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Debt Update


Sorry for the delay in getting this update up, but I’ve really been productive with the extra time (minus being sick, of course.)  To be honest, I feel like I’m starting all over again on this journey with revised debt, new debt and a new perspective. With that being said, while I typically have a plan, months in advance, I am really wanting the communities input on how I should tackle this debt now.

So here it is, listed from high interest rate to lowest with the Estimated Pay Off date blank as with your help I’m ready to re-prioritize my plan:

Debt as of June 10, 2014

Name Balance Interest Rate Minimum Payment Estimated Pay Off
Retail Card $3297 25.99% $99
Line of Credit $838 15.95% $218
Credit Card $5,080 13.9% $150
Car Loan – NV $31,043 6.79% $696
Student Loan $31,687 2.88% deferred
Joint Account $889 0% $0
Car Loan – Honda $1,900 0% ASAP


Retail Card – This is a retail card that I use for my business. You’ll notice the balance has gone up several hundred dollars since I first listed this one. That was for ink for my laser printer I needed for a project, an unavoidable cost, but I am ready to be rid of this high interest debt! The minimum payment required doesn’t ever seem to make a dent so I need to really increase the monthly payment to see progress.

Line of Credit – This debt shrinks quickly as I make payments so I’m ready to finish it off and free up that $200 towards something else.

Credit CardAgain, the minimum payment doesn’t seem to make a dent here and I had started to free up some credit until this past month. I can go either way on this one as far as priorities go.

Car Loan – NV – This is our GIANT family car, a necessity but a huge money pit!

Student Loan – Speaks for itself.

Joint Account – This is new debt. I’ll explain it in my short and sweet version. During my marriage, I handled the money. Since my marriage ended, I have continued to pay 1) his life insurance and 2) his car insurance for one car that he kept but is in my name. The joint account was left open so that I could continue to pay these bills to make sure they were paid. At times, he would overdraw his personal accounts and then it would clear out this joint account (which only I used.) The account was overdrawn this last time by $1,300. I had enough and closed the account AND stopped paying his life insurance policy. I’ve paid down to the current amount this month and need to get it paid off to avoid affecting my relationship with the bank. This is just what it is. I will address the insurance stuff with a revised budget shortly.

Car Loan – Honda – Again, a short sweet version of this new debt…for the last year I have “stored” one of my parents’ cars since they moved to Texas. It was an informal agreement that the car would be made available for me to purchase for my twins when the time came that they were ready to sell it. (They left it here when they moved to Texas so when they came to visit we would have an extra car for them to use.) The time has come that 1) my twins have their learner’s permits and are now 9 months from getting a driver’s license (a privilege, not a right, but one I will be thrilled with as a single parent with lots of running around to do.) And 2) my dad wants me to pay for the car before the boys drive it for valid safety and insurance reasons.) We’ve agreed to $1,900 and he would like me to pay it off ASAP.

Note: I have removed the debt to my dad as we are both in agreement that I need to focus on my credit affecting debt in order to get in the position to refinance the house in my name.

Ok, so give it to me straight, what should my plan of action be? On a typical month my minimum payments are $1,163, I typically have a snowball payment anywhere between $200-400, sometimes more. I am listening EARS WIDE OPEN for your advice here.


  • Reply Walnut |

    My suggested order of attack:

    Car Loan – Honda
    Joint Account
    Line of Credit
    Retail Card
    Credit Card
    Car Loan – Honda
    Student Loan

    Since your kids have been able to enjoy a few weeks of camps and vacation, let them know its time to be frugal. Think about having a ‘No Spend Month’ as well as a ‘Declutter and Sell’ month. Don’t drive if you can bike or walk. Scour the grocery ads a little bit closer. Every kid can spend some time going through closets and drawers to pare down what isn’t being used or worn. Look critically at furniture and household items and consider selling what isn’t necessary. If I were you, I would make it mission critical to pay off the car and the joint account in very short order. I think if you’re motivated, driven, and clean house, you can pay these off before you start homeschooling in the fall.

