Need some help with family financial crisis

[JohnCU]

Situation:
- I'm 21, first year senior in college, 2 more years to go, scholarships run out in a year
- Already have student loans that pay what scholarships don't, they are up around $20,000 or so now
- $8,300 in CC (3) debt, but making enough at my internship to have this down around $4,000 by the end of August
- CCs are in good standing, credit score is 640 because most of them are near being maxed out
- Mom was left in some amount of debt from my Dad who spent money like water. She won't tell me how much. I'm guess $20,000 - $30,000.
- I need a new(er) car because mine is about shot. It's been in 2 wrecks and the airbags are out. Probably only worth about $500. Wouldn't be a big deal if I didn't drive 120 miles everyday in the summer to work, and 260 miles (one-way) to school when I come home during the semester.

It is my fault that my CC is so high from spending money on girls and clothes and other useless, impulsive things, (okay, I use it for everything from gas to doctor bills to books for school, it's not ALL girls and toys) but I've cut back and am only spending what is necessary now.

We don't have the deed to our house, because my grandparents own it and think it's better that they keep it and pay the taxes and all this other stuff on it. I can coax them into giving the deed to us.

Would the best bet be to take out a mortgage and get everything paid off and consolidated? The property is commercial, worth alone about $125,000ish, don't know what the house is worth (1930's, old, needs remodeling).

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Locked at the request of the op.

AnandTech Moderator

 

[loup garou]

Sorry, no advice, but just wanted to let you know, these guys are going to rip you to shreds. Good luck.

 

[amdforever2]

Can grandparents give enough of a loan and you pay them back?

Rather than borrowing against the house from a bank?

 

[sonz70]

Good luck here man..its gonna be rough...



but..if you want to know an easy way to make money.... as long as your hot... there are things you can do....

 

[JohnCU]

Originally posted by: amdforever2
Can grandparents give enough of a loan and you pay them back?

Rather than borrowing against the house from a bank?

Possibly, but I'd rather not ask them that though, I don't want them to know how bad it is.

 

[Warthog912]

Originally posted by: JohnCU
Situation:
- I'm 21, first year senior in college, 2 more years to go, scholarships run out in a year
- Already have student loans that pay what scholarships don't, they are up around $20,000 or so now
- $8,300 in CC (3) debt, but making enough at my internship to have this down around $4,000 by the end of August
- CCs are in good standing, credit score is 640 because most of them are near being maxed out
- Mom was left in some amount of debt from my Dad who spent money like water. She won't tell me how much. I'm guess $20,000 - $30,000.
- I need a new(er) car because mine is about shot. It's been in 2 wrecks and the airbags are out. Probably only worth about $500. Wouldn't be a big deal if I didn't drive 120 miles everyday in the summer to work, and 260 miles (one-way) to school when I come home during the semester.

It is my fault that my CC is so high from spending money on girls and clothes and other useless, impulsive things, but I've cut back and am only spending what is necessary now.

We don't have the deed to our house, because my grandparents own it and think it's better that they keep it and pay the taxes and all this other stuff on it. I can coax them into giving the deed to us.

Would the best bet be to take out a mortgage and get everything paid off and consolidated? The property is commercial, worth alone about $125,000ish, don't know what the house is worth (1930's, old, needs remodeling).

honestly: the mortgage idea looks like the brightest bulb you have right now. Jeebus, $8000 dollars is a lot to spend on girls and impulses.

sounds like your grand parents might NEED to know how bad it is, maybe they would be willing to help out a little if they knew how dire it was.

 

[JohnCU]

Originally posted by: sonz70
Good luck here man..its gonna be rough...



but..if you want to know an easy way to make money.... as long as your hot... there are things you can do....

haha, I'm prepared for getting sh!t on for using my credit card, but I get up at 5 am every morning (m-f) and don't get home til 5 or 6 to pay it off.

 

[Warthog912]

Originally posted by: JohnCU

Originally posted by: sonz70
Good luck here man..its gonna be rough...



but..if you want to know an easy way to make money.... as long as your hot... there are things you can do....

haha, I'm prepared for getting sh!t on for using my credit card, but I get up at 5 am every morning (m-f) and don't get home til 5 or 6 to pay it off.

