Need financial debt advice(paying off)

[Common]

Ya, don't get the loan before the cars are sold. We're on the same page, I think. Say he sells car 1 for $24,000 and car 2 for 15,000. He'd get a personal loan from his bank for $4,500.00 to cover the difference so he could release the titles. At that point, he'd apply his car payment sized payment (at least $1,200.00) to the smallest debt and knock it out real quick, while making minimum payments on the other two. Once one is knocked out, go to the next. This route, he's debt free in less than a year.

This is common sense here to tell you you make zero sense, again.
Card#1 $9,000
Card#2 $5,000
Loan to cover the assumed negative equity = $4,500(which is WAY optimistic but I'll bite)

That is $18,500 of debt in small loans and no car payments any more. Dedicating $1,200 per month to this debt will get him out of it at 15 to 18 months depending on the interest amortization is on the loans.
Not to mention he now has to come up with funds for other transportation etc etc etc.....


According to your flawed math he will be now 18,500$ in debt, at 1,200$, he will be debt free in 15 months(AT MOST OPTIMISTIC BEST WAY) which happens to be well over a year. Your blind optimism is nice but wrong. He will not be out of debt in "months"......:rollseyes

 

[thomas91169]

This is common sense here to tell you you make zero sense, again.
Card#1 $9,000
Card#2 $5,000
Loan to cover the assumed negative equity = $4,500(which is WAY optimistic but I'll bite)

That is $18,500 of debt in small loans and no car payments any more. Dedicating $1,200 per month to this debt will get him out of it at 15 to 18 months depending on the interest amortization is on the loans.


According to your flawed math he will be now 18,500$ in debt, at 1,200$, he will be debt free in 15 months(AT MOST OPTIMISTIC BEST WAY) which happens to be well over a year. Your blind optimism is nice but wrong. He will not be out of debt in "months"......:rollseyes

True, but youre working within the debt $$$ he gave you, not his total income. 15mo to get out of debt fully just working within the confines of what he has cleared up payment wise is pretty good. Just think if he has more $$$$ outside of that to throw at it.

Cant really forecast it without knowing what other additional funding he might be able to throw at the debts.

 

[Common]

Thanks again for all the advice. After reading everyone's thoughts, I'm leaning toward trying to get rid of car#1. The wrench in the engine is we are PCSing to Germany from the states in 3-4 months. So, income will change until my wife finds a job over there. Plus, her car being a better winter car, I'd rather her keep her car and me drive the beater.

You have no reason to panic. I don't know your income status but your credit cards are not nearly as brutal as most I see. If you can't get rid of cars for a payoff or damn near close to it, stay with them for the time being and pay off the smallest card first.


Here is another scenario you might like a lot.

How about you trade your cars in on cheaper cars, cars with 10k to 15k(each) in value. Since it's hard to walk into a dealer and have them just pay off your loan without you being "in" with them for something else or another sale. You trade the more expensive BMW to the dealer for something cheaper(say a 2009 nissan sentra or versa) which can be had for 12 to 14k and tell the dealer the only way deal will work is to pay off your vehicle you are trading in on the nissan(or whatever you choose).

I have seen a person do this and it worked well for them. Traded in a C6 for a Malibu and he was breathing a lot easier for a while.

What are the miles on the cars if you don't mind?

 

[thomas91169]

Here is another scenario you might like a lot.

How about you trade your cars in on cheaper cars, cars with 10k to 15k(each) in value. Since it's hard to walk into a dealer and have them just pay off your loan without you being "in" with them for something else or another sale. You trade the more expensive BMW to the dealer for something cheaper(say a 2009 nissan sentra or versa) which can be had for 12 to 14k and tell the dealer the only way deal will work is to pay off your vehicle you are trading in on the nissan(or whatever you choose).

I have seen a person do this and it worked well for them. Traded in a C6 for a Malibu and he was breathing a lot easier for a while.

What are the miles on the cars if you don't mind?

Wont they just throw the negative equity on the car hes buying?

IE if he owes $26k on the one car, trades it on for $20k since thats what its worth, buys a $12k car, theyll just put that $6k negative on top of the $12k car.......and now you owe $18k on a car thats probably only worth $10k the second you drive it off the lot.

 

[Common]

True, but youre working within the debt $$$ he gave you, not his total income. 15mo to get out of debt fully just working within the confines of what he has cleared up payment wise is pretty good. Just think if he has more $$$$ outside of that to throw at it.

Cant really forecast it without knowing what other additional funding he might be able to throw at the debts.

Throw in another $200 on it and it's still not "months", its more close to a year or over. You gotta consider this man might not want to live off of crackers for the time being.

