Trying to pay off debt.....

15 years ago

My husband was in a nursing home with Alzheimer's. I used the lion's share of his retirement plan to pay for his care. Which I would do again in a heart beat.

I bought a less costly home and then put my former house on the market. Thinking I would have $$ from the sale to use for my debt. Two months later was when the housing market fell.

My first mistake was to buy the "new" (older) house using a home equity loan on the house I was going to sell. Then it took 11 months for that house to sell and at a $28,000 loss. I had to accept that offer because I then owed taxes on the two houses I owned. I soon realized that I should have gotten a mtg on the "new"

I paid off the equity loan as soon has I sold my former home.

I now have no retirement plan and live on SS. I have $16,000 in debt. Part of that was a purchase of a new air conditioning/heating unit. That is a 12 month no interest plan. I am paying that. That means I can pay a few dollars above the minimum on the two credit cards.

I want to sell what I can to pay off that debt.

Being a widow I am hesitant to list on craigslist. I am willing to sell all my furniture, except my bed and a chair to sit in....while I twiddle my thumbs. LOL

How do I go about selling what jewelry I have. It's not a huge about, but every dollar will help.

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Comments (12)

plantmaven
Original Author
15 years ago
I forgot to mention that my pickup is a 2003 and I need it to go to doctors etc.
I do not eat out at all.
I have never been in a position like this and have no clue how to handle this.
sherwoodva
15 years ago
Plantmaven, my heart goes out to you. I am sorry for the loss of your husband. If you live in an urban area, you can take photos of your furniture and show the photos to the managers of local used/antique furniture stores. That was how we got rid of two 50s lamps.

If you don't have any luck there, find a friend who will come over to be with you when someone comes in response to your CraigsList ad. Sell for cash only, and only to someone who can come in person to pick up the item. Post a good photo and describe the dimensions, etc. of the item.
Sorry, I can't help with selling jewelry, but I do know gold is at a high price these days.

If you are into gardening, you might be able to earn $$ by helping people design their landscaping or select their plants. You can also grow and sell plants at neighborhood yard sales.

There are other ways to earn a bit of money. My step mother works several days a week, staying with a man who needs to be reminded when to take his many medications. His wife still works, hence the need for someone to be with him during the day. Some people tutor students in the evening and on weekends. Just some ideas.

