Withdrawing from the 401k is a bad idea 99% of the time. I will take alot of heat for this advise but do the math, really. $6000 DMB at 29.9% $3500 FNAB at 19.9% $1300 Sears at 19.9% The money in your 401k is YOUR money. The $6000 at DMB will almost double in 3 years with interest. How much are you really going to make on the 401k. How it is invested in this economy could be argued until we are all blue in the face. I would take the tax hit now and pay off DMB at 29.9% The late payments are going to do what to your other balances, and your further credit? I know for a fact you can take the tax hit and be fine on the welfare situation. There are ways around this. I understand fully what you are saying and what you are going through. You are in a low income situation and need help and direction right now. I would take advantage to get rid of the DMB 29.9% balance right now. The tax advantage would not apply until you are 59.5 years old. You seem like you are still pretty young and can make alot of changes on life decisions in the future. Your kids and your lives are what matter most of all right now. When you are almost 60 are you going to be glad you didn't pay off a 29.9% balance with the late pays? You still have plenty of time to correct your past mistakes and get them behind you. I would take care of your past mistakes now and learn from them! After that of course go back to your 401k savings if you can. The interest rate goes both ways. In a low income situation the rule72 doesn't apply with some of the interest rates you are charged with. What is done is done. Take care of things now and learn from it! The present is more important than the future at 60 years old. The interest rate on your money now only applies to people that have set goals after they have everything figured out. It is great advise but it does not apply to this situation. The interest that adds up over time is more important than ANYTHING! Direct Merchants Bank is fully aware of it and should be taken care of first. After that you can make your own decisions. Hopefully back on the positive end. Your future decisions are more important than your past ones at this point. But PLEASE learn from it. Get back into a 401k after the 29.9% goes away. I feel this situation needs to be taken care of now. You can always learn from it and move on! 401k withdrawals should always be avoided in most situations. Just like a bankruptcy should be avoided the same way. I really do see this as a great opportunity to get this behind you and the ball can be in your court again.
"IF" you get a better deal for paying OFF the credit cards...FINE DO IT BUT don't forget about the fees and taxes And when you might need the 401k in the future it won't be there...
That is so true. 401K is for retirement. Savings accounts are for savings for rainy days. Why do you think they charge such hefty fees for taking money out of your 401k? Cause it is a retirement vehicle.
The last time mleichtle posted here was almost a month ago. He was at $6,000 with DMB at 29.99% and 12+ days late. DMB has made almost $150 in interest alone, plus lates, and maybe over the limits just since that time. Maybe even some more negative history. OUCH!
I'm guessing you don't have anyone who would loan you 10k or so to consolidate your loans at say, 10%? 1. Try to get a better rate consolidation loan and/or 2. Try to borrow against your 401k and/or 3. Withdraw the 401k and pay off DMB at the very least MOST IMPORTANTLY: Cancel the DMB card once it's paid in full. That way you can't run it up again (trust me, just do it and take away the temptation to run the card balance up again). Pay down the other cards as best as you can. STOP using them. Pay cash from now on, invest the rest, enjoy your children and put money and debt in perspective. Those credit cards and a high rate voluntary way to make yourself an interest slave. Use cards for convenience, for special rates etc.. otherwise, put them in the sock drawer and pay cash! You always have the oppy to bk, but you didn't mention that and I don't know how 401k balances relate to bks... so I'd hate to see you lose a car or 401k anyway... Good luck. And remember when they call... doesn't matter what they say or do, you're in charge.. you have the money!!!
Re: Re: Cashing in 401k to pay off debts dAMN < lBROWN, YOU HAVE SOMETHING TO SAY BUT NEVER SPIT IT OUT! I am listening but you must make it simpler. We are not all experts, spell it out. You have knowledge but don't give a real answer, just a sarcastic one. aND NO, i AM NOT A NEWBIE,have followed your posts for some time now. ginger2 | ================== Not sure I follow what you are saying here!??????? ????????????????????????????? THE END ** *** ** LB 59 """"```--~~~~~~~~~--```'""''' PS New Member Must Reads.--------------------------- http://consumers.creditnet.com/straighttalk/board/showthread.php?s=&postid=350770#post350770 http://consumers.creditnet.com/straighttalk/board/showthread.php?s=&postid=314910#post314910 http://consumers.creditnet.com/straighttalk/board/showthread.php?s=&postid=352826#post352826 Sample letters http://consumers.creditnet.com/straighttalk/board/index.php?s= WhyChats statute of limitations http://community-2.webtv.net/Y-chat/WhyChatsCredit/ http://community-2.webtv.net/Y-chat/WhyChatsCredit/ statute of limitations http://www.edebtnetwork.com/content/collection_laws.asp """"```--~~~~~~~~~--```'""'''