 

[Planter]

i have 2 credit cards, one with a $1500 limit and the other with a $500 limit. i never ask for an increase, and i never carry more than a balance of $1000 on either card combined.

currently i have 8.9% interest on the one with $500 limit, and 10% interest on the one with $1500 limit.

I have $800 charged up on the $1500 card, and $50 on the $500 card and that's as far as it goes.

rule of thumb is don't spend more than what you can pay back. i try to pay cash for everything (my truck is paid for, my vacation getaways are paid for in cash, my rent is paid up front 6 months in advance), and the only debt other than my $800 in credit card is student loans.

living debt free is so much nicer and rewarding than being miserable and having to owe everyone money all the time.

 

[Common]

Wont they just throw the negative equity on the car hes buying?

IE if he owes $26k on the one car, trades it on for $20k since thats what its worth, buys a $12k car, theyll just put that $6k negative on top of the $12k car.......and now you owe $18k on a car thats probably only worth $10k the second you drive it off the lot.

No, like I said, you tell them you need to be free and clear of your current loan to make a comitment to their deal. Otherwise it's redundant. His cars can't have that much bad equity in them btw, unless he really racked up the miles.

 

[thomas91169]

Throw in another $200 on it and it's still not "months", its more close to a year or over. You gotta consider this man might not want to live off of crackers for the time being.

boiled chicken+minute rice works too.

I knew a guy at my old work that was $65k in misc debt, spread over multiple cars, loans, etc. Did just that, paid off smallest to largest, really downsized their budget (to where he said seriously hed buy 4-5 boxes of Ramen noodles) and worked to get his debt alleviated. Took him almost 3 years iirc.

Then everything he missed, if he missed bad enough, they would save up and buy in cash. IIRC he bought his truck back in cash, and ended up owning it outright sooner than it wouldve been had he continued paying on it until it was fully his.

 

[Common]

boiled chicken+minute rice works too.

I knew a guy at my old work that was $65k in misc debt, spread over multiple cars, loans, etc. Did just that, paid off smallest to largest, really downsized their budget (to where he said seriously hed buy 4-5 boxes of Ramen noodles) and worked to get his debt alleviated. Took him almost 3 years iirc.

Then everything he missed, if he missed bad enough, they would save up and buy in cash. IIRC he bought his truck back in cash, and ended up owning it outright sooner than it wouldve been had he continued paying on it until it was fully his.

OP's cars might actually fetch what he owes if he knows how to work a deal.
I did some numbers on KBB trade in's with assumed average mileage and he would break even just about.

So trading that 135 in on a $300 a month (altima, sentra, or whatever) might be the best solution which allows him to have headache free newer cars with payments half the amount. He can apply the difference to his cc debt and work from there.

Its mental, you cant assume his wife or him can just from BMW to $1,500 craigslist specials which may be a MONEY pit down the line, added headaches and undeeded stress.

 

[ViciousJay]

how do people get into this kinda debt?!

 

[thomas91169]

nah, id keep in the $4-5k range.

then again everyone around here has had AWESOME success with $1500-$2000 late 90's early 00's dodge neons as beaters, spend $100 on maintenance. I will probably pick one up soon, their power makes me want to stab myself with a dull butter knife, but reliability and cheap parts helps.

 

[SM0KE]

True, but youre working within the debt $$$ he gave you, not his total income. 15mo to get out of debt fully just working within the confines of what he has cleared up payment wise is pretty good. Just think if he has more $$$$ outside of that to throw at it.

Cant really forecast it without knowing what other additional funding he might be able to throw at the debts.

I really wouldn't pay much attention to what that guy has to say. He'll be a slave to payments his entire life.

The OP has figured out he's living outside his means and is fixing the situation by being smart and getting out of debt. I'm sure he'll find more money in there somewhere (hell, have a garage sale to make $1-2K) to throw at it. Assuming he and his wife make anything north of 50K/year, there's no reason they couldn't have this completely knocked out in less than 10 months and still live fairly comfortably.

 

[kball]

You have no reason to panic. I don't know your income status but your credit cards are not nearly as brutal as most I see. If you can't get rid of cars for a payoff or damn near close to it, stay with them for the time being and pay off the smallest card first.


Here is another scenario you might like a lot.

How about you trade your cars in on cheaper cars, cars with 10k to 15k(each) in value. Since it's hard to walk into a dealer and have them just pay off your loan without you being "in" with them for something else or another sale. You trade the more expensive BMW to the dealer for something cheaper(say a 2009 nissan sentra or versa) which can be had for 12 to 14k and tell the dealer the only way deal will work is to pay off your vehicle you are trading in on the nissan(or whatever you choose).

I have seen a person do this and it worked well for them. Traded in a C6 for a Malibu and he was breathing a lot easier for a while.

What are the miles on the cars if you don't mind?

