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Old 06-26-2013, 09:10 PM
rw8becky rw8becky is offline
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Question Marks Trying to get back in the black!

We have 15k in credit cards, 8k on a student loan, 79k on a mortgage and 20k on an auto loan. I'm on maternity leave until next week and my income has been cut in half (luckily employer pays STD). We are trying to do the DR plan and are working on babystep 1.

The hubs and I had a miscommunication whereas he took a week off when I had the baby and employer did not pay vacation. He will get 4 weeks vacation pay this August. I did not budget for that week without pay and we are thru our savings.

We have a 12 Sorento which I traded in my 00 Grand Am for. I need a safe car to transport the girls. Would you trade in the Sorento (its worth $22k outright) for a vehicle worth around $8k and take out an auto loan for that $8k? What would you do?

The Sorento is a hard vehicle for my toddler to get in and out of on her own and I'm considering a minivan which is lower to the ground and easier for her to get into her own seat. $8k is roughly what a used minivan is going for that is still relatively new (needing a safe newer vehicle with tons of airbags).

Looking for thoughts and opinions thanks!

I'm Becky working mom to Natalie and Kassie and wife to Todd
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Old 06-26-2013, 09:45 PM
gooberhoney gooberhoney is offline
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when it comes to vehicles, the moment they roll out of the dealership they start depreciating in value. That is why vehicles are NOT good investments. If the blue book value of your Sorento is 22K, I don't know if you can sell it at that price with our economy as it is right now. Since money is tight, most people are looking for 'new to them' vehicles in the range of 5 to 10 grand and if they're going for the maximum, they want some bells and whistles on them, too.

if you feel you're paying too much a month for it, will you consider returning it? there is a caveat though, your credit score will definitely take a nosedive so depending on your FICO score, you have to weigh carefully this option as a last resort if you have no other viable options left.

as to feedback on minivan, we have a Honda Odyssey that we got brand new in 2003 and it has been a trouble-free 10 years with 80K miles in it; we maintain it meticulously so we can enjoy it for another 10 or more years.

to answer your ? regarding taking out $8k loan to buy a minivan, you have to consider your credit score because that is what financiers will first look at as to how much interest rate you'll be paying. and that is IF, they'll give you the loan. as to trading in your Sorento for its current blue book value of 22K, I hope you get that much.

I hope you get a good deal.
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Old 06-29-2013, 09:30 AM
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Somehow I find that when you start switching cars around you wind up loosing. Like gooberhoney said, cars depreciate and this Sorrento might be worth more to you now then the money you loose by trading it in.

I am not sure that I can make this decision or help you make it. There are too many factors. But my DH always wants to buy and sell our cars and I have to bop him on the head because we always come out worse than we were to start with. LOL My philosophy is get a car, stick with it until it starts literally falling apart.

We just sold a car this week. It was 18 years old (Suburban). We bought it 6 years ago for $2600 and we sold it for $1000. This was the best money we ever put into a car. Other than the poor gas mileage, it was awesome. I am not saying we didn't have repairs, but you have that with any car.

We now have a 2002 Tahoe. We paid $6000 for it (more than the suburban), but we hope to get at least 6 years (or more) out of it too. But our goal is to drive them until they are falling apart.

~Missy~ Co-Leader for Food Lion and Martins/Giant PA


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Old 06-29-2013, 10:03 AM
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not knowing how your Sorento was financed, if it was dealer financed, then it might be easier to return it for whatever value they give you credit. Know that you'll have to take a huge loss even if you just used the car for a year or less. Your FICO score will take a huge nosedive and depending on what it is now, expect high rates on your insurance premiums since insurance companies check one's FICO score/credit history to determine rates you'll get. I've asked my insurance agent why and she said those with excellent credit histories tend to be more responsible with their properties. They also maintain their vehicles in top shape so they reward them the best rates (especially on multiples). High interest rates are not limited to insurance premiums, it may also affect interest rate of loans you're applying for, in this case, for the minivan.

Discuss this with your DH and I hope you come with a plan that is acceptable to both of you.
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Old 06-29-2013, 10:31 AM
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Thank you everyone we have decided to keep the Sorento. 15k miles with no problems and we have bumper to bumper and powertrain for 10yrs/100k miles. I traded in my 00 Grand Am for it. My mechanic said the bottom was rusted out and the brake lines would go next. My priority is my kids and having/keeping a safe vehicle for them to ride in. We like to keep our vehicles until they die also.

I have been looking into debt relief programs where they will settle with cc companies for less than what you owe. My question is do you have to be behind on payments in order for them to settle? Not sure it is worth my time since we are barely current on all minimum pymts. Anyone have experience with specifically Freedom Debt Relief?

I'm Becky working mom to Natalie and Kassie and wife to Todd
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Old 06-29-2013, 10:33 AM
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Be sure to check impact on credit rating and ask what if any fees are charged. Also check BBB for complaints
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Old 06-29-2013, 11:03 AM
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Originally Posted by rw8becky View Post
Thank you everyone we have decided to keep the Sorento. 15k miles with no problems and we have bumper to bumper and powertrain for 10yrs/100k miles. I traded in my 00 Grand Am for it. My mechanic said the bottom was rusted out and the brake lines would go next. My priority is my kids and having/keeping a safe vehicle for them to ride in. We like to keep our vehicles until they die also.

