Debt Dumpers - 2015

[Ava]

Well it's a sad way to have your debt paid off but it must be a huge weight off of you to know it's coming soon. I'm no tax attorney but my dad's degree is in accounting & he has a shore house that he says if they sell it and it's not their primary residence, it's called Capital Gains Tax. And of course it's ridiculously high. Good luck that the sale goes through as planned.

Yeah, I'm definitely going to have to consult someone at tax time next year. The deed is in mine and my sister's names (my dad was smart enough to do that for us years ago so we'd avoid inheritance taxes if we decided to sell) but neither of us live there so I don't know if we'll have to pay capital gains taxes or not. There is no livable structure on the property, just an old mobile home and a garage, so we are really just selling the land. But I'm sure the IRS doesn't care about that. My plan once I have the funds is to pay off the smaller of my two cards right away since the 0% interest promotion on that one expires in March. Then I'll stick the rest of the money into a savings account until after tax time to make sure I have enough set aside to cover whatever taxes I may owe. Hopefully the taxes won't eat up too much of it and I'll have enough left afterwards to completely pay off my larger card as well.

 

[bcwife76]

@gracie1 to say you have enough on your plate to deal with is an understatement!

 

[bcwife76]

Not sure if this is debt related (I guess so though!) we just changed our upcoming cruise from Alaska August 2016 to 7 night Bahamas January 2017. Alaska (on Disney) is already SO expensive, then add in our crummy CDN $ (which is predicted to go lower soon) and eventhough it's a 40th birthday celebration for both of us, we CANNOT justify in the end spending that much money. Even factoring in airfare to TX from Vancouver, this new cruise is still far less expensive. Shaved off even more by going from a Deluxe Inside back to a Standard inside. Hey, it'll be warm, we'll be up on deck and in the pools anyway

Plus....this means we might be able to swing a week long trip to Maui in May...stay tuned Boy oh boy am I ever joining the 2016 Debt Dumpers thread, though!

 

[Ava]

@bcwife76 I'm sorry the CDN $ situation forced you to change your plans, but now I am thinking we should take a trip to Niagra Falls next year. We were thinking of going to Washington DC over spring break but if the CDN $ works in our favor Niagra Falls might be a better choice. Hmm...

 

[dayvewc]

Yeah, I'm definitely going to have to consult someone at tax time next year. The deed is in mine and my sister's names (my dad was smart enough to do that for us years ago so we'd avoid inheritance taxes if we decided to sell) but neither of us live there so I don't know if we'll have to pay capital gains taxes or not. There is no livable structure on the property, just an old mobile home and a garage, so we are really just selling the land. But I'm sure the IRS doesn't care about that. My plan once I have the funds is to pay off the smaller of my two cards right away since the 0% interest promotion on that one expires in March. Then I'll stick the rest of the money into a savings account until after tax time to make sure I have enough set aside to cover whatever taxes I may owe. Hopefully the taxes won't eat up too much of it and I'll have enough left afterwards to completely pay off my larger card as well.

I am not a tax adviser, but to quote one of my college professors "(You) know just enough to be really dangerous". ;-)

In general, capitol gains tax rates are less than standard income tax rates - that has been part of the big political discussion for the past many years. People in the top tier income brackets make most of their money based on capitol gains, which are taxed at a 10 - 15% rate instead of the "normal" income rate of 20 - 35% for that amount of "earned income".

Not saying that you shouldn't hold back more than enough to cover the taxes, just that it might not be as bad as you think it could be. AND capitol gains are taxed based on the gain. So, if you "bought" the land from your father for $1000, and sold it for $1100, you would pay taxes on the $100 gain, at 10-15% so only $10-$15 dollars, not $110 - $165 based on the sale price. (In this example - only you know the actual amounts involved).

The fun part will be finding the documentation showing how much your dad "sold" the land to you and your sister for originally.

 

[bcwife76]

@bcwife76 I'm sorry the CDN $ situation forced you to change your plans, but now I am thinking we should take a trip to Niagra Falls next year. We were thinking of going to Washington DC over spring break but if the CDN $ works in our favor Niagra Falls might be a better choice. Hmm...

Yes, our tumbling CDN $ means good travel deals/value for those travelling TO Canada!

