Comments on: Borrowing From Relatives And Getting Out Of Debt http://www.moolanomy.com/1328/borrowing-from-relatives-and-getting-out-of-debt/ Personal Finance. Investing. Wealth Building. Thu, 18 Mar 2010 19:14:53 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Carnival of Twenty Something Finances: NCAA Final Four Edition 4/6/2009 | Weakonomi¢s http://www.moolanomy.com/1328/borrowing-from-relatives-and-getting-out-of-debt/comment-page-1/#comment-20641 Carnival of Twenty Something Finances: NCAA Final Four Edition 4/6/2009 | Weakonomi¢s Mon, 06 Apr 2009 10:57:47 +0000 http://www.moolanomy.com/?p=1328#comment-20641 [...] presents Borrowing From Relatives And Getting Out Of Debt posted at [...] [...] presents Borrowing From Relatives And Getting Out Of Debt posted at [...]

]]> By: Bank Fiesta http://www.moolanomy.com/1328/borrowing-from-relatives-and-getting-out-of-debt/comment-page-1/#comment-20414 Bank Fiesta Wed, 18 Mar 2009 09:33:23 +0000 http://www.moolanomy.com/?p=1328#comment-20414 My paycheck goes into multiple bank accounts as direct deposits.In the 'bill and desposits->paycheck" section,I think there is no diret way of setting up this .On the web,it was suggested to do some splitting in the "Deductions after Taxes".I have some entries already in that section (like Medical,Dental insur etc.,).Money only asked only one bank info. My paycheck goes into multiple bank accounts as direct deposits.In the ‘bill and desposits->paycheck” section,I think there is no diret way of setting up this .On the web,it was suggested to do some splitting in the “Deductions after Taxes”.I have some entries already in that section (like Medical,Dental insur etc.,).Money only asked only one bank info.

]]> By: tom http://www.moolanomy.com/1328/borrowing-from-relatives-and-getting-out-of-debt/comment-page-1/#comment-20355 tom Fri, 13 Mar 2009 16:54:45 +0000 http://www.moolanomy.com/?p=1328#comment-20355 From personal experience, if the guy lives at home and makes ok money, say around 1500-2000/month, he can pay off that whole amount in probably 12 months. I paid off 14K in about 7 months and my income was in that monthly range while living at home. And I cut back on practically as much as I could. I did not have any emergency funds or savings, it may be a good to have that but I really don't know your situation. I had no car or any medical issues to worry about so i didn't have an a emergency fund. this guys situation may be difference, but in the end, hes gotta suck it up and attack that debt aggressively. From personal experience, if the guy lives at home and makes ok money, say around 1500-2000/month, he can pay off that whole amount in probably 12 months.

I paid off 14K in about 7 months and my income was in that monthly range while living at home. And I cut back on practically as much as I could. I did not have any emergency funds or savings, it may be a good to have that but I really don’t know your situation. I had no car or any medical issues to worry about so i didn’t have an a emergency fund.

this guys situation may be difference, but in the end, hes gotta suck it up and attack that debt aggressively.

]]> By: Adam @ Checkbook Diaries http://www.moolanomy.com/1328/borrowing-from-relatives-and-getting-out-of-debt/comment-page-1/#comment-20352 Adam @ Checkbook Diaries Fri, 13 Mar 2009 15:39:19 +0000 http://www.moolanomy.com/?p=1328#comment-20352 I also think it's a bad idea. There is a very important lesson to be learned here by the discomfort of his situation. If he were to be bailed out, that lesson would possibly be lost and the situation may occur again down the road. Call the credit card companies and get the rates lowered. It works...I've done it (recently). There are many articles available online that will walk you through the most effective way of getting the card companies to reduce the rates. Before you begin working on paying off your debt, make sure you STOP SPENDING MONEY. If you're trying to pay off the cards and are still spending money on things that you don't need to survive, you'll just end up spinning your wheels. Use this as an opportunity to really feel the impact of consumer debt, and make sure you never let it happen again. It also makes for a good example to share with your children (if you have any in the future). I also think it’s a bad idea. There is a very important lesson to be learned here by the discomfort of his situation. If he were to be bailed out, that lesson would possibly be lost and the situation may occur again down the road. Call the credit card companies and get the rates lowered. It works…I’ve done it (recently). There are many articles available online that will walk you through the most effective way of getting the card companies to reduce the rates. Before you begin working on paying off your debt, make sure you STOP SPENDING MONEY. If you’re trying to pay off the cards and are still spending money on things that you don’t need to survive, you’ll just end up spinning your wheels.

Use this as an opportunity to really feel the impact of consumer debt, and make sure you never let it happen again. It also makes for a good example to share with your children (if you have any in the future).

