163

Can I be debt free or should I file bankruptcy There's no reason to file bankruptcy with $64k in debt and a $80K net salary. You can get out of debt in 1-2 years if you're willing to sacrifice. The harder you sacrifice, the less time it will take. Please advise me how to reduce my debt. Stop creating any more debt. Cut up all credit cards Put $1,000-2,...


121

You need to change the way you think. First, understand compounding. Not just intellectually, but viscerally. You need to develop an aversion to spending borrowed money. A debt with 22% APR doubles every 38 months. Every dollar you pay down your debt, cuts the total length of time you will be paying that horrible interest. Every $1 you spend now ...


53

My income is 78K to 80K after taxes and insurance. I pay $1,500 for rent+utilities, $150 for phone bill, $450 for auto loan, $300 for auto insurance (for two people; I am helping a friend who can't pay auto insurance), $750 for a personal loan and $750 to $1,000 for credit card. I also need to send $100 to $200 to my home country. Total monthly expenses ...


25

One thing that I don't see addressed in the other answers is this: I am helping a friend who can't pay auto insurance You MUST stop this. While I understand, and applaud, the desire to help a friend, you are not in a financial position to do this. An analogy is a toddler who wants to help carry in the groceries and tries to carry in a gallon container ...


12

The tropes that got you here There's a core pattern of thinking that drove you here. It is a well known trope, and it has already made you a debt slave. Now, whilst in the middle of it, you must realize what happened and make course corrections. Otherwise this will be your life. Indeed, bankruptcy is the next step in the ever repeating cycle, so the ...


11

As part of the loan approval process your friend will have to prove at two different times that they have a plan for the down payment, and they will have to show bank account statements to prove it. They will have to do this when they apply, and just before the settlement date. If they have a large sum of money being transferred into their bank account, ...


10

You are contemplating leverage In finance, leverage is borrowing money for investment, with the expectation (goal) of gaining higher gains than the cost of borrowing so that you end up with a net profit. This is the same principle behind margin accounts, where money is borrowed to hold an equity position you don't have the cash to cover on your own. It is ...


8

Its not likely for these reasons: You currently don't have an income. How can you payback a loan if you have no income? There is no collateral. In the event you do not pay, nothing of value could be used to stand for part of all of the loan. There is no stated purpose of the loan. Lets say someone does loan you some money and then you use all of it to ...


6

Traditionally a bank makes money by lending out money. Their source of these funds is the deposits people make into the bank. There are risks with this business model. Some borrowers might not pay it back. The economy (local, national, or world) may collapse and significant number of borrowers may not pay back what they owe. The bad economy may also cause ...


5

Pay off all debts right now and have my net worth reduced to my emergency fund (~5k€) Paying off debt does not reduce your net worth - your net worth is all of your assets less what you owe, so it is a wash from a net worth standpoint. Also note that "dividend aristocrats" are not necessarily "safe" from a wealth standpoint. The value of a stock goes ...


4

Anything you borrow for that down payment will hurt your ability to get the loan package you need. The lender doesn't want to see the borrower getting a loan for the down payment. They don't want to see a signature loan; they don't want to see a cash advance from your credit card; they don't want to see a loan from your 401K; then don't want to see a loan ...


4

One is not always better than the other. I refinanced in the last few years, and I shopped around with different brokers (online and local) and banks. I found both brokers and banks that were very sketchy in regard to their fees, which was the main differentiating point (rates were more or less the same between them). There should be no risk in general of ...


4

Adding to the other answers...often are the small things that count and accrue costs. Having several bank accounts+CCs, especially with them charging maintenance on top of the costs because of being empty? Close all of them. Unless you want to diversify where you store substantial savings you do not need accounts in more than two banks. Having small vices,...


3

My question is, assuming that I am able to verify that all the information I provided on my application was correct, in general, can decisions like being turned down for a loan be reversed, or would I have to reapply once they clarify what could not be verified? That is a question only the lender can answer. If their issue is fixable, then I have had ...


3

You've asked (or implied) a lot of semi-related questions about how your finances will impact your loan costs. In order to answer them, it may help to step back and consider the bigger picture about mortgage decision making. Banks generally want to know four things when it comes to approving a mortgage loan: Is the property good collateral? A mortgage is a ...