/Not to sound Condescending but you knew this was coming...

oh, OK, I get it now. SO, you 21 figure you have a good portion of your life to pay off the debt, so I can spend it all now, work long hours @a day job and pay it off eventually. I'm sorry my friend, but first hand experience tells me that if you want to pay 8k off your gonna have to either ebay a kidney, or work like a slave for several months. When I mean work like a slave, I mean work 12+ Hours a day M-F, while holding a Weekend job and getting minimal sleep. Life lesson learned, don't spend money you don't have. PERIOD.

 

[JohnCU]

Originally posted by: Warthog912

Originally posted by: JohnCU

Originally posted by: sonz70
Good luck here man..its gonna be rough...



but..if you want to know an easy way to make money.... as long as your hot... there are things you can do....

haha, I'm prepared for getting sh!t on for using my credit card, but I get up at 5 am every morning (m-f) and don't get home til 5 or 6 to pay it off.

/Not to sound Condescending but you knew this was coming...

oh, OK, I get it now. SO, you 21 figure you have a good portion of your life to pay off the debt, so I can spend it all now, work long hours @a day job and pay it off eventually. I'm sorry my friend, but first hand experience tells me that if you want to pay 8k off your gonna have to either ebay a kidney, or work like a slave for several months. When I mean work like a slave, I mean work 12+ Hours a day M-F, while holding a Weekend job and getting minimal sleep. Life lesson learned, don't spend money you don't have. PERIOD.

Except I make $20/hr during the summer and have a job as an EE waiting on me when I graduate, making the same or more. I figured that would hold me over but the damn debt keeps growing. Anyways, I asked for advice, not lecture.

 

[Warthog912]

Originally posted by: JohnCU

Originally posted by: Warthog912

Originally posted by: JohnCU

Originally posted by: sonz70
Good luck here man..its gonna be rough...



but..if you want to know an easy way to make money.... as long as your hot... there are things you can do....

haha, I'm prepared for getting sh!t on for using my credit card, but I get up at 5 am every morning (m-f) and don't get home til 5 or 6 to pay it off.

/Not to sound Condescending but you knew this was coming...

oh, OK, I get it now. SO, you 21 figure you have a good portion of your life to pay off the debt, so I can spend it all now, work long hours @a day job and pay it off eventually. I'm sorry my friend, but first hand experience tells me that if you want to pay 8k off your gonna have to either ebay a kidney, or work like a slave for several months. When I mean work like a slave, I mean work 12+ Hours a day M-F, while holding a Weekend job and getting minimal sleep. Life lesson learned, don't spend money you don't have. PERIOD.

Except I make $20/hr during the summer and have a job as an EE waiting on me when I graduate, making the same or more. I figured that would hold me over but the damn debt keeps growing. Anyways, I asked for advice, not lecture.

I understand this, but if you want advice, you DON'T come to OFF TOPIC. Your just asking for it.

 

[JohnCU]

Originally posted by: Warthog912

I understand this, but if you want advice, you DON'T com to OFF TOPIC. Your just asking for it.

lol yeah oh well i need to hear it i suppose.

 

[skyking]

What kind of income does your mom have? SHE won't get a mortgage without her having a steady job. Your summer work will not amount to a hill of beans in a lender's eyes. Forget even trying to apply that.

Anyways, I asked for advice, not lecture

Sometimes it comes off as a lecture, but he meant well and is totally right in this case.

If you cool your spending jets for a couple of years and get this thing together, you can start buying real property and things that appreciate over time. Then your money will start working for you, instead of the other way around.

 

[JohnCU]

Originally posted by: skyking
What kind of income does your mom have? SHE won't get a mortgage without her having a steady job. Your summer work will not amount to a hill of beans in a lender's eyes. Forget even trying to apply that.

Anyways, I asked for advice, not lecture

Sometimes it comes off as a lecture, but he meant well and is totally right in this case.

If you cool your spending jets for a couple of years and get this thing together, you can start buying real property and things that appreciate over time. Then your money will start working for you, instead of the other way around.

