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Posts tagged with: debt repayment

Loan Defaults and 5 Ways to Get Out of It

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In layman’s term, loan defaults are simply debt that you weren’t able to pay. Loan defaults apply to any type of loan – car, home, student, SBA, 401K, payday loans, and the most common – credit cards. Defaults will be incurred once a consumer fails to pay the borrowed amount to their lender, and once a certain period of time has elapsed, your debt will be recorded and will forever be a part of your credit history – which is what you want to avoid. Credit history can be used to formulate a consumer’s credit score, which can negatively affect your future loans.

So, how do you get rid or get out of loan defaults? There are ways, for sure, and you can abide by these tips to make sure you do not incur loan defaults:

Make a budget and stick to it

Never go out of your budget as this can cost you your good credit score, a decent car, and the good relationship with your lender. Once you’ve set a budget, stick to it and make damn sure not to overspend – as you definitely will be sorry for it soon enough.

Choose a lender or can finance company that you can trust

You will be working with them for the next couple of years, so take the time to choose one wisely. Every country has their top lender, Bank of America (USA), Sainsbury’s Bank (UK), Alpha Finance (AU), etc. Whichever lender you choose, be sure to go with the best in the industry. Not just because they can provide car finance with affordable repayments, but also they have excellent customer service that will remind you whenever a payment is due so you can avoid defaults.

Contact your lender ASAP

Anything can be resolved through constant communication. If you know that you cannot pay your loan any further, or you can but you are going to be a bit late, then it’s best to talk it out with your lender. Ask if you have any other option, and if there is any way you can reduce the penalty or default. Ask nicely and surely, you will get an answer that you want to hear.

Consider looking into a debt repayment agency

If you know that you are going to have problems with paying your loans, then don’t sit around and just wait for your lender to chase you down the road – instead, talk to them and a debt repayment agency. Consumer credit agencies will work with you and your lender to come up with alternative payment plans. All you have to do is have your repayment plan approved by the lender, put the money into an account through a debt repayment agency, and the agency will be the one to make the payments for the consumer.

Agree to have your car repossessed

If you do not want to incur any more debts and you have no other options left, then it’s better to have your car repossessed by the lender, rather than having loan defaults that will last for at least 7 years on your credit history. The downside to this is that you will lose all of the previous payments that you have made, but hey, at least, you do not have a bad credit history to your name.

Good luck with your loans, and make sure to follow this list to avoid being caught in an unpayable debt!


Ashley’s August 2016 Debt Update

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Hi friends!

I hope everyone is having a relaxing, laid back Labor Day holiday! We’re still in Texas (we drive back to Tucson tomorrow), so I’m just peeking in with a real quick Debt Update from the month of August.

Here it is:

PlaceCurrent BalanceAPRLast Payment MadeLast Payment Date Original debt, March 2014
Navient$653716.55%$829August$74218
ACS Student Loans$85966.55%$20August$8215
Balance Transfer Student Loan #2$58500% (through April 2017)$500August$7650
Medical Bills$57360%$25August$9000
Balance Transfer student loan #1$00% -Paid off in March 2016$5937
PenFed Car Loan$02.49%-Paid off in January 2016$24040
License Fees$02.5%-Paid off in April 2015$5808
BoA CC$07.24%-Paid off in June 2014$2220
Mattress Firm$00%-Paid off in May 2014$1381
Wells Fargo CC$013.65%-Paid off in May 2014$7697
Capital One CC$017.9%-Paid off in March 2014$413
Totals$85,553 (July balance = 86,518)$1374Starting Debt = $145,472

This was a relatively small debt payment (particularly in comparison to last month’s monstrous debt payment), but I’d expected that given that August is a little bit lower-income month for us (I do not get paid from my part-time job at all in August). Even so, we made some good progress over and above minimum debt payment obligations. We just keep chip-chip-chipping away at our debt totals.

As another exciting piece of information – we think we found “the one” (house). We saw it just before leaving town for the Labor Day weekend and called our realtor to put in an offer while we were on the road (we signed via docusign using my phone’s hotspot to get internet on our computer). Fingers crossed!!!

After house stuff is behind us we plan to make some really concrete mini-goals for the student loan debt. I’ve been hesitant to make any mini-goals (aside from our general 2016 goals) because it feels like so much has been up in the air with the house hunt and trying to just stockpile as much cash as possible for a down payment and emergency fund, etc.

I’ll keep everyone updates as house progress continues. : )

Have a great long weekend!