Best wishes to you.
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Here goes with my financial advice. I believe it's simpler than it sounds and just requires you to get your interest rates from all of your accounts in order to make your choices. First suggestion: do as celticmoon suggests and fix that $515K first mortgage immediately! As I'm sure you're aware, the fixed variable rates of now are worse than a year or two ago, but much better than the 12-19% that they were in the past. In my opinion, fix it now and pay for any closing costs out of your savings, which is presumably earning the worst interest rate. Speaking of....what savings rate is your $15K earning? If it's less than 9% (almost a sure bet), and you have liquidatable cash in assets (which you say you do) to cover an emergency fund, then using that cash to invest in your house is giving you a 9% rate of return in your house investment, which is far better than the 3-4% of a typical savings account. If you choose not to do that, then I present my second suggestion (which I still think you should consider, w/ or w/o the $15K in the equation) DH and I just went through a similar process, although with one house, and we paid off a motorcycle and a timeshare (each at ~9%), rather than CC debt. This plan mirrors our own, with different dollar amounts: Roll both HELOCs into one and LOCK your rate up now. In my opinion, it's only going to go up. You should be able to get a much better rate with a higher consolidation balance (we got 7.5% by consolidating our two loans along with our original HELOC). 65K + 30K = 95K = 11.9% of the first house or 19% of the second house. If you keep your loan:value ratio below 20%, you'll get a better deal on rates. You may even ben required to keep it below 20%; I'm not sure. Keep thinking about that. The next option is to add the 25K of CC debt into the HELOC figure, for a total of 65K + 30K + 25K = 120K = 15% of the first house. Close that loan and pay off the CC debt immediately. You're now transferring the 8.9% of wasted CC interest into an investment into your house, in addition to the tax writeoff. The last think to consider is to stick with the 95K HELOC option and pay off the CC bill with your assets. Are any of your stock or mutual funds giving you returns better than 9%? If so, then keep them where they are and do the 120K HELOC option. If they're earning less than 9%, then I refer you back to the concept of my second paragraph. If you take your mutual fund money that is earning less than 9% and pay down your worst mortgage/HELOC/CC rate with that, you're making a huge investment in your house. Now, if you want to sit on your stocks, that's understandable. I hope that my advice not confusing, and that it's helpful to you. Lindsay
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Mush, If I were to inherit $100,000. I'd invest almost all of it - maybe have a little fun with some of it, in a way that would be a good memorial to the one from whom I inherited. As I have no debt, currently. I won't go into debt for consumer stuff, daily issues of living: I wait till I can pay cash for stuff that I use up now. I prefer also to pay cash for a car, and get older cars, usually at $3,000. - 4,000. or less. The last one, costing $2,700., operated for me for over 8 years - cost me substantial amounts for repairs toward the end, more in total than I'd paid to buy it. But I drove it for over 110,000 miles. When I ask an auto salesperson whether s/he can give me 100,000 miles for about $6,000., they just look at me, sniff, and say, "No way!". Ian in B.C. Given your offer from your employers, one could scarcely turn it down. And for folks who have a stay-at-home spouse, and who have a pension plan themselves, a spousal RRSP makes good sense, in order to develop a double income stream after retirement. I just said that I don't like them for myself. An RRSP, or a similar type of investment as preparation for retirement, should be in core investments, solid stuff that'll do well over the years, despite some ups and downs along the road. I have some solid stocks that I bought somewhere around 30 years ago ... with money on which I'd already paid the tax. They've grown well in value, over the long term - and I didn't get all bent out of shape when their value went down by about 20% or so over a short term, for they'd done well before, and I expected them to do well later: usually better than average for a while after there's been a substantial drop. On such stocks as some of our major banks, pipeline companies, oil and gas and mining shares (the biggie, long-term ones), Geo. Weston, Power Corp. or subsidiaries, e.g. Investors' Group, GreatWest Life, or other major companies, I'm not worried that they may go out of business. Tobacco and booze, if having them doesn't bother you for moral reasons. I suggest that you check David Stanley's articles in "Canadian MoneySaver" on the Canadian equivalent of picking the "Dogs of the Dow", which he has written about for the past ten years, and back-tested for a number of years before that, usually reporting in the July/August issue what he (supposedly) bought at the end of May, as that was the time at which the TSE 35 was set up, several years ago. Then it was the largest 60 on the TSE, now the largest 40. He ranks those 40 stocks of the largest Canadian companies in order of the rate of dividend that they pay, from the highest down. Then he picks the 10 that pay the highest rate of dividend and buys an equal dollar amount of each. Despite some loss years, he's made a nice rate of return in about 7 or 8 of those 10 years, usually 10% or more total, comprised of dividends of about 3% and current capital gain ... or better. One year he was up 40%. There's a sub-set where one buys the 5 paying the highest dividend rate, and another that omits the one paying the highest dividend (as a company possibly in trouble, and possibly about to cut the dividend rate), and takes a double load of the one paying the second highest rate of dividend. In a number of years, this choice has turned out the best performance. I don't mind borrowing some to invest in such companies: if I use stocks worth $10,000. as collateral, the bank will lend me no more than $5,000. If I borrow the full $5,000. and the value of the collateral drops, say 20%, to $8,000., I get a call from the bank telling me that they want $2,000. more collateral ... or $1,000. cash to reduce the loan amount ... *today* (or at the latest, tomorrow). When I worked as a financial advisor, I told my clients that I wanted them to be in a position so that they *never* got such a margin call. I don't want any such myself (have never had one - but I've seldom used the borrowing strategy), so I borrow quite a bit less than the full amount that the bank is willing to lend. And I use stock of several companies, so that if one takes a heavy hit, my total isn't reduced too much. If I borrow, say $4,000. and give the stocks that I buy to the bank as additional collateral, they have somewhat less than $14,000. collateral, which means that they're willing to lend up to about $7,000. If the stocks take a hit of 30%, and it's doubtful if those heavy dividend payers would, even if the market as a whole went down 30%, that's a drop so that my total collateral would be under $10,000. But the bank would be willing to lend me something under $5,000. in those circumstances ... and I only owe them $4,000. You may have heard that the Canadian market has been going down for the last few months? About 3/4 of the stocks that Stanley picked in May this year are higher now than they were then. I can give you current particulars if you wish - which you can calculate for yourself if you check July/August 2006 "Canadian MoneySaver" and check current prices. Can give the record over the past 10 years, if you want them. When I receive dividends on Canadian stocks, I get a tax credit that means that I pay tax of peanuts on them, and use some of the income from the stocks that I own as well as those that I bought with the borrowed money to pay the interest on the loan - which currently, on my fully secured line of credit, would cost me 6%. If I can borrow at 6% that's fully deductible and buy stocks that earn about 3% now, taxed at a low rate, and use some of the dividends from stocks that I owned previously to pay the interest, I end up with little tax liability. 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just a girl's Mom, Two questions: What rate of interest are your credit card owners charging you on the debt? If it's low and about to to rise soon, what will the rate then be? What rate do you anticipate that your mortgage lender may charge? Generally speaking, I dislike credit card debt intensely, for most regular carriers charge 15 - 18% annual rate. But that's not the worst of it - most store-issued cards rates run 25 - 28%. And, since most of the stuff that many of us buy isn't income tax deductible, if you're in 25% marginal rate of tax, you must earn $37. per $100. debt, then pay $9. tax, leaving you with $28. to pay the credit card carrier. No wonder the isssuers of those cards smile! You would, too, if you were able to issue such cards. I'm in favour of using the funds to pay off the debt on the credit cards. With one heavy-duty proviso, however. You most likely used the cards to buy things that'll be used up over a short term, i.e. consumer items. That is, you lived in the past above what you were able to buy with earnings during that period. I want you to make an iron-clad agreement with yourself that, rather than letting that portion of your mortgage run over the full period of the mortgage, you work really hard to pay down that portion of the principal over a year or two, three at the outside. Otherwise, you'll still be paying in 15, 20 or 25 years for the carrots you ate, gas you used in your car, or Christmas gifts for your sister that were part of your living last year/today (two or three years ago, maybe?). Try really hard not to carry credit card debt - defer the purchase and put that interest into your own pocket. By the way - do you have some extra funds on hand so that if your car blows an engine, tranny, or whatever, or you need a root canal, or you suffer a prolonged layoff ... you'd still be operating comfortably with no income in the meantime ... three months (or, preferably six months or a year) from now? A cushion like that results in a good deal less chewing of fingernails for many people when faced with an emergency. Good wishes for skillful management of your money. ole joyful
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Billl
15 years ago
If you have stuff you don't want and don't use, by all means try to sell it.