]]> By: David http://www.moolanomy.com/1328/borrowing-from-relatives-and-getting-out-of-debt/comment-page-1/#comment-20350 David Fri, 13 Mar 2009 14:45:19 +0000 http://www.moolanomy.com/?p=1328#comment-20350 Hey guys, thanks for all your answers. I just wanted to clarify a few things that you had issues with and weren't clear in my questions. Also, I live with my father, so he has no worries of me running out on the debt. Plus I'm not that kind of person (a statement I'm sure everyone would say in my situation) The main reason he's doing this is so that I can pay off my debt at a reasonable interest rate and actually move out and move on. A) I understand that the loan is transferred to my father's secured credit line. I meant debt-free in that all my credit cards will be cut up and I will be paying the loan to him monthly and will eventually be debt free in a much shorter period than I could ever do on my own. Definitely did not mean debt-free immediately, although I can see how you could get that from what I asked. I also meant assume that from him in that I will be paying it off, not legally responsible for it. (He understands this risk) B) While I have been irresponsible in creating the debt, I've also always paid on time and more than the minimums and do have a very secure position at a job that makes a decent amount of money. (Which is why he was willing to make this offer) The payment structure I've worked out with my father pretty much equals what I'm paying in interest alone monthly currently. And as I get raises and make more money, the payments will increase. I only accepted his offer because I've decided to change my life and spending habits so that I can move forward and save money and eventually buy a house. If I can get out of that debt in approx. 30 months (which is what is going to happen) it will allow me to move on with my life much sooner than if I was stuck paying high levels of interest. C) I have asked about lower interest rates and even cards that had issued them to me had turned around and raised rates as of the end of January. This necessitated opting out on the few I could pay off before the card expired, but on others there was no way I could pay them off in that time period without help. Thank you for all your help in answering me. This situation definitely was my own doing and I'm lucky I have someone who can help me get out of it. This is a shock to the system, there will be no more credit card spending and my life will be cash/debit card only and will eventually be much better off for it. Thank you all again. Hey guys, thanks for all your answers. I just wanted to clarify a few things that you had issues with and weren’t clear in my questions. Also, I live with my father, so he has no worries of me running out on the debt. Plus I’m not that kind of person (a statement I’m sure everyone would say in my situation) The main reason he’s doing this is so that I can pay off my debt at a reasonable interest rate and actually move out and move on.

A) I understand that the loan is transferred to my father’s secured credit line. I meant debt-free in that all my credit cards will be cut up and I will be paying the loan to him monthly and will eventually be debt free in a much shorter period than I could ever do on my own. Definitely did not mean debt-free immediately, although I can see how you could get that from what I asked. I also meant assume that from him in that I will be paying it off, not legally responsible for it. (He understands this risk)

B) While I have been irresponsible in creating the debt, I’ve also always paid on time and more than the minimums and do have a very secure position at a job that makes a decent amount of money. (Which is why he was willing to make this offer) The payment structure I’ve worked out with my father pretty much equals what I’m paying in interest alone monthly currently. And as I get raises and make more money, the payments will increase. I only accepted his offer because I’ve decided to change my life and spending habits so that I can move forward and save money and eventually buy a house. If I can get out of that debt in approx. 30 months (which is what is going to happen) it will allow me to move on with my life much sooner than if I was stuck paying high levels of interest.

C) I have asked about lower interest rates and even cards that had issued them to me had turned around and raised rates as of the end of January. This necessitated opting out on the few I could pay off before the card expired, but on others there was no way I could pay them off in that time period without help.

Thank you for all your help in answering me. This situation definitely was my own doing and I’m lucky I have someone who can help me get out of it. This is a shock to the system, there will be no more credit card spending and my life will be cash/debit card only and will eventually be much better off for it. Thank you all again.

]]> By: Dawn http://www.moolanomy.com/1328/borrowing-from-relatives-and-getting-out-of-debt/comment-page-1/#comment-20349 Dawn Fri, 13 Mar 2009 14:39:49 +0000 http://www.moolanomy.com/?p=1328#comment-20349 I think this is a terrible idea, and here's why: back when I was young (and foolish) I used a loan to pay off my credit card debt. Suddenly I was no longer carrying a balance! It was wonderful! And you know what? Six months later all my credit cards had balances again - now I had balances PLUS a loan. Consolidating into one loan can be useful if you then go around cutting up all your cards and make a vow to not buy again until you pay it off, but in my opinion, the best thing to do is to use the other advice given (calling about rate reductions, snowflaking, snowball, etc.) to pay them down yourself. It is the only way you will ever stay debt free. You have to learn how to do it - the long hard way. I think this is a terrible idea, and here’s why: back when I was young (and foolish) I used a loan to pay off my credit card debt. Suddenly I was no longer carrying a balance! It was wonderful! And you know what? Six months later all my credit cards had balances again – now I had balances PLUS a loan. Consolidating into one loan can be useful if you then go around cutting up all your cards and make a vow to not buy again until you pay it off, but in my opinion, the best thing to do is to use the other advice given (calling about rate reductions, snowflaking, snowball, etc.) to pay them down yourself. It is the only way you will ever stay debt free. You have to learn how to do it – the long hard way.

]]> By: HisHersMoney http://www.moolanomy.com/1328/borrowing-from-relatives-and-getting-out-of-debt/comment-page-1/#comment-20346 HisHersMoney Fri, 13 Mar 2009 13:57:32 +0000 http://www.moolanomy.com/?p=1328#comment-20346 If you do go forward with having your Dad loan you the money you should look into whether your employer allows you to deposit your paycheck into multiple bank accounts. If they do you should set it up so that the amount you need to pay your Dad goes directly into his bank account. This way he will feel secure in knowing the money will be coming and you won't need to remember to send it to him each month. If you are paid weekly just divide the total payment up by four and have that amount deposited into his account. If you do go forward with having your Dad loan you the money you should look into whether your employer allows you to deposit your paycheck into multiple bank accounts. If they do you should set it up so that the amount you need to pay your Dad goes directly into his bank account. This way he will feel secure in knowing the money will be coming and you won’t need to remember to send it to him each month.
If you are paid weekly just divide the total payment up by four and have that amount deposited into his account.

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