Ashley’s September 2015 Debt Update

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Full disclosure:  I have intentionally put September’s debt update off (which is why its now October and just barely going up). Anyone who has had some serious debt to repay (like me!) knows it’s a road full of ups and downs. One month I’m flying high! Another month I’m down in the dumps. September was a down in the dumps type of month.

First, I’m so over Navient. Over it! I’m considering doing a loan consolidation just so I can get rid of them as a loan service provider. I don’t want to rush into anything impulsively just because of frustration. Overall, I prefer to keep my loans separate because I enjoy knocking them off one at a time. Plus, I don’t know how it all works when you consolidate if I’ve got some subsidized and some unsubsidized loans. And I’m currently on income-based repayment and I think consolidation companies don’t do that (right? Because aren’t they independent companies – not government backed anymore? I have no idea, clearly I haven’t researched it). I’m just SO OVER Navient I’d do just about anything to get rid of them! Tips/thoughts on consolidation? Right now I’m still waiting to hear back from the mediation company (I referenced in Monday’s post), so no immediate plans for consolidating, but definitely something in the back of my mind.

Second, hubs had another rough month at work last month. Again. This year has been a down year for his business. It’s depressing for him as well as for me (and our budget!) So a lot of my income has had to go to pay bills instead of being all this extra gravy that I thought could be thrown toward debt. Overall we still did have a higher debt payment this month than most months, but it wasn’t near the mammoth-sized debt payment I was hoping for (for comparison:  most months we’re around $2,000ish. This month was over $2500. So we did good, don’t get me wrong! But I was hoping/planning for closer to a $5,000 month).

And third, the car. I had a secret goal to get our car loan under 10K this month. Remember my overall goal was to get it paid in full by the end of the calendar year. But when hubs checks weren’t as much as we’d hoped, my planned debt payments got diverted elsewhere, and I wasn’t able to swing a large enough payment to drop us below $10k on the car loan. To me, in my mind, that’s basically the last nail in the coffin which assures me that there’s no way we can pay the car off in full by the end of December 2015. To be fair to myself, that goal was always a bit of a stretching goal. I still have full confidence we’ll be 100% consumer debt-free by the time we go on our cruise (in April 2016). But I so, so wanted to have it paid in full by the end of December. To start the new year consumer debt-free. I want it so bad I can taste it, folks! It causes me physical pain (like an upset stomach) to know we can’t make  that goal. But we just can’t. We’d have to pay $3,333/month just on the car, alone, to make the goal. Not gonna happen. (tear).

So, that’s why I’ve put off this debt update.

I hate that so many of my posts have been Debby-Downer status lately. I’m really sorry about it! I don’t mean to be a big bummer and all “boo hoo” but it’s just been a tough month.

So, to turn a new page, let’s look forward and not behind. I LOVE October! One of my favorite months of the year! I love the Fall weather, I love the fun festivities and community activities that are offered (many of which are free!)! I love spending so much time outside and playing at parks with the kids (also free!). I love that as my girls are getting older we’re able to do so many fun things! Remember, I missed Halloween last year (it was my friend’s wedding day), so I’m SUPER pumped for Halloween this year (and already got them cheap costumes from Costco)! Basically, a lot of good GREAT things to look forward to! Debt payments are just one of them.

So here’s how our September debt payments looked:

PlaceCurrent BalanceAPRLast Payment MadeLast Payment Date Original debt, March 2014
Capital One CC-17.9%-Paid off in March 2014$413
Mattress Firm-0%-Paid off in May 2014$1381
Wells Fargo CC-13.65%-Paid off in May 2014$7697
BoA CC-7.24%-Paid off in June 2014$2220
License Fees-2.5%-Paid off in April 2015$5808
Navient - Federal Student Loan$159318.25%$256September$4687
ACS Student Loans$86326.55%$31August$21035
Navient - Dept of Education student loans$666556.55%$263September$63254
PenFed Car Loan$107302.49%$1500September$24040
Balance Transfer student loan (Former Navient 1-01)$42120% (through April 2016)$500September$5937
Medical Bills$60110%$25September$9000
Totals$112,171 (Aug balance = 113,894)$2575Starting Debt = $145,472

One thing to note, my “beginning” debt balances are all out of whack now for my student loans since ACS sold one of my loans (approximately $12,500) to Navient. I need to try to adjust it to account for the loan transfer but I just can’t be bothered right now. Seriously, every time I think about Navient I have this terrible visceral reaction. But I’m not going there right now. Focusing on the positive. So, yeah. Just a heads up about why that’s all wonky.