3

Does this scheme of securing a loan on the proceeds of a secured loan make sense at all or did he make something up Essentially he is saying that he has money and there isn't much risk for you. Getting the secured loan to start up assigned to you can be done... There is legal paper work that needs to be done. It still doesn't mean your risk is zero. ...


3

I don't know where you live in the USA; but when I lived in Toronto (which is NOT one the cheapest places to live in Canada) about 5-10 years ago, I found an apartment for about $750/month (rent and central heating included). It wasn't a popular neighbourhood -- an old and relatively cheap building near the edge of town -- the nicest one I could find in that ...


3

D Stanley has some good advice. I would only say: Don't sell the car unless/until you've very carefully explored all the pros and cons: net financial gain, total cost of an alternative vehicle or alternative transportation. You could end up worse off, or the gain may be too little to be meaningful. No need to destroy the credit cards, but hide away all but ...


3

However, since opening this interest-free credit account, I noticed that my credit score has decreased from "excellent" to "moderate/good". This is the only change in financial circumstance, and I'm sure it can not be caused by anything else. All other payments (credit card, mortgage) are up to date. Taking the above statement as true. How ...


3

As you have surely realized 10% amounts to less income as the principal remaining on the loan is paid back reducing the lender's overall income. But, you must keep in mind that non-payment is a possibility. Notwithstanding your friend's reliability this friend may get hit by a bus. Generally, you would want to seek a lien on some piece of property for the ...


3

You’ve only known this individual for 5 years. I understand that it’s a friend and I’m sure it’s a relationship you care about. But, speaking from experience, (and forgive my frankness) there is absolutely no upside to loaning money to a friend. 10% interest is not worth putting unnecessary stress both on you personally and on the relationship. If you are ...


2

You made a guess that you owe $5,000, and your ex-friend made a guess that you owe $10,000. It's quite obvious that you are both guessing. I assume you both want that you pay the correct amount. I suggest you find a trusted person who is good at using a spreadsheet. Then you start doing the numbers. You have a judgment that says you owe (some exact number ...


2

There is a very good subject of fully reserved banking. But a full-reserve bank doesn't need overnight government loans or might not qualify for government banking loans on their reserves. What would the government banking loans be for if the reserves are liquid ? And if the full-reserve bank doesn't get government banking loans then it could just be a ...


2

Expect that when they see your credit history they will want to know why you took out and paid off a small personal loan. The fact you have to explain it shouldn't hurt your application, but you should expect to have to provide in writing an explanation. The addition of the loan if it adds a different type of loan to your credit history can be a good thing. ...


2

Private Loans both Owe and Owed. In my personal finance spreadsheets, I like to separate Loans (money that I've already borrowed) from Liabilities (money that I'm going to owe some time in the foreseeable future, like annual taxes, semiannual insurance payments, etc), even though that isn't the textbook accurate definition of Liabilities.


2

In formal bookkeeping, liabilities is an obligation arising from a past business event and which has not yet been settled. Liabilities is the opposite of assets, which are the resources of the company that have been acquired through transactions, and [which] have future economic value that can be measured and expressed in [some currency]. An example of a ...


2

Sending as gifts I found a clear statement that you do in fact owe gift tax for gifts made to foreign people (foreign from the perspective of the United States government). There is a $15,000 gift tax exclusion per person per year in 2019. That would be per parent, so you could send $30,000. If you are married, you and your spouse could each send that ...


2

You ask: Any thoughts on how risky such a loan would be? The simple answer is that it is riskier than whatever you invest in. Other answers have addressed the possibility that the value of your investment drops. There are other risks, including: not being able to pay an interest instalment at some point an unexpected call on capital a margin call not ...


2

You are looking for something similar to loans when there is a structured settlement. This is generally done when a person is receiving payments spread over many years, but they want to receive the money now instead of a monthly or annual check for many years to come. Your situation is different because your payout next year isn't 100% guaranteed. That ...


1

After looking through a couple of financial planning apps, I finally settled with Money Lover. When making an entry in the Money Lover app, all of these are placed under the Debt & Loan category. That broad category then has Debt, Debt Collection, Loan and (loan) Repayment. Now if you want to view monies that you owe or that are owed to you, there is a ...


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