 

[bcwife76]

@dayvewc I notice you have a new Disneyland ticker

 

[dayvewc]

Ok, so haven't said much the last week or so, but I do have a couple of minor "arrgghhh" moments, as well as a decision to make (that I'm going to throw out for suggestions).

I got all of my maintenance fee bills for my timeshares in, and even with everything else happening this year I almost managed to save enough to have the cash on hand to pay them. Actually, I would have had enough but they all went up a little more than I was expecting, and we did not get our Christmas bonus this year form work, and my parents decided to not give Christmas cash this year. So, when they come due on Jan 1, I will be about $300 short (out of $2600). Not too worried because as much as I will hate doing it, 2 of my CC's close out the first week of the month, so I have the option of using them to pay the remainder and would have essentially 2 more months to pay them off, and I would have the difference saved by the middle of February, if I don't change my saving pattern.

My decision I have to make is based on my roommates. One of them has been paying rent regularly (which is an astounding blessing), and the other (my ex) has finally started paying. The decision I have to look at is that I have not been calculating the rent from the ex in my budgeting, because I never knew when or if or how much would be paid. So, what should I do with the payments now coming in? (Obviously, the first thing I will do is to pay the rest of my MF for my TS so I won't need to use my CC). The next step though is - I have a 0% promotional payment that doesn't end until July, but the monthly rent payment is more than the monthly payment - though just barely.

So, do I use the rent payment to build up my emergency reserves? Or, do I pay off the promotional balance to add to the snowball? Or do I pay more on my mortgages / 1 interest charging account to bring the balances down faster? Or do I do some combination of all of the above?

@dayvewc I notice you have a new Disneyland ticker

Yep, gots to see me that there Diamond Celebration afore it's over!!

 

[Eureka]

@bcwife76 I'm sorry the CDN $ situation forced you to change your plans, but now I am thinking we should take a trip to Niagra Falls next year. We were thinking of going to Washington DC over spring break but if the CDN $ works in our favor Niagra Falls might be a better choice. Hmm...

I live in the DC area...nice thing about here is a lot of the monuments and museums are free. So it may not be as expensive a trip as you might think. Feel free to pick my brain when it gets closer.

 

[Angeejoe]

sounds like your family has been through a lot with cancer! Right now we're at the hospital - their getting ready to do a bronchoscopy on my dad to check one other area out - hopefully this is not cancer in the area their testing - if it is then the whole treatment plan will change - so keeping fingers crossed!
The refi is all me - no husband so it is pretty much at a standstill right now. The appraisal was done last Monday so just waiting on the report. I hate waiting - I am a very impatient person!! Lol. But all the papers were sent in to the lawyer that I picked so they can get moving on the title search. As of now I checked the box that we will be at the settlement but I'm pretty sure if something health wise were to prevent that then I could change that with the attorney. I wondered how they did that if you weren't present - glad to know they just send a notary to your house.
So far I haven't received anything else in the mail where inquiries were made or accounts were opened - hoping that is the only damage done.

Sending prayers to you & your dad @gracie1

 

[DnA2010]

Not sure if this is debt related (I guess so though!) we just changed our upcoming cruise from Alaska August 2016 to 7 night Bahamas January 2017. Alaska (on Disney) is already SO expensive, then add in our crummy CDN $ (which is predicted to go lower soon) and eventhough it's a 40th birthday celebration for both of us, we CANNOT justify in the end spending that much money. Even factoring in airfare to TX from Vancouver, this new cruise is still far less expensive. Shaved off even more by going from a Deluxe Inside back to a Standard inside. Hey, it'll be warm, we'll be up on deck and in the pools anyway

Plus....this means we might be able to swing a week long trip to Maui in May...stay tuned Boy oh boy am I ever joining the 2016 Debt Dumpers thread, though!

I really wanted to do Alaska with Disney...but turned the same way you are...I just can't spend that kind of money..its CRAZY. We haven't done the ports in the Bahamas yet, so maybe we will join you in January 2017...who knows! Are you looking at the ones out of Galveston? I was actually...
We are considering Alaska last minute, or on one of the lines you can book in CAD

 

[bcwife76]

I really wanted to do Alaska with Disney...but turned the same way you are...I just can't spend that kind of money..its CRAZY. We haven't done the ports in the Bahamas yet, so maybe we will join you in January 2017...who knows! Are you looking at the ones out of Galveston? I was actually...
We are considering Alaska last minute, or on one of the lines you can book in CAD

Yes, ours is round trip from Galveston. I'm excited because we've never been to Texas before, never been to the ports that this cruise goes to so it's all new. Of course, we've never been to Alaska before either....we will get to Alaska, it will probably be on a different cruise line though.