    • Reply Hope |

      Thank you for the thoughtful response, Walnut…I’m completely with you in getting some of this taken care of before the fall. (We school year round so not really a start/stop point to go by there.)

      I have been in purging mode for months now so not left of value except my jewelry which I have yet to find somewhere that offers reasonable rates for it, although I am looking.

  • Reply Hannah |

    Please don’t be offended, but I am upset that you even HAVE this situation with an ex who was/is treating you badly.
    Why are you paying for his insurance policy? Why does he have a car that Is In your name? If the car is paid off and in your name then isn’t it titled In your name? Wouldn’t that cause issues with registration, or if he crashed it?

    And why why why do you have a joint account? With someone who overdraws??
    This is just not right to inflict on yourself, you deserve better.
    If you still must pay on that car insurance it is easy to pay out of another account he has no access to.

    I know this isn’t what you asked about in your post, but it really bothers me when people let themselves get mistreated like this. It isn’t right to inflict that on yourself.

    • Reply Scooze |

      She says that she already closed the account. Just needs to pay it off and move on.

    • Reply Hope |

      Until you’ve been in a abusive relationship, financially and emotionally dependent on the person with pretty much no support for leaving it, there is no way you can understand what it took to cut the ties. I’m not offended, I’m more interested in people being educated on this because women, especially those with children needs lots of support to make that move.
      I have continued to pay the life insurance as the policy would help me with our two children should something happen to him. Now, 6 years after the final split I am confident enough (and fed up enough) to do it. I am very proud and relieved to have made this step.
      The car is financed and titled in my name, thus the reason I make sure the insurance is paid. He by our divorce decree is financially responsible, but I am not willing to take a chance should something happen. As soon as it is paid off (he has been very good about making the monthly payments,) I will transfer it to his name and be done with it.
      I appreciate your concern, I wish I had had someone who got angry on my behalf several years ago. But it is a process and I finally feel healthy enough to even make this step.

  • Reply Scooze |

    I would pay off the Retail Card and the Joint Account first. Then move to the others. My question is about the car loan: what is the car worth? While I know that you need a large car, you definitely do not need a car worth $31k. Even for a large van, you should be able to get a decent used one for $5k or maybe $10k at the most. I’d say trade down (if you’re upside down on that one, just take out a small personal loan for the difference) as soon as possible. This will free up a lot of monthly income to pay off the rest of the debts. Once you’re debt-free, you can think about having a new car. And it will be much affordable.

    • Reply Hope |

      The car loan is definitely on my radar for a radical change; HOWEVER, with a minimum of 4-6 kids with me at any given time something big is required, and since we will be traveling cross country to visit my parents a reliable car is a MUST to me.
      After this summer’s travels are over though…it will definitely be in my sights to see about a radical change.

  • Reply Sak |

    Joint account, line of credit – throw everything at them first – except for starting payments of 100/month on the Honda. As soon as the first two are paid off – throw it at the Honda. Then the retail credit card debt, then the next credit card. After that – take a deep breath – evaluate your savings and beef them up and hit the new car and then student loans. You need some savings to avoid future debt. You should consider separate savings for the business (doesn’t need to be a special business account)- that is “working capital”. So you buy the supplies you need using that money, repay with next earnings – will help avoid cc debt.

    Relationships are messy and you are certainly dealing with the lingering mess of the last one. If he has a car that is in your name and you intend to let him keep – transfer title to him and remove the potential liability from you. If you don’t intend to let him keep it – take it back and sell it to pay for the van/boys’ car.

    Also, what is the plan for paying the insurance coverage for the boys. It will be pricey. Good luck!

    • Reply Hope |

      Thank you for your thought out response. See my earlier response to Hannah for ex-husband’s car details,
      I don’t have a plan for the twin’s insurance yet…but it’s starting to roll around in my head for sure. A job will definitely be a must for them but so far no luck on that front. We will revisit in August when we return from visiting my parents in Texas.

  • Reply Meghan |

    Hi Hope-

    I think mission number one should actually be an emergency fund, $500-$1000 shouldn’t take too long and I think with the kids and the variability your work sometimes has you really need that available.

