In a previous entry, I
had decided to cash out assets (sell stocks and stock
options that are not in my 401k and pay off debt
(student loans, rent, car payments, etc.). This entry to
discuss my options. I have the money, but not enough to
pay off all of my debt (actually, no where near all of
my debt when you consider the mortgages and condo fees
and home owner association dues). Read through what I
have got and tell me what you think.
Debts:
1.) Student Loans ($150 per month; $12,000 total)
2.) Rent ($1,300 per month; $10,000 left on the lease)
3.) Car Payments ($550 per month; $30,000 left on the
lease)
4.) Small Claims Court Judgment ($12,000 - Condo Fees)
5.) Other (Mortgage Related... too much to even worry
about)
>>>
Go ahead and vote now if you like (Click
Here to Vote)
I have monthly expenses
for other things which cannot be paid in advance such as
utilities, gas and grocery bills and such. I have
already paid my car insurance for six months (All State
will only let me do six months at a time), and I have
already paid my Orkin exterminator contract for a year.
How much do I have in
cash available to pay these debts - about thirty
thousand dollars ($30,000). That is a chunk of change,
and I hate to cash out the stock and stock option
investments; but the banks and condo association will
probably seize them if I do not go ahead and cash them
out. The condo association is my most imminent threat of
seizing my assets as they already have a judgment
against me from the small claims court (which, at
$12,000, was not so small). The big question is what do
I pay off because I do not have enough to pay off
everything. Here are my thoughts on the situation.
The student loans could be paid off
in full. The problem with this is that the student loans
are already at a really low interest rate plus I only
pay about $150 each month. It would not cut my monthly
expenses very much. Still, I consider the student loans
my priority to pay off mainly as student loans are
exempt from bankruptcy - should I eventually decide or
be forced into bankruptcy.
The rent payment each
month of $1,300 is a chunk of change. Paying off this
debt would significantly reduce my monthly expenditures.
I love where I am living now, and I do not anticipate
leaving my lease early. I do, however, hate the idea of
giving the rental company so much money in advance.
Still, my rent payment is a significant monthly
expenditure.
The car payment each
month of about $550 is my next largest monthly
expenditure. I just started the lease in December 2007.
It is a great car, and I love it. Paying off the lease
(not taking ownership because that would make the car an
asset which could be sold in a bankruptcy because of all
of the equity). Of course, if gas prices keep going up
like they have been ($4.00 a gallon here on the
panhandle of Florida now), I might not be able to afford
the gas. Admittedly, gas could go a lot higher; and I
would still drive.
The judgment against me
from small claims court is about twelve thousand dollars
($12,000) and rising due to late fees and interest
charges. This small claims judgment is from the condo
association because I stopped making condo association
fee payments when I stopped making mortgage payments
back in November 2007. I really am not even considering
paying the judgment as I consider it part of the real
estate that will be going back in foreclosure
(eventually). The condo association may have taken me to
small claims court to secure their claim against the
real estate as I think they get their money whenever the
bank eventually sells the property. Of course, as evil
as the condo association is (and that is a whole
different story relating back to when Hurricane Ivan
destroyed the property in 2004 even before I ever missed
a condo association payment), they will probably take
that small claims court judgment and go after my bank
accounts directly which is why I do not want to leave
this money in a brokerage account or in a bank account
in my name - and I am not going to bring anyone else
into my situation if I can help it.
All of my other debts are
related to my real estate. Three of these properties are
going back in foreclosure. I see no sense in paying
anything towards catching up these mortgages and trying
to keep the property as none of them will even sell for
half price nowadays. The fourth house on which I have
not missed any mortgage payments has a $78,000 mortgage.
I have ruled out paying down this mortgage as that would
show up as equity which a bankruptcy court might force
me to sell and distribute the money to my creditors.
What do you think? Which
debts should I pay off? Add comments to the blog page (add
comments here) or
take a quick vote. I'll update vote results here
shortly.
so...
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