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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 12184
Experience:  Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
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Hi. I used justanswer before, and it really helped. So here

Resolved Question:

Hi. I used justanswer before, and it really helped. So here goes: I am hugely in consumer debt. While I got a great job and future retirement benefits, I need to dump this debt because my monthly net, after minimum payments and fixed payments, leaves me virtually nothing. (I can pay mortgage, utilities, food, etc). This debt is bothering me. Fortunately, I received 67,000 inheritance, net after taxes etc. I need to know the smartest way to use that money to reduce this debt as much as I can. Debits (not including mortgage that Im upside-down on), but mortgage payment is reasonable for my income.

-Credit card A: Balance 35,000. At 15% interest, except 2500 of it is at 0% till June 2014. Been paying $550 a month on it, but at that rate of payment it will take 20 yrs to pay it off.

-Credit card B: Balance 8,900. Zero % until May 2014. Been paying $100/mo.

Cash Loan 1: Balance 11,700 (original loan 50K). 3.125%. Fixed payment $900. Will be paid off December 2014. (but those damn monthly payments are so high).

Cash loan 2: Balance 21,300. 9.7%. Fix payment $500.

Car: Balance $5600. 4.89%. Fixed payment $310. Would be paid off in Dec 2014.

So monthly it's a total of $2360 in these loan payments monthly. My best course of action? Thanks!
Submitted: 12 months ago.
Category: Finance
Expert:  Megan C replied 12 months ago.

MyVirtualCPA :

Hello, how are you today?

MyVirtualCPA :

I'm sorry to hear of your situation

MyVirtualCPA :

The best thing for you to do would be to pay the $35,000 bill off once and for all - that's first

MyVirtualCPA :

Then, pay off the $11,700 loan, and that leaves you $20,300 to apply to the other cash loan that you have

MyVirtualCPA :

You will then only owe $1,000 on cash loan 2.

MyVirtualCPA :

Take the $900 per month you would have paid on cash loan 1, and apply it cash loan 2 and you will be paid off in one month

MyVirtualCPA :

Then, for the next few months apply what you would have been paying on these loans to your other debt. This will get your Credit Card B paid off in a little over 3 months

MyVirtualCPA :

and then your car will be paid off a couple months after that

MyVirtualCPA :

I hope this makes sense

MyVirtualCPA :

Do you have any questions?

MyVirtualCPA :

If you have no further questions, please rate my response as "excellent" so that I may receive credit for assisting you today

Customer:

No I believe that makes great sense, and I do appreciate it! Thx...

Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 12184
Experience: Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
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