posted
I'm in quite the dilemma, really need input from others.
I'm a single mom 2 children, one has lyme. I'm self employed and find medical expenses are absolutely killing me. We do have insurance with high deductibles that cost me $650.00 per month.
I have quite a bit of debt and don't know how to get out of this mess. I have some retirement accounts worth about $120,000.00. My current debt with medical bills/credit cards is about 15k.
Is it best to try, pay off the credit cards with high interest and keep making payments on the medical bills that have zero interest?
How do others survive financially with such a costly illness?
Posts: 911 | Registered: Mar 2005
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groovy2
Frequent Contributor (1K+ posts)
Member # 6304
posted
Hi Tick
Yes pay off the credit cards -
You Should Pay off ALL of your credit cards-
watch this PBS program about credit cards and you will know why to pay off your cards-Jay-
posted
Jay so your saying I should take money out of my retirement to do this? This is the only way I can get out of debt.
Unfortunately my ex owes me thousands on back child support.
Posts: 911 | Registered: Mar 2005
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lymednva
Frequent Contributor (1K+ posts)
Member # 9098
posted
Do you know where you ex is? If so you should be able to get the back child support taken from his wages.
For me, it would be worth a consult with my divorce attorney to get this straightened out. I know, it's adding another bill, but it could be worth a lot more than what you pay for the attorney.
Good luck!
-------------------- Lymednva Posts: 2407 | From over the river and through the woods | Registered: Apr 2006
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posted
My ex works under the table so nothing is traceable. He has nothing to do with his children regardless, he should be paying I agree. We've already tried that route.
Posts: 911 | Registered: Mar 2005
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bettyg
Unregistered
posted
quote:Originally posted by tickalert:
Jay so your saying I should take money out of my retirement to do this? This is the only way I can get out of debt.
Unfortunately my ex owes me thousands on back child support.
yes, ditto; PAY OFF "ALL" CREDIT CARDS! they are killing you with high interest where you could be using this much needed money elsewhere!
DO NOT USE CREDIT CARD UNLESS YOU CAN PAY OFF FULL BALANCE MONTHLY!! *********************
ditto; pursue your EX for getting GARNISHMENT MONEY FOR CHILD SUPPORT from his wages! again, get a lawyer in order to get this accomplished.
do you have any "rich" family members who could "give" your or loan you money at this point in your life?
also, in my newbie package links are 20-25 pages dealing with FINANCIAL BURDENS compiled by melanie reber and i've added to this from member's comments!!
copy my entire package to MS WORD; then use EDIT, FIND, and type in FINANCIAL BURDENS
you should find it twice: 1st time in table of contents and 2nd time, the DETAILED PAGES GALORE!
best wishes! keep us informed! praying for you/yours!
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posted
It's silly to keep a retirement account at a lower interest than your credit cards. You are losing money each month that way.
No, it's not good to go into a retirement account. However, this is an exceptional circumstance.
Keep making the 0% interest payments out of your income.
Once you get the medical bills paid off, it's a good idea to pay what you can back into the retirement account, that way you build it back up to where it was (you might even charge yourself for the lost interest).
Fortunately, my husband has had his best years ever for sales the past couple years. We have been blessed in being able to keep paying for my treatment without going into debt.
-------------------- sixgoofykids.blogspot.com Posts: 13449 | From Ohio | Registered: Feb 2007
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posted
Does anyone know of a credit card offer where they're offering 0% interest for 12 months. Maybe I should google this.
Betty, thank you for you kind words. I wish they could do something about my ex...oh well. I do feel blessed that I can at least work and support my children.
Posts: 911 | Registered: Mar 2005
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Dawn in VA
Frequent Contributor (1K+ posts)
Member # 9693
posted
Have you tried settling with your CC companies to see if you can get a discount? I've done it before and was able to get 60-70% off the final tally if given in a lump sum. You would still have to draw from your retirement account, but not as much. Settling hurts your credit score some, but not nearly as much as bankruptcy, defaulting, etc.
-------------------- (The ole disclaimer: I'm not a doctor.) Posts: 1349 | From VA | Registered: Jul 2006
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posted
CareCredit, a GE Money Company, is for medical procedures and is 0 interest for one year. Google it and with your credit score should not be a problem. MOST doctors accept it, many doctors recommend it for lasik and such.