1. What do you think about consolidating student loans? Pros? Cons? Personal stories or experiences welcome!

2. When you’ve failed to reach a big goal or milestone (whether related to debt or not), is there anything you do to try to get over the disappointment? Any tips to pick up my spirits a little?

3. Tell me something YOU look forward to in fall! (Our town does a huge Fall celebration thing. We went last year for the first time not expecting too much and were blown away by all the fun, free activities – from face painting to a petting zoo to inflatable bounce houses, to a trick-or-treating thing for kids hosted by local businesses. There was live music, door prizes, horse-drawn carriage rides and s’mores.  All of it totally FREE! The only thing NOT free was dinner-type food – they had food trucks for that. But you could always eat before you go! I cannot wait for this year’s festival! It was seriously one of my favorite events from all of last year!)


Ashley’s May 2015 Debt Update

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It’s that time again. Time for another debt update. Here you go:

PlaceCurrent BalanceAPRLast Payment MadeLast Payment Date Original debt, March 2014
Capital One CC-17.9%-Paid off in March 2014$413
Mattress Firm-0%-Paid off in May 2014$1381
Wells Fargo CC-13.65%-Paid off in May 2014$7697
BoA CC-7.24%-Paid off in June 2014$2220
License Fees-2.5%-Paid off in April 2015$5808
Navient - Federal Student Loan$39838.25%$116May$4687
ACS Student Loans$210407.24%$77April$21035
Navient - Dept of Education student loans$665436.55%$240May$63254
PenFed Car Loan$147012.49%$750May$24040
Balance Transfer student loan (Former Navient 1-01)$54370% (through April 2016)$500May$5937
Medical Bills$61110%$25May$9000
Totals$117,815 (Last month = 119,170)$1708Starting Debt = $145,472

I’ve rearranged my debts (compare to last month) to be in order of APR (highest-to-lowest). From this re-ordering, it’s interesting to see that the highest APR debt is also currently my lowest balance. Certainly provides a bit of a “hmmmmmmm” experience. Though at the moment I remain steadfast with my current repayment plan:  paying aggressively toward the balance transfer student loan, only an extra $100/month toward the Navient Federal student loan, and all extra monies thrown at the car loan.

Of course, I’m notorious for changing up my order of debt-repayment. So who knows what the future holds? I know this drives people crazy (the opinion being that when a person keeps splitting priorities that nothing ends up getting done). But I’m more of the opinion that any progress is good progress. So for now its progress on the car loan. In the future….more of a student loan focus? Again – who knows?

But, I gotta say, I really can’t wait to be holding my car title in my hands!

What debt are you currently working on?


Debt Repayment: Ashley’s 6-Month Reflections

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It’s been 6 months since I started the concerted effort to pay down debt ASAP (truth be told, we had already been paying down debt prior to this, but at a much more relaxed pace). In some regards it feels like it has been much longer than 6 months, but in others it feels as though this journey has only just begun!

I’m hugely proud of the progress I’ve made. I’ve mentioned before that in January 2014 I made a list of goals for the year and one of the goals was to have my credit card debt paid in full. Not only is that goal accomplished, but it was accomplished months ago, only 3 months after starting on this wild journey. So in that sense, I’m blowing my goals out of the water.

At the same time, the more debt I pay down the more looming and monstrous the student loan debt appears. I feel like I had just put the student loans out of my mind while I was focusing on paying down other things (and they sat in deferment and continued to grow, and grow, and grow…). But now that they loom high on the horizon, the intimidation and fear-factor is real. It feels like an insurmountable obstacle. I know I can do it and I know it will be done. One day we will be debt free!!!! But at the same time, it feels like such a distant future that isn’t quite tangible at this time.

(and now I’m going to be a weirdo and do a little Q&A interview with myself, heh).

What’s been the hardest part?

The hardest part has been putting some of my wants on the backburner right now. I remember starting this journey and others talked about how difficult it would be to cut back travel. I didn’t think about it much at the time, but I realize now just how often we did travel (it didn’t feel like it because it was just going to visit family – not exotic vacations or anything – but we did travel pretty frequently). I’ve had to forego my expensive hair cut/coloring, traveling to visit family as often as we’d like, and just many of the pleasantries in life that I used to do without a second thought (biggest one = eating out!!! I still struggle with this!) So it’s basically just learning to make do with what I’ve got and delay gratification until the future.

What’s been easier than you thought?