I'm sure it is overwhelming right now, but your debt really isn't that large. A relatively small change will get those credit cards paid off and then you can start using the monthly excess to build up an emergency fund for the next house repair etc.

If I were you, I'd be looking for something you can do to bring in a little extra money. It could be an official "job", but it doesn't have to be. I know that personally, I would love to find a caring, mature adult to look after my daughter one night a week. There are lots people out there who need help with an older relative or even their pet. It doesn't have to be big, but a semi-consistent stream of money is going to do a lot more long term good than selling off a few possessions.
plantmaven
Original Author
15 years ago
Thank you for your kind words and ideas.
mostone
15 years ago
I recently became curious about how much I could get for a couple of gold chains that I haven't worn in more than 20 years and that have no sentimental value. The first place I went was a local jeweler that had a sign in the window that said they bought gold. They weighed the chains and took them to the back of the store where a manager presumably told the clerk to offer me $700. The next place I went was a "We Buy Gold/We Help You Sell on EBAY" kind of place - sort of a hole in the wall. They offered me $1028. The next place was a large fancier jeweler and they offered me around $800 or $1030 if I applied it to a purchase. Then I went to a pawn shop that also bought gold and was offered around $900. After all that I had a prety good idea of what that gold was worth. I suggest that anyone interested in selling jewelry do the same - go to several places and after they make you an offer just tell them that you have to think about it.
raee_gw zone 5b-6a Ohio
15 years ago
I truly feel for you!

Have you looked at everything you can do to reduce your utility bills? My phone company doesn't advertise it, or even show it on their rates and plans page, but most have a rate plan for people who don't make a lot of calls, also for those who qualify for "lifeline" service. I have a bare-bones, minimal service plan (30 calls/month) which is only $17/month after all taxes & fees. I buy a phone card ($0.03/min) to use for long distance. If I didn't need or want the landline, I would just have a prepaid cell phone ($15/month).

