Shrimp Sauce, Cloudy Glassware and Tire Inflators Dear Mary: Recently you gave us some fantastic recipes to make our own sauces at home ("It's All About That Sauce!") But you missed one! How about the shrimp sauce that only Japanese restaurants seem to have? Got a recipe for that? — Matthew …Read more. Every Home's Most Overlooked (Free!) Heating and Cooling Devices Who doesn't love learning about a money-saving tactic or investment that results in a net savings of thousands of dollars a year? I sure do! And I can count on maybe two fingers how many of those I've managed to deploy in my home in the past decade.… …Read more. Improve Your Life: Join a Group Every night my friend Mary Ann does the unthinkable. She sets her alarm for 4:30 a.m. because every morning she gets up and walks three miles while the rest of the world sleeps. How has Mary Ann managed to stick with this early morning fitness …Read more. Holiday Head Start During these lazy days of summer, Christmas is probably the farthest thing from your mind! With thoughts of vacation, finding ways to keep cool and big family get-togethers filling these summer days, the sounds of jingle bells and carolers out in …Read more.more articles
Which is Worse, Bankruptcy or Repossession?
Dear Mary: Which is worse, bankruptcy or repossession? There is too much negative equity in my car to sell it, and I cannot afford the payment since my husband passed away. The life insurance is not enough to pay all the bills plus the car. The finance company won't finance the negative equity so I can sell the car. Should I borrow the $12,000 from my 401(k), sell the car and pay the difference to the finance company? I really need help with this. — Bettie, email
Dear Bettie: I am so sorry to learn of your husband's passing. I can't imagine having to face financial problems and deal with unspeakable grief at the same time.
As for your question, bankruptcy is a lot worse than a repossession, not only for your credit score but for your personal feeling of wellbeing. A bankruptcy becomes a public record and a kind of stigma for life, even though it is reported to the credit bureaus for only 10 years. Repossession would be reported to your credit file for up to seven years, and that's it. You do need to understand that if you opt for a voluntary repossession, the finance company may sell your car to the first taker, then hold you financially responsible for the deficiency amount.
If you were to take a loan from your 401(k) to pay off the debt, that could actually boost your credit score because the debt would be reported "paid as agreed." While my advice would be to take that loan, please understand that if you were to leave your job for any reason before the loan was repaid, it would become due and payable.
Dear Mary: Do you recommend gold as an investment? We hear so much about that these days. — Diane, Arizona
Dear Diane: It is always wise to diversify your investments over a wide-range of sectors. Allocating 10 percent to 15 percent of your portfolio to precious metals stocks or exchange-traded funds (ETFs) makes good sense to me. The reason you're hearing so much about gold and silver these days is that the U.S. dollar has weakened to the point of being on a collision course, while the U.S. debt has reached nation-destroying levels. Many people see owning some amount of physical gold and silver as a way to protect their net worth and to create a hedge against inflation. It's something you might want to consider, but only after you've done your own independent research and due-diligence.
Do you have a question for Mary? Email her at firstname.lastname@example.org, or write to Everyday Cheapskate, P.O. Box 2135, Paramount, CA 90723. Mary Hunt is the founder of www.DebtProofLiving.com, a personal finance member website. To find out more about Mary and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.
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