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    Deferring a car payment?

    Does deferring a car payment hurt your credit score? I'm assuming it doesn't, but just wanted to be sure. I'm not too keen on the idea of doing it, but due to recent circumstances (work being slow because of the impending holidays) I'm behind on some bills (electric and heat, not cc's or loans) and it would give me a chance to catch up and start off January 2009 on the right foot. Being that I've never made a late car payment the fee to defer it is $30, so I was thinking it would be worth it... thoughts?

    #2
    I personally wouldn't do it. That $30 can go towards your electric or heat

    How far behind are you on your bills? Do you need to sell something, get a part time job.

    You probably should also be doing a budget as well.

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      #3
      How much is the loan? How much is the payment? Depending on wether I would sell or keep, I would cut cell phones, cable etc. to keep the car payment in tact.

      I think everyone should keep a little more defensive posture at this time. Dumping nonessentials is a good start.

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        #4
        So your paying your cc's and loans, but not your heat and electric?

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          #5
          Originally posted by mrpaseo View Post
          So your paying your cc's and loans, but not your heat and electric?
          I agree, OP needs to pay utilities before CC's.

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            #6
            Oh and to answer your question, yes it does damage your credit score. Not only that, but if you "Skip" a payment and pay a payment every month after that, every single payment you make will be late.

            If you were in derperation you might be able to call them an allow you to pay only the interest for a month, though I have only heard of this working on credit cards.

            I agree with the others, sell something, sell everything, pay off your bills adjust your living to live below your means get on a a budget, snowball your bills, save an emergency fund, invest and live prosperiously.

            Ray

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              #7
              Well, the car payment is $300. We've already cut all nonessentials, have no cable at all, and the internet we use is because our neighbor friend gave us the password to his wireless connection and we babysit his dog for free when he goes away, so we don't have either of those expenses or any other luxuries. I work a nice professional job by day and at a fast food place on weekends and some evenings (hey, it's extra money!!) to make ends meet. Due to my husband's health issues he hasn't been able to work the last year or so. His health costs are absolutely insane and we haven't been able to get any help for them, so I'm doing the best I can.

              I let the heat and electric go because I figured with the penalties on credit cards, upping the interest rate, whatever else they do when you miss a payment, etc., it would be in my best interest to pay those first and then the electric and the heat when I have the money because the interest on the late things for those is maybe 1.5% or so. The back electric bill is roughly $150 and the heat is about $200. I've been paying what I can when I have it so that it's not in danger of it getting shut off.

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                #8
                Okay, I just read your blog. If the bank offers you the derfement for the holiday season (My Credit union does this), you are good to go. It will not hit your credit. Though I do not know about the fee. My credit union does not charge a fee.

                You should be good to go, it would not hurt to call the bank and ask them the ramifications. They do it as a fvor to the customer during the holiday season, what it actually does is gets an extra months worth of interest out of your.

                So, if your vehicle payment is 500 dollars per month and half of that goes towards interest, you are effectivly making your loan one month longer. The month that you "Skip" the payment, the interest still grows. That said, expect to pay double interest next month.

                The only plus is, you get to take a short breath inbetween owing someone the money.

                Good luck,
                Ray

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                  #9
                  Would it help to put your utilities on a total 12 plan? Our REC lets us pay an equal amount every month ($175) every month, based on our total yearly usage. It really makes budgeting for electricity easier.

                  I read through you past blogs- I'm sorry for what you've been going through. Maybe deferring the car payment for one month isn't such a bad idea after all, being that your bank is allowing you to do that. Looking ahead, though, will that $30 fee be hard to come up with in January?

                  Will you be getting any money from family for Christmas? Maybe you could use that money to help catch up, too.

                  Is there some sort of work your husband can do from home to help bring in some income?