Also if you are using a cable service and tell them that you are dropping it because you can't afford it, they will usually offer you a lower price. I can do without TV cable but wouldn't want to give up internet at home because of my job. If I weren't working, I could do without.

Since you have access to the internet, it is worth it also to check www. (yourtown or state)gasprices.com to get the least expensive gas in your area, if it is available where you live. I have figured that for my car, it is worth it to drive 10 extra miles for a full fill-up if I can save over 12 cents/gallon. Prices around here routinely range 30-40 cents from cheapest to highest.

There are companies that buy households of furniture as well -- usually they also will run tag sales. But, I don't think you would get as much from them as if you sold it for yourself.

Don't forget your local newspaper classifieds. Also you can sell furniture on ebay. That is where I got my china cabinet and buffet. I drove about 75 miles to get them.

If you go for listing on craigslist--go to gmail and set up an email that you will use just for that, and set it up so that it doesn't show your real name when you reply.

You will get some obvious spam responses to your ads (don't even open those), as well as people who are not really interested but "just want to look". You can usually weed them out with a few questions before you set an appointment and give them directions. If you post good pictures (most people post horrible pictures that show no details; they need to be close-ups), and offer to send more if requested, you will get some who are sure that they want to buy the item; deal with those folks.

Get some trusted help to move the item out to the porch or driveway for the buyer to see and pick up if at all possible. Avoid letting people into your house. Don't let people know that you live there alone -- mention your son whether he exists or not.

I have had good luck selling excess plants and starts on craigslist; I just price at about half of the local nurseries. $1-$4 depending on the type and size of plant. I will usually make $200 before I get tired of the "just want to look"ers and no-shows and quit for the year.

Hope some of that was helpful. Best wishes.
vala55
15 years ago
When my husband was diagnosed with AZ, I saw an attorney right away. He said I would only have my small social security check to live on. My friends said "not true", so I went to an estate lawyer and he told me to make an appt with the SRS the day my husband went into a care home and do a division of assets. I know you can't do that now, but the others reading this needs to know about the division of assets. I got to keep my home which was new, the car of my choice and half of the money.
Barbnvabeach
15 years ago
I am so sorry to hear all of this. It seems as if the older generation, who have worked hard all of their lives end up with nothing now a day. I am in my late 50's and it is a daily struggle to live and keep a dollar in your pocket. If you have gold jewelry to sell, try locating a licensed buyer through "golden girls". One of the ladies I work with in VABeach is a buyer and the small amount of jewelry I gave her came out to over $300.00! Broken or just don't wear it anymore, it is all good. Just a suggestion and best of luck to you.......and all of us.
jakkom
15 years ago
Plantmaven, have you looked into a possible reverse mortgage? Apparently with some large banks pulling out, it's been recommended in a recent WSJournal/SmartMoney article to get it done before October 2011.

Doesn't hurt to ask, at least, and it might help you pay those bills off.

Best of luck to you going forward. You're in a rough spot, and our hearts go out to you.
ingrid_vc so. CA zone 9
15 years ago
If your jewelry is attractive, another good place to sell it is e-bay. I sold several items there at a very good price.
joyfulguy
14 years ago
Quite a few figure that the price of gold may go higher before it goes lower, should delaying some be an option.

As for a reverse mortgage, there are quirte a few restrictions and limitations.

It might be a good idea to get a Home Equity Line of Credit, to allow you to draw on as needed, but you'd need to make payments as you go along, not required with the reverse mortgage.

Do you have someone who is quite well versed in various financial issues, whom you can trust ... and who isn't trying to sell you something?

How about family ... close friends ... associates at church/religious, social/seniors' agency, etc?

ole joyful
jannie
14 years ago
I know a man who makes and cans chunky spicy salsa from vegetables he grows and sells them at a flea market for $4 a jar. His stuff sells like "hotcakes" because it's really good. He's a good friend of my cousin and gave me a jar as a free sample. Lets see, he grows the vegetables, he cooks it himself and cans it. He has to buy canning jars and printed labels. Never thought what would happen if the salsa made someone sick. Could he be sued? I'm sure he never got any legal advice. This guy is pleasant but a little "slow". The flea market doesn't "police" it's dealers. Some people set up a table at the Flea when they're moving to sell off furniture and collectibles. Might be safer than Craigslist. Just an idea for you.

Trying to pay off debt.....

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plantmaven
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Trying to pay off debt.....

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