Jan
-------------------- 3 Strains Mycoplasma and Chlymedia 2001. After treatment fine for all 2004. Major symptoms since 2005. Diag Aug 2008 Lyme. 400 mg/d doxy 500 2/d Ceftin Posts: 164 | From Texas | Registered: Jun 2008
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bettyg
Unregistered
posted
JANIS, OUTSTANDING INFO!
i'm adding it to my newbie package.
i suggest you copy your comments and add as a REPLY TO MELANIE REBER'S FINANCIAL BURDENS post ...
you can do a search for it or just send her a private message and ask her to add it to her info!
look for her name as originator of posts in medical or SUPPORT; she's been posting quite a bit this week! thanks!
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groovy2
Frequent Contributor (1K+ posts)
Member # 6304
posted
Hi Tick
If you watch the PBS show that I put a link to in my above post you will cut your cards up-
Personally I have never had a credit card- I pay cash for everything- my house - cars ect-
If I have it I own it -
My credit rating is Zero - Jay-
Posts: 2999 | From Austin tx USA | Registered: Oct 2004
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hshbmom
Frequent Contributor (1K+ posts)
Member # 9478
posted
I was given the option of participating in the Care Credit plan.
The APR of 29% was sufficient to curb my interest.
Pun intended.
Posts: 1672 | From AL/WV/OH | Registered: Jun 2006
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posted
But isn't that after 1 year at zero? If not, wasn't the same offer.
Jan
-------------------- 3 Strains Mycoplasma and Chlymedia 2001. After treatment fine for all 2004. Major symptoms since 2005. Diag Aug 2008 Lyme. 400 mg/d doxy 500 2/d Ceftin Posts: 164 | From Texas | Registered: Jun 2008
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posted
My thoughts... I wouldn't touch the retirement account unless the only other avenue is bankruptcy. Given the amount you have you could probably withdraw equal to a net amount of 15K. (That means you would need to calculate how much to withdraw to net out to 15K. When you withdraw from that account early, you can expect stiff penalties. So the amount may be closer to 20-25K, but you only receive 15K because of taxes.)
If you can swing it, look into possibly doing debt consolodation, home equity, for all the high interest rate credit cards together to get them paid off.
Whenever possible, avoid using any credit cards.
Finally, look into hiring an attorney to go after your spouse for child support. See if the attorney will work based on a % of garnishment vs flat fee, so he only gets paid if you win.
Posts: 514 | From . | Registered: Apr 2008
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lymednva
Frequent Contributor (1K+ posts)
Member # 9098
posted
I can understand about the under the table stuff. That was one reason I just kept my own retirement instead of dividing mine and his and each of us taking half.
Unfortunately, I lost out on that one, as the state insists I can still teach school, despite my being on LTD, SSDI, and county disability retirement.
Many states have "deadbeat dad" laws that will arrest people who owe back child support, unless they pay it in full.
I don't know where you live, so I can't check it for you, but do look into that.
-------------------- Lymednva Posts: 2407 | From over the river and through the woods | Registered: Apr 2006
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Obviously credit card debt stinks and you want to get rid of it but it's not an easy decision as to whether you should tap into retirement accounts to do so. Even if the retirement accounts are earning less than the interest rate on your credit cards the decision still can be difficult.
You didn't say what kind of retirement accounts you have but here is a bit of info that could help. I am not a financial advisor so be sure to double check anything I say!
IRA: You cannot borrow from an IRA without paying penalties (10%) and taxes because it is technically a distribution. The amount you borrow is considered a distribution (and in this case an early distribution). There is a 60 day grace period though so you technically can borrow the money for 60 days and then return it and pay no penalties and taxes. There is one BIG exception, however, that may apply to you. You can get an early distribution from your IRA for the portion of medical expenses that are unreimbursed that equal more than 7.5% of you AGI. You'll still owe taxes on the money but you'll avoid the penalty.
401-K: These plans usually do allow you to borrow money. Usually you have to pay it back over 5 years and I think the maximum you can borrow is $50K. Keep in mind though that if you borrow the money and either quit or lose your job you'll have to pay the money back in 90 days. Plus whenever you do pay the money back it is coming out of after-tax income (as opposed to when you first contributed where it was most likely pre-tax income). The interest rate you will pay on the borrowings is usually set by the plan.
One thing to consider might be a home equity line. At least with this loan you'll probably be able to deduct the interest off your taxes (unlike with the credit cards).
Hope this info helps a little.
-David
-------------------- Same nightmare, different day! Posts: 401 | From East Coast | Registered: Nov 2005
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