No. of Recommendations: 0
Thanks for all the feedback. I've been giving this a a lot of thought lately. Some people have said the solution is simple... liquidate $100K of my 401K and pay off the CC's, or borrow $50K and pay most of them off. Unfortunately, it really isn't that simple.

I already have a $30K loan against the 401K that I'm paying $600 a month on. If I could refinance this loan for $50K, that gives me $20K to apply towards the CC's. Plus, I don't know if I can afford the higher 401K loan payments, plus any other payments I need to pay off the rest of the balance.

Also, I don't think it is a good idea for me to take on more debt. The best solution is to liquidate assets and pay down/off my debts.

FYI: This 401K loan is my only other debt, and it is a secured loan.

Which opens up the problem. How does one go about liquidating part of their nest egg to pay off credit cards? I'm going to start a new thread to discuss this subject.

If I can't liquidate part of my nest egg, I need to negotiate a payment shedule with the CC's. There are two paths I can take here.

(1) Forgivness of part of the debt. The problem with this is that I would have to pay about 35 cents in taces for every dollar waived. The get the debt down to a level where I can afford to pay *some* debt plus the taxes on the waived debt will be much lower than the CC's will tolorate.

(2) Freeze interest and fees, and make small payments at first, larger payments later as income becomes available until the balance is paid off, no matter how many years this takes.

I'll float the ideas to the CC's.

Print the post  


UGC Disclosure Notice Regarding Credit Card Posts
Community board discussions about credit cards are not provided or commissioned by banks who may have advertising relationships with The Motley Fool. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
Live Video Event Monday!
The GP team is hosting a live video event on Monday at 4 p.m. ET. Don't worry if you can't make it — we'll have a replay and a transcript. Click for more!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.