    I then think you should work on the bank debt. As you have a relationship with the bank have you been in to talk to someone about the situation? As you are wanting to make sure to build your credit I think it should be wiped out ASAP. (I also think you should try to recoup the money from your ex because he needs to know you will not be his money tree anymore, but that is up to you.)

    As far as the car you are purchasing from your parents, are the twins contributing financially at all? I know it will be a help to you but there will be benefits to having a car to them as well and I don’t think it unfair to expect them to contribute financially. If they were to split the total cost themselves they would each need to come up with a little over $100 each every month, or you could split the cost with them where you provide $950 and they provide $950. (I am of course assuming a 9 month payment plan so it is paid off by the time they have licenses.)

    Then the line of credit (which might be wiped out before you even finish the above because of your monthly payments). And finally hitting the last debts in order of highest interest rate first. (Maybe you will even be able to look into refinancing your vehicle like Ashley!)



    • Reply Hope |

      Hi Meghan,
      Thank you for sharing your thoughts. The boys will definitely have to contribute to their driving…what that will be, I haven’t quite figured out, and it’s kind of a mute point until they can get regular jobs. We will be revisiting that this fall when they turn 16 as we haven’t had much luck so far in finding part time work.
      The emergency fund is definitely on that list of things that need to be done, thank you for bringing it up and reminding me. Planning to spend some time tomorrow formulating a plan.

  • Reply Den |

    I would snowball with lowest balance first:

    Line of Credit $838
    Joint Account $889
    Car Loan – Honda $1,900
    Retail Card $3297
    Credit Card $5,080
    Car Loan – NV $31,043
    Student Loan $31,687

    If you have an extra $400 each month to throw at your next debt, you should knock out the line of credit in less than 2 months, the joint account in another 2 months, and then tackle the Honda loan to your dad…..then attack your credit cards until they are gone too…..phew, won’t that feel good to have them all gone, then you can concentrate on the big car loan and student loans.

    • Reply Ashley |

      +1 here. This is exactly what I was thinking, too. Also, can the teens contribute anything toward the Honda, being that it would be their primary form of transportation? Even if they can scrape together a couple hundred dollars, it would go a long way (especially since that money could go toward the Honda now, while you’re focusing on freeing yourself from the line of credit and joint account).

      • Reply Kerry |

        Yeah, that Etsy/garage sale plan is a waste of your time but it’s not a waste of your teens’. Have them plan these little money-making things out and run them, and tell them they can apply the money to the Honda.

    • Reply Hope |

      Thank you for your considered response. I will be spending some time tomorrow formulating a game plan and greatly appreciate your feedback and suggestions!

  • Reply Alexandria |

    I started to post and had to leave, and I see the things I were going to say have been said. But I will second those comments.

    Both twins could contribute $80/month towards the car purcahse – which would be a nice debt snowball. (My parents were in a much better financial position, but I was still expected to buy my first car. I think it’s certainly fair given the financial situation. Of course, my parents let me pay to the tune of $100/month so that I could drive myself to work to make that money – it took me a year to pay off. I think it’s reasonable to give them a year or two to contribute).

    I personally think that the $30k+ car loan is *insane*. We have a minivan we paid $13k-ish for because it was one year old. It comfortably fits 7 people. We keep our cars for 15-20 years (As long as they will last). I know it’s probably said already (I probably already said it). But the vehicle loan just sticks out like a sore thumb on this post. & this is the thing. You just need something to get you through so that you can gain some traction. Maybe once you can dig out of this debt you can afford something nicer. Just because you have to buckle down a bit now doesn’t mean you can never afford something nicer. (The reality is you will probably be able to afford whatever car you want once you get the debt tackled).