Honestly, once I really started sticking to a budget (which I’ve always made but used to be more of a guideline than a rule), everything just fell into place. I’m not saying I’m perfect because there are certainly budget categories that I struggle with, but having the accountability from you all has certainly helped. And now that I track every dollar, it’s just so easy! I don’t even have to think about spending money because I already know where each dollar is allocated. In a similar vein, I think that starting to live on last month’s income has hugely helped the budgeting process, making it much easier to track and stick with.

What’s keeping you going?

When I talked about balance I told everyone I was going to stay nose-to-the-grind until March 2015, at which point I’ll let up steam a little. I think having a one-year time frame is really good for me. Of course we won’t be debt free by that point, but I don’t think I’d be able to stay as super-intense-focused as I need to for the full 3-4 years (or however long full debt repayment will take). Having a realistic deadline is really helpful. Whenever I’m feeling mopey about not buying something I want, I think that I can totally make it another 6 months. Of course I can!!! (Side note: I don’t want this to sound like I’m going to throw caution to the wind and spend-spend-spend come March 2015. But I do think it will be a nice breaking point to pause and reassess some goals and timelines for debt repayment. And FYI I am very proud to be credit card debt-free and will NEVER GO BACK into credit card debt again!!!).

What would you tell others?

Definitely, for sure, blog away your debt! Lol. I joke, I joke. But seriously, I feel like having this platform has been a game changer for me. Having all of your immensely helpful suggestions, as well as your gentle chiding when I go astray has been incredible. There’s nothing like a public forum to keep you accountable, and I feel fortunate to have the opportunity! For most people (who don’t publicly blog about their debt), I would say that the written budget is key. And, also, there’s something that has to change inside you. I’ve heard Dave Ramsey talk about this and its so difficult to explain or quantify, but its like a switch has been flipped from “it would be nice to get out of debt so I’m just going to think about it and mull it over and complain about it” to “I AM GOING TO GET OUT OF DEBT…NOW!!!” I don’t know how you reach this point, but I think everyone has to get there. If you’re not there, it’s not going to work.

Thank you all for being a part of my debt-repayment journey the past several months! I appreciate you all more than you know! I owe you all a debt update. I admit that some of the looming student loans have made me less-than-thrilled to add up the numbers (because the growing interest is just sickening and I don’t even want to see it!). But its been over a month (last debt update here), so it’s time. Be on the lookout for a debt update soon.

Happy weekend!!!


Top 10 Reasons for Divorce

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I’ve always heard that money issues are one of the top reasons for divorce in the US, but when I went looking for statistics about causes for divorce, I had a surprisingly difficult time finding a reputable source to justify this claim.

Sooo, who knows? But, I did find this law office (site here) that provided a Top 10 list of reasons for divorce in America. Don’t know how reputable it is (would have loved to see a Nation-wide survey done by someplace that is not affiliated with making money from divorce….like a Gallop poll or something), but here ya go:

Top 10 Reasons for Divorce in the US  (according to these guys):

10. Boredom

9. Careers

8. Inability to have children

7. Loss of Interest

6. Abuse

5. Lack of communication

4. Addiction Problems

3. Social Networks

2. Cheating

1. MONEY ISSUES

 

So there you have it.

I bring this up because my husband has just come off a 16-day work stint (yes – 16 days in a row with no days off). Right now we are lucky to be in a place financially that money is not a big issue. We have enough to pay all of our bills and put a hefty amount toward debt payments each month. If we really stay nose-to-the-grind, we’ll be debt free in just another 2-3 years! That’s fabulous, right? (especially considering when I started blogging in March 2014 we had almost $150,000 in debt!!!!)

Well, yes. It’s certainly a good thing. We haven’t had an argument about money in a long, long time. We may have disagreements (like, he wants to put more toward savings and I want to put more toward debt), but no actual “fights.”

But you know what we’ve had a couple arguments about lately? Time. I was originally going to title this post “Time versus Money” because those feel like the two options we’re having to select between.

Husband’s business has been crazy busy lately (he owns a small wood flooring business). This is an awesome thing because he could unexpectedly have a solid week off work if a job were to cancel, or there’s subfloor issues that need to be fixed, etc. etc. etc. We can never “count” on the next job so his motto has always been that he must work while there’s work to be had. Things always traditionally slow down around the winter holidays. No one wants someone ripping up their floors and making a mess over Thanksgiving or Christmas, ya know?

