Whose Kids Know How to Turn Off Lights? I got a good chuckle when I read today's first reader tip from "Dad." For a split second there, I could hear my own father asking the age-old parent/child question: Don't you know how to turn off the light when you leave the room? MOTION SENSOR …Read more. Of Pet Accidents and Malfunctioning Keurig Machines Dear Mary: I saw in your column a long while back an article about the carpet scrubber (was it Bissell?) and poo-pooed it at the time. Now I am ready to cry UNCLE since I discovered to my horror that one of my cats was shut in a bedroom and peed on …Read more. The High Cost of My Bad Habit I did something really dumb that cost me $750. It's so dumb that I'm a little embarrassed to even tell you about it. That was the price tag on my fancy-schmancy progressive eyeglasses. I went for the pricey frame and all the bells and whistles …Read more. Even Small Households Can Save Big at Warehouse Clubs It's been several years now since my husband and I first began talking about relocating to another state. At first it was only a dream, but soon idle chatter turned into serious talk. That developed into a list of "must-haves" — things a new …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.
COPYRIGHT 2011 CREATORS.COM