 

[gracie1]

Not sure if this is debt related (I guess so though!) we just changed our upcoming cruise from Alaska August 2016 to 7 night Bahamas January 2017. Alaska (on Disney) is already SO expensive, then add in our crummy CDN $ (which is predicted to go lower soon) and eventhough it's a 40th birthday celebration for both of us, we CANNOT justify in the end spending that much money. Even factoring in airfare to TX from Vancouver, this new cruise is still far less expensive. Shaved off even more by going from a Deluxe Inside back to a Standard inside. Hey, it'll be warm, we'll be up on deck and in the pools anyway

Plus....this means we might be able to swing a week long trip to Maui in May...stay tuned Boy oh boy am I ever joining the 2016 Debt Dumpers thread, though!

I've always wanted to go to Alaska but I'm with you - you can get possibly two vacations instead of one! Have you been to Maui before? I haven't but seems like a great trip!!

 

[gracie1]

Ok, so haven't said much the last week or so, but I do have a couple of minor "arrgghhh" moments, as well as a decision to make (that I'm going to throw out for suggestions).

I got all of my maintenance fee bills for my timeshares in, and even with everything else happening this year I almost managed to save enough to have the cash on hand to pay them. Actually, I would have had enough but they all went up a little more than I was expecting, and we did not get our Christmas bonus this year form work, and my parents decided to not give Christmas cash this year. So, when they come due on Jan 1, I will be about $300 short (out of $2600). Not too worried because as much as I will hate doing it, 2 of my CC's close out the first week of the month, so I have the option of using them to pay the remainder and would have essentially 2 more months to pay them off, and I would have the difference saved by the middle of February, if I don't change my saving pattern.

My decision I have to make is based on my roommates. One of them has been paying rent regularly (which is an astounding blessing), and the other (my ex) has finally started paying. The decision I have to look at is that I have not been calculating the rent from the ex in my budgeting, because I never knew when or if or how much would be paid. So, what should I do with the payments now coming in? (Obviously, the first thing I will do is to pay the rest of my MF for my TS so I won't need to use my CC). The next step though is - I have a 0% promotional payment that doesn't end until July, but the monthly rent payment is more than the monthly payment - though just barely.

So, do I use the rent payment to build up my emergency reserves? Or, do I pay off the promotional balance to add to the snowball? Or do I pay more on my mortgages / 1 interest charging account to bring the balances down faster? Or do I do some combination of all of the above?



Yep, gots to see me that there Diamond Celebration afore it's over!!

So once you pay everything will you still have money in your emergency fund? If so.. Then maybe take the rent check and split it - half to emergency and half to debt. I thought the exes parents were paying for rent? Or was that just to start out?

 

[dayvewc]

So once you pay everything will you still have money in your emergency fund? If so.. Then maybe take the rent check and split it - half to emergency and half to debt. I thought the exes parents were paying for rent? Or was that just to start out?

Once I pay everything, I will be completely drained on my emergency fund - mostly. lol. I have "emergency money" in 6 different accounts spread across 3 banks. The bills will wipe out everything in 5 of the accounts. While I will have some left in the last account, it is a minimal amount. So, effectively consider that my emergency fund will be empty.

The exes parents paid for 4 months, and that was it. Ex has been living and paying some the last 3 months, but no where near the full share. At the risk of sounding like an enabler, this time it is not the exes fault. The job he got does pay him enough, but other than the first month every check has been short - like only paying 25% of the amount due. He's working as an independent contractor, and getting all the paperwork refiled for the back-pay is turning into an all out hassle.

I'm really leaning toward splitting it 2/3 for emergency fund and 1/3 toward the 0% interest promotion, just because that would let me pay it off around Feb/March (4-5 months early) and would free up $70 a month to snowball over to the debt payoff. This would let me continue to build my EF at my current rate of $200/month + $400/month from the exes rent and increase my snowball by $270 (total after the promotion is paid off) which is almost 1/2 months payment on my loan. The big boost will come next Jan, as both of the other 0% interest promotions will pay off in December, and that will free up $650 a month to tackle my mortgages.