So the issue is this:  time or money. What’s more important? I’ve been feeling like a single Mom a lot lately. I do it all: cooking, cleaning, yard work, taking care of the dog, the kids, household chores and errands, etc etc etc. Meanwhile, hubs has been working basically all day, every day. He usually works doing flooring from 7am-4pm, then he might come home for a couple hours, and go back out again in the evening to do bids. Then he comes home and takes time to write up and email out estimates. Plus, the phone calls are incessant. ALL.THE.TIME he gets calls from customers, his employees, the stores he sub-contracts through, etc. It’s endless. So I’ve been feeling a bit neglected and sorry for myself. And when I bring it up, the question is always the same:  Would you rather me work less and make less money???

Phooey.

Knowing that this is not how things will be forever I just grit my teeth and bear it. But it was certainly interesting to see “careers” listed at the #9 reason for divorce. I think this whole time-issue that I bring up could certainly fall under the career category.

Anyway, this is just something I’ve been thinking about as of late and wanted to bring it up.

Between the options of time or money, which would you select and why? I’m sticking to our debt-reduction goals and picking “money” right now, with the knowledge that inevitably we’ll have more time down the road when business slows down a bit. But it still doesn’t make the present very fun!


Ashley’s June Debt Update

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Happy Monday! How about a little mid-month debt update, shall we?

I’ve listed things in order of our planned repayment schedule (according to my new plan of action):

PlaceCurrent BalanceAPRMinimum DueJune Payment Made 
Capital One CC$017.9%--
Wells Fargo CC$013.65%--
BoA CC$07.24%351005
License Fees$55432.7%5585
Sallie Mae - Federal Student Loans$44748.25%6262
Sallie Mae - Dept of Ed$55788.5%00
PenFed Car Loan$227422.49%411411
ACS Student Loans$213887.24%2525
Sallie Mae - Dept of Ed$652367%00
Medical Bills$81030%150150
Totals$1330647381738

I’ve been snowballing payments as I go and the snowball has reached a pretty good size!

$450 (from Capital One CC)

$350 (from WF CC)

$100 (from Mattress Firm account)

$60 (from refinancing the car, which now has a lower payment)

$35 (from Wells Fargo)

= Total “Snowball” payment of $995 (we’ll round up to $1,000/month)

The first debt I want to focus on is the license fees. We have been paying $55/month toward it, so our payments starting in July will be $1055. In addition to that, we’re still expecting to have “leftover” money at the end of June so hopefully we’ll be able to make additional snowflake payments in addition to putting some away for savings (an as-of-yet undetermined amount).

Per this conversation, we’re going to start stashing a little money aside, using leftover funds from the end of the month (as opposed to writing a line-item into the budget). At this point, I’m just going to store it in my Capital One 360 savings account. I want some time to do a little research into various options, but my intent is to open a Roth IRA at some point and begin planning for retirement. I want to gain a little better traction on our current debts right now, but I don’t want to put the Roth off too long either. So at some point retirement will, indeed, become a line item in our budget. Currently, we’ll just keep stashing a little here and there into our CapOne360 savings.

Also – and this is random – but on Sallie Mae’s website I decided to click on the “payment history” tab to see more info about my 8.25% APR student loan. I have always only looked at the overall number (total debt due), but when I clicked on payment history it tells you, broken down, how much of your monthly payments are going toward principle (principal?)  versus interest. Can I say how disgusted I was to see that out of every $62 payment, approximately $32 went to principle….the other $30 toward interest?!? WTF? How is this even possible? I know they stack the interest up-front so I’m sure it all makes sense numbers-wise, but that feels like a 50% APR!? Disgusting. I cannot wait to target those two high interest student loan debts. Can you believe – when I’ve worked my way through them (and am down the list to the car in terms of the order of repayment), my monthly snowball payment for the car will be over $1500!?! The power of the snowball is real, my friends! Very, very real! Never did I ever think I’d be making regular monthly car payments of $1500!!! At that rate (along with an extra snowflake payment here and there), it really is reasonable to have it paid in full within a year from the time we start focusing on it for debt repayment (remember, that’s the goal….I plan to start focusing on the car debt in February 2015 and the goal is to have it paid in full by February 2016). Of course, my other loans come out of deferment in February so we’ll see what happens. If we can’t make all the minimum payments the funds for the minimum obligations will have to come from our snowball. : (

I don’t want to see that happen. I want these debts gone with a  quickness! I know we still have an unfathomable amount of debt, overall, but it really feels like we’ve been making great progress. It’s very encouraging!

 

 

 


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