I have been looking into debt relief programs where they will settle with cc companies for less than what you owe. My question is do you have to be behind on payments in order for them to settle? Not sure it is worth my time since we are barely current on all minimum pymts. Anyone have experience with specifically Freedom Debt Relief?
If you feel safe in your Sorento, keep it. The advantage with brand new vehicles is you know exactly how it was taken care of and how it was maintained. You're not likely to have huge troubles with it (hopefully).

I'm not sure how CCC settle debts when the debtor wants to pay them off. First thing you ask yourself, what amount are you going to offer them and do you have that amount right now? If you ask me, between settling medical bills and paying CC debts, you'll have better chances of medical providers taking whatever amount you can offer them paid on a regular basis till its paid off compared to settling with CCCs. As we all know, CCCs are vultures but I can't blame them because they did NOT force themselves to pay our bills. We are the ones who agreed to their terms and conditions (including their high interest rates) so we should pay.

If you're just paying minimum right now, UNLESS you quit swiping that/those cards, you'll continue to be saddled with CC debts for years to come. But when you make a plan to pay off your CC debts, look into zero transfer offers of Discover and other CCCs. BUT keep in mind that ONCE you don't pay ALL of it in the prescribed time period, they can raise the interest rate to as much as 29.99%, IIRC. So doing the balance transfers is ONLY for those who are well aware they can pay off the balance transferred in the period of time given them. The advantage here is whatever balance you transfer is NOT continuing to accrue interest, you just have to pay it off on schedule. If you can do that, then start checking zero % balance transfer offers.

It is good that you're looking into this now before your debts go out of control. Good luck!
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Old 06-29-2013, 11:26 AM
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Originally Posted by rw8becky View Post
Thank you everyone we have decided to keep the Sorento. 15k miles with no problems and we have bumper to bumper and powertrain for 10yrs/100k miles. I traded in my 00 Grand Am for it. My mechanic said the bottom was rusted out and the brake lines would go next. My priority is my kids and having/keeping a safe vehicle for them to ride in. We like to keep our vehicles until they die also.

I have been looking into debt relief programs where they will settle with cc companies for less than what you owe. My question is do you have to be behind on payments in order for them to settle? Not sure it is worth my time since we are barely current on all minimum pymts. Anyone have experience with specifically Freedom Debt Relief?
Be VERY VERY CAREFUL doing this. You must read all fine print and way the pros and cons of using a debt relief company. If i'm not mistaken you have to claim the difference of the money owed and money settled for on your taxes at the end of the year as income which could put you in a higher tax bracket.

Hi, I'm Gina wife to Alan DD (21) granddog (English Mastiff) (maltese)


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Old 06-29-2013, 01:54 PM
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Thank you for the replies I was told by Freedom that I would pay roughly $8k of the $14k that we owe, it would show on our credit reports as "settled for less than the balance due" and it would affect our credit score. I'm still investigating and looking into our options. I have excellent credit and would like to keep it that way.

The only physical credit card I have is the Discover which is a couple of hundred away from its limit and I'm not willing to contact them to try to increase my limit. The other cards are gone/have been cut up and accounts closed due to inactivity.

We bought a foreclosed home in 06 which needed repairs which is where our debt came from. I stupidly bought a home at the "all knowing old" age of 24 with 0 down and an ARM which is where I got into trouble to begin with.

Settling for 8k is of interest to me considering that we do owe $14k and yes I'm aware we would have to pay taxes on any forgiven balance. Still looking into consolidating with a Chase Slate, which as I investigated is the only 0 APR/0 balance transfer fee cc I could find online given that I like to cut up the physical cc. Still waiting for a reply in the mail. States online that there is a 0 balance trans fee within 60 days of opening account. Hoping to hear something from them soon.

I'm Becky working mom to Natalie and Kassie and wife to Todd
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Old 06-29-2013, 04:00 PM
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Originally Posted by rw8becky View Post
Thank you for the replies I was told by Freedom that I would pay roughly $8k of the $14k that we owe, it would show on our credit reports as "settled for less than the balance due" and it would affect our credit score. I'm still investigating and looking into our options. I have excellent credit and would like to keep it that way.
use that excellent credit history in your favor, then. IDK how much it'll ding your FICO score if you go ahead with that deal with Freedom (Chase?). BTW, how does settling for less than balance due affect you long term? if you can knock off 14K out of the 15K CC debt, that'll leave you with just 1K CC debt, right? You think it'll ding it too much to bring you down to a lot lower than 750? I know 750 and up is considered as very good to excellent score that financiers are looking for. If the trade off for knocking off 14K worth of debt is bringing down your FICO score to levels near 750, I think you'll still be in a good place. If it'll be down to 600's level, that is the time you really have to weigh things on which one you can take.
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