Secure Your Future Before Assisting Others Reading the email message from Joann reminded me of the safety speech flight attendants give before takeoff. If I've heard it once, I've heard it a thousand times. " ... In the event of a loss of cabin pressure, an oxygen mask will automatically …Read more. Grab a Can of This Cheap Product to Get Out Ink Stains Dear Mary: HELP! I just pulled a load of dried, white clothes out of my dryer and discovered a blue ink pen was in that load. How do I get blue ink out of already dried white clothes? Thank you. — Jenny Dear Jenny: Go to the drug store and buy …Read more. Do It Yourself and Keep the Change One of the best ways to cut the cost of living is to learn how to do things you're presenting paying others to do for you. That could be anything from pool cleaning to landscape maintenance and pest control. Just be wise. Research first, and learn …Read more. Do It Yourself and Keep the Change One of the best ways to cut the cost of living is to learn how to do things you're presenting paying others to do for you. That could be anything from pool cleaning to landscape maintenance and pest control. Just be wise. Research first, and learn …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 email@example.com, 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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