help me help my sister with her debt

[StepRightUp]

Hey guys,

Got a question about my sister's situation:

She has racked up a CC bill of $5300 and 30% interest. Fortunately, she has just arranged the following with a debt relief program:

1. No payments for the next 4 months, no interest accruing.
2. After which, the payment plan will be $139/month at 6%

Her current financial situation:
$1800 a month in takehome
$1300 in savings

Monthly expenses of about $1,500.
Among other things, this includes the following debt:
Personal bank loan of $175/month at 11% $6400 total
Student loan of $105/mo $3600 total, don't know the interest rate
Car payment of $85/mo, $1500 total, don't know the interest rate

With some belt-tightening, she could save $300-400, possibly $500 a month for the next 4 months.

What should her plan be with that money? EF? Credit Card? Personal Loan? And from then on, how should she pay off her debts?

Thanks!

[LegHead1]

How much does she bring in a month?

Use all the savings, pay off the highest interest card/loan first. Then focus on the rest. Maybe get a second job?

Some serious belt-tightening and extra income are a huge factor in paying this off.

[StepRightUp]

thanks, Leg - I just edited the post - she takes home $1800/mo

[minnie1928]

I kinda like the idea of paying that car loan off, it's only $1500 which she should have pretty quickly. That would give her additional money each month, where as if she would pay the money towards the other items it wouldn't have any impact on her monthly cash flow.

Normally, I would agree with paying the highest debt first. But in this case, I think the additional cash flow would help more.

[Downfall]

I kinda like the idea of paying that car loan off, it's only $1500 which she should have pretty quickly. That would give her additional money each month, where as if she would pay the money towards the other items it wouldn't have any impact on her monthly cash flow.

Normally, I would agree with paying the highest debt first. But in this case, I think the additional cash flow would help more.

Plus the car loan is secured by the car (presumably). If she falls behind, better to have the car paid off and not have to worry about it getting repossessed.