She makes around $50k a year and is a teacher. I don't know where it goes, but from the bill collectors calling it must a lot more debt than I can imagine.

 

[Pliablemoose]

Cut up your credit cards today, consider taking a semester off & working to get your finances under control.

Don't push your mom to take out a mortgage on the house, sounds like your grandparents are on the right track by keeping the title to the house.

You've made the first step by talking about your debit, now fix it...

 

[JohnCU]

Originally posted by: Pliablemoose
Cut up your credit cards today, consider taking a semester off & working to get your finances under control.

Don't push your mom to take out a mortgage on the house, sounds like your grandparents are on the right track by keeping the title to the house.

You've made the first step by talking about your debit, now fix it...

Why not a mortgage? Wouldn't it simplify everything?

 

[Warthog912]

Originally posted by: Pliablemoose
Cut up your credit cards today, consider taking a semester off & working to get your finances under control.

Don't push your mom to take out a mortgage on the house, sounds like your grandparents are on the right track by keeping the title to the house.

You've made the first step by talking about your debit, now fix it...

very good advice, I retract the statement above.

 

[chowderhead]

Originally posted by: JohnCU

Originally posted by: skyking
What kind of income does your mom have? SHE won't get a mortgage without her having a steady job. Your summer work will not amount to a hill of beans in a lender's eyes. Forget even trying to apply that.

Anyways, I asked for advice, not lecture

Sometimes it comes off as a lecture, but he meant well and is totally right in this case.

If you cool your spending jets for a couple of years and get this thing together, you can start buying real property and things that appreciate over time. Then your money will start working for you, instead of the other way around.

She makes around $50k a year and is a teacher. I don't know where it goes, but from the bill collectors calling it must a lot more debt than I can imagine.

Teachers have summers off, can she teach summer school or tutor kids during the evening. Maybe, she can do seasonal work during the summer to increase her income and pay off her debt faster. If creditors/collectors are calling, her credit is shot and she may have trouble getting good rates on any loans.

As for you, I would advise you to get that degree as quickly as you can. Don't worry about student loans until after you graduate and continue to pay down your cc debt as much as you can. Don't use your cc for any reason as it adds to your debt - always pay with cash.
Drive your car until it dies and get a beater for a couple of thousand - NOT new.

Best of luck.
Here is a GREAT thread on FW about someone who paid off their debt in 2 years.
must read for everyone in debt

 

[KLin]

Originally posted by: JohnCU

Originally posted by: Pliablemoose
Cut up your credit cards today, consider taking a semester off & working to get your finances under control.

Don't push your mom to take out a mortgage on the house, sounds like your grandparents are on the right track by keeping the title to the house.

You've made the first step by talking about your debit, now fix it...

Why not a mortgage? Wouldn't it simplify everything?

More money isn't the answer. Self-Control/managing your debt is the answer.

 

[JohnCU]

Originally posted by: chowderhead

Originally posted by: JohnCU

Originally posted by: skyking
What kind of income does your mom have? SHE won't get a mortgage without her having a steady job. Your summer work will not amount to a hill of beans in a lender's eyes. Forget even trying to apply that.

Anyways, I asked for advice, not lecture

Sometimes it comes off as a lecture, but he meant well and is totally right in this case.

If you cool your spending jets for a couple of years and get this thing together, you can start buying real property and things that appreciate over time. Then your money will start working for you, instead of the other way around.

She makes around $50k a year and is a teacher. I don't know where it goes, but from the bill collectors calling it must a lot more debt than I can imagine.

Teachers have summers off, can she teach summer school or tutor kids during the evening. Maybe, she can do seasonal work during the summer to increase her income and pay off her debt faster. If creditors/collectors are calling, her credit is shot and she may have trouble getting good rates on any loans.

As for you, I would advise you to get that degree as quickly as you can. Don't worry about student loans until after you graduate and continue to pay down your cc debt as much as you can. Don't use your cc for any reason as it adds to your debt - always pay with cash.
Drive your car until it dies and get a beater for a couple of thousand - NOT new.