    • Reply Hope |

      Hi Alexandria,
      The twins will have to contribute to their driving in some fashion, but I haven’t worked out exactly how much, and I will definitely have to wait for them to get part time jobs as we’ve had no luck with that thus far.
      I look at the car loan with a sharp eye as well, but the idea of a car breaking down on me is just about my worst nightmare when is why I’ve stuck with newer cars since I’ve been single. There is really no one to bail me out should I become car less. And with 4-6 kids with me at all times, the giant 12 passenger van is really a necessity for now. But I will evaluate again this fall when all our cross country travel is over and I don’t have that fear of being hours from home, stuck on the side of the road.

  • Reply Jill |

    Just a thought…but if the kids are the beneficiary of the ex’s life insurance policy, or you are, and you need child support from him to make ends meet, then you need to keep up life insurance payments. After all, it protects you. Not him.

    • Reply Hope |

      That was exactly my reasoning in paying it all these years. But finally I am confident enough that we would be okay if something happened to him AND really I’m just fed up with paying the bill as I struggle to get out of debt. The combination of the two has led me to be able to make this change and I’m really relieved and proud of it.
      But I truly appreciate you understanding why I let it go on for so long.

  • Reply Mary from SC |

    Hi. Hope you are feeling better. I hate to hear about the new debt for you. You may have addressed this but…child support from ex? Also, glad you closed out that account. No one should have that ability to create new debt on your behalf. I agree with the other posters…That’s a lot of vehicle debt. Maybe be open to other options. My suggestions..much like the others…pay off the highest interest rate credit card asap. Include your teens in the entire vehicle process…registration fees, gas, insurance, maintenance…and teach them (or have someone) teach them basics…how to change a tire, check oil, troubleshoot, etc. Good luck on your new start.

    • Reply Hope |

      Hi Mary,
      I am feeling better, thank you! Child support from ex is ….there but not reliable and not really enough to count in budget most of the time. I won’t complain as I know many have it worse and I know when I tell him the kids need something he comes through, so I have much to be grateful for.
      I am willing to consider radical options for my car, but will not do that until this summer’s travel is over as we need the space and reliability with traveling cross country. Having an unreliable car is just about my worst nightmare as a single mom with no car knowledge and little alternative if my should go down.
      The twins will be forced to step up as far as their driving goes, but I haven’t figured out how much yet, and probably won’t until they can really get part time jobs which I hope they will be able to do this fall when they turn 16.

  • Reply Hope |

    I REALLY appreciate everyone’s feedback. I’m planning to spend some time tomorrow formulating a new plan and working on a new budget including my emergency fund goal! Any other suggestions/perspectives would be welcomed!

    (And I guess I should have given myself a little credit with this post as I have paid off a retail card and property taxes since I began this journey on BAD so it’s not been all bad!)

    • Reply TPol |

      Definitely! You should keep posting the ones all paid off showing 0 balances. Seeing your accomplishments will help keeping the motivation. Kudos to you for what you have already accomplished financially and emotionally. You are a strong lady and I am sure you will wipe this debt off.

  • Reply AS |

    Wow this is a tough one. So many competing needs for money all converging. I think folks so far have given excellent responses. I’ll chime in and maybe echo a few others, using the math that you have enough cash flow to handle minimum payments + 200-400 to put against debt payoff.

    You have 7 months left until the end of the year, you need to get out of the bank overdraft ASAP, and you absolutely need the car in your name by the end of February 2015 but ideally sooner.

    1. Bank overdraft, because it’s urgent. 2-4 months to be clear.
    2. The Honda. This will take 4-9 months. So under a best-case scenario you own the car outright just before the end of 2014. Worst case you miss your absolute 9-month deadline. Not to mention your dad wants the money sooner than 9 months, really. Clearly any help the twins can put towards this, the better, but it’s still priority #2.
    3. Line of credit. Ideally I would have this higher since it frees up $200/mo in cash flow, but the other items above are more time-sensitive. The extra interest you’ll owe while paying off #1 and #2 first is about $100, which sucks but the peace of mind may be worth it. 2-4 months, you’re now at ~June 2015.
    4. The obscene business credit card. You’ll now have 400-600/mo towards debt, but the interest has taken this guy up to ~4000 now, and I’d anticipate another $1000 in interest on top of that as it will take you a year or so to get rid of this. That’s June 2016 — and I hate to discourage you by saying that.

