughly), which doesn’t pay off the cards.
– If it’s still worth $60k after all the recent problems, I would suggest not using this money, since it will likely recover in the next 2-3 years (if it’s equity based).
– If your APR gets increased further, or your income situation changes, then you should reassess what I’ve just said.

As an aside, I have a suspicion that the tax rules may get changed in January to accommodate emergency 401k withdrawals (ie. Removing the penalty) due to the economy. So if you can hold off until then, I would recommend doing so.

I hope this helps!

Charles asks…

How do I pay off my 11,000 debt and repair my credit score back to perfect?

Already with ACCC (American Consumer Credit Counseling);21 yr old full time student; Work full time but don’t make that much; no time for 2nd job; got into debt trying to be an adult and not moving back home with mommy; 400 dollar car note; 150 a month for braces; credit debt was originally $9,000 now its $11,000 because of late fees and interest; is debt really off of your credit report after 7 years? Need a personal loan for at least $5,000- $10,000 but one for specifically BAD credit? Where specifically can I obtain one?will they approve me? if I cant pay this debt what’ll happen after 7 years? Please no rude comments only intelligent knowledgeable ones. Thank you in advance.
thank u everyone for your answers all were insightful and helpful….but how can i sell my car if i owe my finance company? and who wants an 06 suzuki with 20,000 miles on it for 17,000 ??lol if u know let me know thanks 😀

richmama answers:

You could trade in your car for a new Kia which monthly payments are low $147.00 monthly. This eliminates the $400 current car payment.
Move in with Mom and save every penny until this credit card is paid off. Ask to talk to someone at the credit card place and ask to have the interest lowered. Make sure your payments are up to date before doing this.
Talk to all your creditors and ask for lower
payments for a year to help you out, explain your situation
to them and maybe they’ll understand.
Good Luck!!

Laura asks…

Is it really worth going into debt to pay for college?

I’m finding out that people are 40,000 or more in debt just to get a degree. I don’t understand how anyone can justify that. They say they’ll have a good paying job when they graduate and they’ll be able to pay it off, but you have other expenses other than just paying off debt, right? I mean, it must be nice to go to school and find a job that you wanted to do. I guess I don’t understand it though. I’m 20, I’ve been working since I was 16. I work two minimum wage jobs and can’t afford school, even with aid. There’s only one community college around here and it doesn’t offer anything I’m remotely interested in. So is there just no option for people like me? For people who want to go but can’t afford to and won’t go into debt?
Well, I’m sorry, but that’s just stupid.

richmama answers:

I agree that $40k+ in debt is excessive. But *some* debt might be necessary, and worth it if it’ll get you to where you want to go in life. BUT, but but… Before you consider that route, see if you can get a job now (or in the near future, as the economy recovers) for an employer who offers tuition reimbursement as one of their benefits. Ask everyone you know who is working in your area – your friends, their parents, your parents, people at church, the barista at the coffee shop – everyone if their employer offers such a benefit, and if they do, apply, and drop that person’s name as your referrer. Some, like Starbucks and UPS, offer this benefit even to their part-time employees. Others offer it to full time employees. Companies that tend to offer such benefits include hospitals, major manufacturing companies, colleges (you can often take classes at that college for free or reduced cost), the package delivery companies, McDonalds, Lowes, and other major chains.

Since you’re working min wage jobs you don’t seem to be passionate about, you may want to change it up and look at joining the National Guard or Reserves. You’d be a part-time soldier – one weekend a month, two weeks a year. They’d pay you a salary, plus pay your college tuition. Of course, you risk being deployed. But they pay your tuition.

If you live near a major body of water, you could look at the Coast Guard Reserves. Their deployments tend to be more local – they defend our coasts, they don’t go to Afghanistan. So that could be an option. The Air Force and Navy Reserves seem to deploy less than the Guard or the Army Reserves, if interested.

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