Best of luck.
Here is a GREAT thread on FW about someone who paid off their debt in 2 years.
must read for everyone in debt

Thanks. She works summer school and tutors when they can afford to pay her, I'ma sit down with her and work out a budget.

But I think if we consolidated all our debt, payed it off with a mortgage loan and got a lower rate then it'd pay off in the long run, but maybe I'm missing something.

 

[chowderhead]

Originally posted by: JohnCU


Thanks. She works summer school and tutors when they can afford to pay her, I'ma sit down with her and work out a budget.

But I think if we consolidated all our debt, payed it off with a mortgage loan and got a lower rate then it'd pay off in the long run, but maybe I'm missing something.

well, if you are seriously considering a mortgage, think real hard. Your mom's credit is shot. She will not qualify for a good loan and will probably end up with either a subprime lender or someone with very high rates. Anyway moot point as the title is in your grandparent's name and they would need to sign title over to someone who has bad credit ... not very good idea, IMO OR get a mortgage in their names. If they have little to no income, it may be hard for them to get a mortgage.
If they are old enough, they can consider a reverse mortgage but those have high inital fee though the payments are generally tax free.

Why do you consider right now to be a crisis when it seems you have managed to limp along thus far? In 1-2 years, you should be able to get a good (hopefully) stable job in order to quickly pay this debt off.

 

[JohnCU]

Originally posted by: chowderhead

Originally posted by: JohnCU


Thanks. She works summer school and tutors when they can afford to pay her, I'ma sit down with her and work out a budget.

But I think if we consolidated all our debt, payed it off with a mortgage loan and got a lower rate then it'd pay off in the long run, but maybe I'm missing something.

well, if you are seriously considering a mortgage, think real hard. Your mom's credit is shot. She will not qualify for a good loan and will probably end up with either a subprime lender or someone with very high rates. Anyway moot point as the title is in your grandparent's name and they would need to sign title over to someone who has bad credit ... not very good idea, IMO OR get a mortgage in their names. If they have little to no income, it may be hard for them to get a mortgage.
If they are old enough, they can consider a reverse mortgage but those have high inital fee though the payments are generally tax free.

Why do you consider right now to be a crisis when it seems you have managed to limp along thus far? In 1-2 years, you should be able to get a good (hopefully) stable job in order to quickly pay this debt off.

Well, it's all building up, and the finance charges are growing, and it's worrying her to death to where she's drinking at night (not drunk but just enough to relax) to ease her mind. You know, getting the mortgage in my grandparent's name would get us a low rate...plus they have the capital and income to back it up...

You may have just solved the problem.

 

[Otaking]

Make a call to that chick you confessed to over the phone! :beer:

Maybe she will help you.

 

[KarenMarie]

can you get a second job? part time a few shifts a week?

Seriously, I know that the big thing now is debt consolidation and lower monthly payments but if you own the home and it has been paid off, I would never want to borrow against it.

Do you own it free and clear? Can you take a loan from the grandparents?

 

[JohnCU]

Originally posted by: KarenMarie
can you get a second job? part time a few shifts a week?

Seriously, I know that the big thing now is debt consolidation and lower monthly payments but if you own the home and it has been paid off, I would never want to borrow against it.

Do you own it free and clear? Can you take a loan from the grandparents?

No to 2nd job, already gone 11 to 12 hours a day now at current full time job. Part time job when school starts back that pays about $120 every 2 weeks. The house is paid for, and they own it...

 

[tfinch2]

Originally posted by: JohnCU

Originally posted by: KarenMarie
can you get a second job? part time a few shifts a week?

Seriously, I know that the big thing now is debt consolidation and lower monthly payments but if you own the home and it has been paid off, I would never want to borrow against it.

Do you own it free and clear? Can you take a loan from the grandparents?

No to 2nd job, already gone 11 to 12 hours a day now at current full time job. Part time job when school starts back that pays about $120 every 2 weeks. The house is paid for, and they own it...

LOL, why no to 2nd job? If you're really serious about making money and getting out of debt, you can work more. What about Saturday and Sunday? These are consequences you have to face and sacrifices you have to make for dumb mistakes...