    25.99% makes me cringe and in an ideal world you’d attack this first, but like I said up front you have so many competing demands for money this is a tough one.

    This business card is the one to get really creative on — or really aggressive if you see a windfall. If there is any chance you can refinance this one, or get a partial early advance payment from a project, or take some reserve cash out of your business, this one is the one to hit. The low minimum payment is hurting you because you’re running up so much interest each month.

    You probably already thought of this, but worth trying to refinance your car rate too. Find out what your fellow blogger did, would it apply to you?

    The rest I would do in order of descending interest rate, but realistically that’s a couple of years out and so many real-life things will happen between now and then it’s too early to plan.

    All the best – this is a really tough one!

  • Reply AS |

    On an unrelated note, I was able to get several hundred more pages out of my laser printer toner after the “low toner” light came on. I found this while shopping for a replacement toner cartridge on Amazon.

    On my printer model, a Brother home model, there is a light sensor that the printer sends through the toner cartridge to determine if it’s empty. Even when there is a little toner left, the light passes through and it registers empty. A small piece of masking tape later I was back in business. When the printer starts streaking, the cartridge is really empty and it’s time to change it.

    Google your printer toner cartridge. You might be able to get a few more weeks out of your current cartridge come replacement time.

  • Reply debtor |

    This isn’t really related to the order of debt payoff. but um, if you have a CC for you business can you please transfer the balance to a new CC with a reasonable APR. That interest rate is giving me heart palpitations!! Seriously, i haven’t seen that on anything outside clothing store rates. Insane!.

    You know, when you get into a rhythm on your payments, i would also look and see if you would be eligible for a personal loan from a credit union in your area and see if you could consolidate some of these debts. It helps a lot with cash flow which I think is a need for you with so many kids.

  • Reply Minnie's Mom |

    Jobs for your children do not have to be with an employer. They can become self employed–cutting grass, car washing and waxing, baby sitting, odd-jobs, tutoring etc. They just need to get out and canvas your neighborhood. The boys need to have worked to pay for this car. This summer is the perfect time to do that.

  • Reply AY |

    I would also love if you edited this post to include the debts you’ve paid since starting a few months ago! I found myself trying to remember what those were while reading it, and it would show new readers how much progress you’ve made 🙂

  • Reply Katie -DC |

    I will chime in about the car. Either refinancing and/or get something used and reliable. Ask your friens for referrals for a good mechanic and start shopping for something used. That payment is obscene. If you’re really that worried about something breaking down, spring for AAA. I’ve been driving for 30 years, mostly on remote roads, and I’ve only broken down once, and that was my fault for postponing a repair that I knew I needed. The odds are that will never happen to you, and it certainly doesn’t justify that expense. Seriously, you can get a good van in VA for 10K, and your insurance will drop too. I just bought a Honda Odyssey that I’m driving cross-country this summer for $6,500. It’s in pristine shape. I’d like to see that car payment drop by at least half.

  • Reply Theresa |

    I agree that is you get a AAA membership (under $100 for a year) and a reliable mechanic then much of your fears should be relieved. If you get a car payment down to $300 you can still set aside $150 in savings for car repairs monthly and still be saving $250 a month off your current payment.

    Can either of your twins do babysitting or dog walking? cat sitting? Those activities keep the kids around here flush in cash! We have a MOPS group in town that pays home schooled kids to do day care while the moms meet in the school year.

    And you should give yourself credit on your chart for what you have already paid- your property taxes. Also give yourself credit for getting the part time job. Hang in there.

  • Reply Jay |

    Wow – not to be rude but $700 per month for a car note is killing you. I bought a 10 year old Pilot from a buddy for $8K, runs great, seats 8 and cross country capable. If you are in debt you can’t afford a $30K car. If you really are interested in getting out of debt you’ll have to make some tougher choices.
    $200 for cell phones, kids activities, etc have to be cut if you are serious about your situation.

So, what do you think ?