Consolidating CC debt to HOme Equity LOC

[RedHotLama]

I've known my mom has had some CC debt, and i've tried to get her to talk about it in the past. She always seemed to have it under control, even though i knew it was a lot of $$.

So my mom finally gave me a call today to talk about it. Basically she wants to lower he monthly payment. As she needs a newer car, she spending hundreds each month to keep fixing her old one.

She said she has about 33k total in CC debt. A lot, i know.

The good thing is her house is paid off.

So the idea is to take all the CC debt and move it to the HELOC. Lower her monthly payment and get a new issue free car.

She also has not been adding to the debt. She has a CC she uses and pays off every month. The others that the dept is on have low interest rates <10%.

What your thoughts?

How can i help her out?

[creditcardfree]

It sounds like she may be living above her means, if she can't handle the credit card payments. She will be putting her home at risk if at some point in the future she cannot pay those payments.

However, if the plan is to move it to a HEL, purchase a car and then make a plan to start paying off the debt, then it may be a good idea. BUT only if she will pay off the debt.

All you can do to help her out is be supportive, you don't need to give her any money. You can help her set up a snowball to pay off the debt, too.

[RedHotLama]

It sounds like she may be living above her means, if she can't handle the credit card payments. She will be putting her home at risk if at some point in the future she cannot pay those payments.

However, if the plan is to move it to a HEL, purchase a car and then make a plan to start paying off the debt, then it may be a good idea. BUT only if she will pay off the debt.

All you can do to help her out is be supportive, you don't need to give her any money. You can help her set up a snowball to pay off the debt, too.

She did live above her means. The past couple years she has stopped and has stopped adding to the debt.

She can afford the payments, and now that she doesn't have a house payment it is better. The main thing though now is shes sinking money into a 20+ year old car just to keep it running.

By moving the debt she would be able to afford a newer car with low miles.

I will update the thread tonight with more info.

[arthurb999]

I wouldn't put unsecured debt to secured debt. Lower her means more and pay off the cc's. Do not let her finance a car... keep fixing the one she's got and start saving to buy one cash once she;s out of cc debt.

[blankcheck]

She did live above her means. The past couple years she has stopped and has stopped adding to the debt.

She can afford the payments, and now that she doesn't have a house payment it is better. The main thing though now is shes sinking money into a 20+ year old car just to keep it running.

By moving the debt she would be able to afford a newer car with low miles.

I will update the thread tonight with more info.

When was the house paid off? If she was used to living with a mortgage payment every month, and now she has none, then put the equivalent amount towards the CC debt. Alternaively, split the money between paying off the CC debt, and saving for an inexpensive utility car if the current one really needs to be replaced. The sacrafice, of course, would be that it won't be new, but if it runs better than the current one, who cares?

[RedHotLama]

The house finally got payed off i think the end of last year.

I have gathered some debt snowball spread sheets and am just going to walk through it with her.

[RedHotLama]

That is what i told her last night. Comparing the CCS to the Heloc it would save her about 1 grand, or 2 months of payments. It wasn't worth it. Even more so since she would be trading unsecured debt to secured debt.

This is what i found out,

Her Stuff

Chase 895.00 7.24% 17.00
HSBC 8,673.00 6.99% 134.00
Cap1 3,216.00 4.99% 44.00
AAA 1,500.00 7.74% 24.00
ATT 7,473.00 5.99% 112.00
GE Money Dental 200.00 0.00% 100.00 expires in a few months
BOA 362.00 0.00% 60.33 expires in oct
Chase 2 3,000.00 4.99% 59.00

Total of 530 in monthly payments
Pays 780 total towards debt, has about 100-150 in new charges on AAA for gas and prescriptions.
Told her to stop putting things on AAA, she has other cards available. Told her to only put things on a different card if she can pay it off every month. That way she saves herself the interest on new purchases.
So realistically she has about 680 a month to pay towards old debt.




My stepdads stuff in her name (don't ask, stupid situation)

© Discover 4,470.00 3.99% 90.00
© Chase 3 1,300.00 4.99% 31.00

Minimum Payments 121.00
Pays about 400 a month total, paying off Chase 3 first.




So for my mom i told her to pay the higher interest first and minimums on the rest (rounding off to $5)

So it would look like this.

Creditors in Original Total Interest Months to Month Paid
Pay-Off Order Balance Paid Pay Off Off
AAA 1,500.00 41.53 7 Oct-09
Chase 895.00 43.39 10 Jan-10
HSBC 8,673.00 887.22 28 Jul-11
ATT 7,473.00 1,013.09 37 Apr-12
Cap1 3,216.00 419.69 40 Jul-12
Chase 2 3,000.00 344.21 42 Sep-12
GE Money Dental 200.00 - 2 May-09
BOA 362.00 - 6 Sep-09




And for my stepdad

Creditors in Original Total Interest Months to Month Paid
Pay-Off Order Balance Paid Pay Off Off
© Chase 3 1,300.00 14.32 5 Mar-09
© Discover 4,470.00 141.56 15 Jan-10




Then once my stepdad pays things off, he should be helping pay off my moms debts at about 300 a month. Which will make a big impact. It would take the payoffs down to 31 months.

I also told her if she bought a newer car it would likely drag things out to 70+ months easily.

Also how can i make it so things are in columns?