Opinions on debt payoff/consolidation

[badluckstreak]

I have now been laid off almost 8 weeks . I feel it will be necessary to move, but also to take a low paying job, about $11 an hour. I need to lower my bills to make it safely. Here is my current situations:

$4000 on a cc, I had a medical situation since getting laid off $80 monthly
$5400 on gov. loan $59 monthly
$10,200 on car loan. $351 montly
$7000 in the bank.
Total monthly= ~$490

Now $11 an hour equals about $350 weekly bring home.

I don't like that I have this much on the cc, but I have no med. insurance and had a big bill. My interest rate was 7.9 but after putting something on the card they say it will raise to 17.9! I have until July 28 to choose on paying it off or locking it out. I need to get rid of the car payment to move and pay my bills. I don't want to live on the edge. I know this is not the best thing to do but these are the only options I can see:

1. Lock out the card pay ~$6000 on the car and transfer the rest onto my other cc. It would put me at 67% of the limit of the card, it is a zero percent interest until August 2010 deal, $100 transfer fee. I am positive I can pay it off in 1 yr. Not the greatest thing for my credit, but big monthly savings.

2. Number two is pay off the card, use the extra $$ to pay on the car, and transfer the remaining car loan between two cards, the one above and the one I am paying off. The one I would payoff has o% and no transfer fee for 6 months. I figure I can put $5500 on the other card and $3000 on this one, and pay off as much as possible in the next 6 months. Better for the credit, but more risky on paying interest in the long run.

3. I could pay off the cc, and keep the rest in the bank for safety. That leaves me with a little back up money, but I will be living on the edge when it comes to rent+food+gas+insurance+the above expenses. Another med. problem and it could all be over.

FWIW I will save $1100 on paying off the car now. So if my cc interest/transfer fee do not exceed that I am loose nothing on this.

Make sense? What would you do? So far I see no other opportunities for work jobs are just not there anymore. I have to take something, I don't care if it is in my "field" or not.

[boosami]

Choice #1 sounds like the best out of the options you've proposed. What's the plan after making the first step? Where will you stand if you run out of money in the bank and have to live off the $350/mo? If you post the rest of your budget/bills, I'm sure folks will be able to weigh in on other ideas for cutting costs.

[badluckstreak]

That would be $350 weekly not monthy . The hope is I can push my pay up quickly there, or find another job paying more in the area after awhile.

My car insurance is about $60 a month, but I count on it going up a little everything else has. So currently figure solidly $550. Groceries, gas, and rent are my only other bills. Figure about $900-1100.

So with that said my current bills would equal about $1450-1650 monthly when I moved and my income would be about $1520 after tax. Option 1 would save me $268 monthly if I had to pay the min. Option two would save more like about $220-230, but with possible extra interest in the long run.

To me option three seems like tossing money down the toilet to play it safe.

[maat55]

Personally, I would look at selling the car and buying a beater, then payoff as much of the cc as possible. This would free up roughly 400 per month.

I passed up a chance to buy a good small car this weekend for 450 that needed roughly 300 in work. Would have been a good car for less than 1k. I had no use for it, but in your possition, I would have jumped on it.

400 extra can payoff debt and save to pay cash for another car shortly down the road.

I would have a job before doing so, leaving the 7k as an EF in the shorterm.

[badluckstreak]

Something things to consider:

My car is under 3 years old

The low cost of insurance

The fact it gets 40mpg highway.

That beater won't save me much on insurance and will likely cost more on gas, and if it breaks down I will be hurting. I won't have anybody to cover my back, no relatives/friends who can come to my rescue and get me to work.

The car is not paid off so if I pay it down to sale value and buy another car I am also going to be roughly equal in cost.

Better to keep the car I have.