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                    #10
                    Originally posted by nomorecredit View Post
                    Well, the car payment is $300. We've already cut all nonessentials, have no cable at all, and the internet we use is because our neighbor friend gave us the password to his wireless connection and we babysit his dog for free when he goes away, so we don't have either of those expenses or any other luxuries. I work a nice professional job by day and at a fast food place on weekends and some evenings (hey, it's extra money!!) to make ends meet. Due to my husband's health issues he hasn't been able to work the last year or so. His health costs are absolutely insane and we haven't been able to get any help for them, so I'm doing the best I can.

                    I let the heat and electric go because I figured with the penalties on credit cards, upping the interest rate, whatever else they do when you miss a payment, etc., it would be in my best interest to pay those first and then the electric and the heat when I have the money because the interest on the late things for those is maybe 1.5% or so. The back electric bill is roughly $150 and the heat is about $200. I've been paying what I can when I have it so that it's not in danger of it getting shut off.

                    I am sorry for sounding cold in my other posts, it seems you are doing the best you can all things considering. One thing I wanted to point out, if you do not pay your utilities, it does not affect your credit score. I understand your logic, and truthfully, if I was in your shoes, I would probably be doing the same thing.

                    I know it is going to be hard but you need to get ahead of your bills since you have different pay checks month to month. What I would try to do is put every check I get in the bank, then figure out what the average is over the year. I would then take the average from the bank acount and learn to live on that.

                    If we knew all your bills we might be able to give some advise. I do wish the best for you and your husband. It must be getting cold in NY though, do not wait to long, you do not want to be sick. Pick a temperature and do not let your house go below that (Something like 55-58 degrees or something) above all, do not let it get to freezing (32 deg), you do not want your pipes freezing as they might burst.

                    Again, good luck,
                    Ray

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                      #11
                      Oh yeah, I probably should have said in my first post that I got a letter yesterday from the bank that holds my car loan as a "holiday deferment" or whatever... it wasn't a matter of me soliciting them. It wasn't something I even considered before until I read the letter.

                      Ray, I didn't take your posts as cold, given when I wrote in my first post you had you idea if I was spending $100 on cable or other nonessential stuff

                      I'm hoping my Christmas bonus check is going to be enough to really get us current on things! Last year it was around $800 which would be awesome, but I don't want to count my chickens before they hatch, so to speak. And hopefully a raise in January to follow. *crosses fingers*

                      I just turned the heat on yesterday up to 60. It's really not that bad if we wear sweaters and things like that. I know the guy who lives downstairs cranks his heat up really high (so high that whenever I see him he's wearing shorts, even in the winter!!) so with up being upstairs I have it in my head that his heat cranking ways makes our place a little warmer

                      My husband has been feeling a smidge better and was thinking of looking for a part-time job. I know with the job market it's going to be hard, especially with him having to explain why he hasn't worked since October 2007

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                        #12
                        You should sell the car since you can't afford it. Buy a $1000 to $2000 car with cash.

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                          #13
                          Originally posted by KGeary View Post
                          You should sell the car since you can't afford it. Buy a $1000 to $2000 car with cash.
                          I don't have the cash to do it and probably wouldn't make enough on selling it to pay it off AND buy a new vehicle. It will be paid off in a year though and I plan on driving it into the ground after that.

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                            #14
                            Originally posted by nomorecredit View Post
                            I don't have the cash to do it and probably wouldn't make enough on selling it to pay it off AND buy a new vehicle. It will be paid off in a year though and I plan on driving it into the ground after that.

                            It's not uncommon, depending on how much you owe, to talk to your bank about financing the difference between what you owe and a few extra thousand, so that you can sell your car and buy a beater.

                            This can result in a much lower debt load. The fact that you are upside down, is irrelivant. It's an reasonable option.

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                              #15
                              When I had my car payment if I was having financal issues I would defer my payment around the holidays. You have to do what's best for you. Sometimes things come up that you have no control over and if you happen to get a break I think you should take it. But start to work on an EF so that everything that happen in your life don't become an emergency. Good luck.

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