We would definitely need to have replacement vehicles if we sold both. Plus, the military only pays for one vehicle to get shipped to Germany. I will have to pay out of pocket(around $1,000) to ship the other. Also, would it be wiser to try to sell over there in Germany versus here in the states if I went that route?

Car#1(2008 135i) has 25K miles
Car#2(2005 330xi) has 85K miles

 

[Jomo1994z71]

Sell the cars, go from there...shouldn't be even a hesitation...

 

[SM0KE]

how do people get into this kinda debt?!

By following advice from people like Common (If I can afford the payment, I can afford it).

 

[SM0KE]

sell the cars, go from there...shouldn't be even a hesitation...

+1

 

[Common]

We would definitely need to have replacement vehicles if we sold both. Plus, the military only pays for one vehicle to get shipped to Germany. I will have to pay out of pocket(around $1,000) to ship the other. Also, would it be wiser to try to sell over there in Germany versus here in the states if I went that route?

Car#1(2008 135i) has 25K miles
Car#2(2005 330xi) has 85K miles

It would be a bad deal to sell them there. Germans in general look at US bmw's as inferior for some dumb reason. I was there for a little bit back in 08 and learned this. Conversion rate, difference in odometers and other factors might limit your pool of people that would purchase your BMW's there to a REALLY small number.

Take my advice, go shop them around, it's easiest way to do it and to adjust to. You will still have newer vehicles(minus the brand and huge payment) and you will have FEW hundred dollars extra to work towards that cc debt.

Make sure NOT to roll the negative equity of the BMW's into the next car loan because that it dumb and moving in circles then.

Reason I am telling you this route is because it's realistic, least complex and requires least time and doesn't make you and your wife feel like shit rolling in TOTAL shitcans for vehicles for the next year or two(which can add to your financial difficulty if they start breaking down, which is likelly for cheap old cars). This btw, can cause tension between you and your wife as do HARSH and abrupt financial changes always do. You are not getting killed on interest on ANY of these loans, no need to stress yourself this hard and have RADICAL changes like LOAN money just to pay off the cars.



Work smart, not hard.

PS. Poster under the name "SMOKE" doesn't know where his head is from his anal cavity so don't pay much attention. He allegedly accepted and financed a vehicle at 13% interest rate.....so....:lol:

 

[Common]

By following advice from people like Common (If I can afford the payment, I can afford it).

:lol:

Child please. My cobra was paid for in cash unlike yours and I didn't loan money with 13% interest to finance a ****ing Dodge Dakota, like you did, you epic failure. You dishing out financial advice is like Michael Vick offering to run an Animal Shelter!

 

[kball]

It would be a bad deal to sell them there. Germans in general look at US bmw's as inferior for some dumb reason. I was there for a little bit back in 08 and learned this. Conversion rate, difference in odometers and other factors might limit your pool of people that would purchase your BMW's there to a REALLY small number.

Take my advice, go shop them around, it's easiest way to do it and to adjust to. You will still have newer vehicles(minus the brand and huge payment) and you will have FEW hundred dollars extra to work towards that cc debt.

Make sure NOT to roll the negative equity of the BMW's into the next car loan because that it dumb and moving in circles then.

Reason I am telling you this route is because it's realistic, least complex and requires least time and doesn't make you and your wife feel like shit rolling in TOTAL shitcans for vehicles for the next year or two(which can add to your financial difficulty if they start breaking down, which is likelly for cheap old cars). This btw, can cause tension between you and your wife as do HARSH and abrupt financial changes always do. You are not getting killed on interest on ANY of these loans, no need to stress yourself this hard and have RADICAL changes like LOAN money just to pay off the cars.



Work smart, not hard.

PS. Poster under the name "SMOKE" doesn't know where his head is from his anal cavity so don't pay much attention. He allegedly accepted and financed a vehicle at 13% interest rate.....so....:lol:

So tell the dealer to pay off whatever negative equity is left and start "free and clear" on the car I would be buying...is that correct? What about the moving to Germany thing in a few months? As far as having to fork out $1,000 to ship the second car over there? Should I just try to trade in both for one car? And then just buy something when I get over there?

 

[SM0KE]

:lol:

Child please. My cobra was paid for in cash unlike yours and I didn't loan money with 13% interest to finance a ****ing Dodge Dakota, like you did, you epic failure. You dishing out financial advice is like Michael Vick offering to run an Animal Shelter!

You're gonna run w/ that for as long as you can, huh!? :lol: According to you, I'm lying about the whole thing! All I can say is I was a dumb 18 year old. Lesson learned. However, I've paid over 34K in debt off in 13 months, by living on a budget and within my means. Now, I have zero debt aside from my house. And will have a paid for house soon. Call it what you want, bud. You're the one telling him to get another 5 year note on another car.