Now, if karma just doesn't decide I need to work off some bad points from somewhere, by Jan '16 I should have a bit over $10,000 in my EF (2 1/2 months pay before taxes almost 5 months after taxes), have all of my promotion balances paid off (which included almost $12K in transferred CC debt), and be in a position to pay almost $1700 a month against my mortgages - my only debts at that point - which have a minimum monthly total of about $900.

 

[gracie1]

Once I pay everything, I will be completely drained on my emergency fund - mostly. lol. I have "emergency money" in 6 different accounts spread across 3 banks. The bills will wipe out everything in 5 of the accounts. While I will have some left in the last account, it is a minimal amount. So, effectively consider that my emergency fund will be empty.

The exes parents paid for 4 months, and that was it. Ex has been living and paying some the last 3 months, but no where near the full share. At the risk of sounding like an enabler, this time it is not the exes fault. The job he got does pay him enough, but other than the first month every check has been short - like only paying 25% of the amount due. He's working as an independent contractor, and getting all the paperwork refiled for the back-pay is turning into an all out hassle.

I'm really leaning toward splitting it 2/3 for emergency fund and 1/3 toward the 0% interest promotion, just because that would let me pay it off around Feb/March (4-5 months early) and would free up $70 a month to snowball over to the debt payoff. This would let me continue to build my EF at my current rate of $200/month + $400/month from the exes rent and increase my snowball by $270 (total after the promotion is paid off) which is almost 1/2 months payment on my loan. The big boost will come next Jan, as both of the other 0% interest promotions will pay off in December, and that will free up $650 a month to tackle my mortgages.

Now, if karma just doesn't decide I need to work off some bad points from somewhere, by Jan '16 I should have a bit over $10,000 in my EF (2 1/2 months pay before taxes almost 5 months after taxes), have all of my promotion balances paid off (which included almost $12K in transferred CC debt), and be in a position to pay almost $1700 a month against my mortgages - my only debts at that point - which have a minimum monthly total of about $900.

I agree with your thought process - build up the emergency fund - especially since it's a 0% credit card.

 

[Ava]

I am not a tax adviser, but to quote one of my college professors "(You) know just enough to be really dangerous". ;-)

In general, capitol gains tax rates are less than standard income tax rates - that has been part of the big political discussion for the past many years. People in the top tier income brackets make most of their money based on capitol gains, which are taxed at a 10 - 15% rate instead of the "normal" income rate of 20 - 35% for that amount of "earned income".

Not saying that you shouldn't hold back more than enough to cover the taxes, just that it might not be as bad as you think it could be. AND capitol gains are taxed based on the gain. So, if you "bought" the land from your father for $1000, and sold it for $1100, you would pay taxes on the $100 gain, at 10-15% so only $10-$15 dollars, not $110 - $165 based on the sale price. (In this example - only you know the actual amounts involved).

The fun part will be finding the documentation showing how much your dad "sold" the land to you and your sister for originally.

Ha. We didn't pay him anything; as far as I know he just signed the deed over to us. He had also owned the property for I don't even know how many years, and I have no idea how much he paid for it. I don't even think my mom could find any documentation from when he bought it after he passed away. So we'll see. I'm hoping the taxes aren't too much but like I said I'm going to prepare for the worst and hang on to a good portion of the money until after tax time.

I live in the DC area...nice thing about here is a lot of the monuments and museums are free. So it may not be as expensive a trip as you might think. Feel free to pick my brain when it gets closer.

I grew up in Maryland so I've been to DC many times, but live in NY now. You are right about the all the free attractions in DC though, so we'd really only have to pay for transportation, hotel, and food. Hotel prices (that I've seen) are ridiculous for anything halfway decent close to the Mall, so I've been looking into Airbnb. I will probably price out a Niagra Falls trip now too, just out of curiosity. It feels silly not to take advantage of the good (for us) exchange rate while it's available, since Niagra Falls is on our "bucket list" of family vacations. Although my little one will only be not quite 3, so not sure if that's too young. Lots of things to consider. Our spring break isn't until the last week of April so I have some time.

 

[Eureka]

Ha. We didn't pay him anything; as far as I know he just signed the deed over to us. He had also owned the property for I don't even know how many years, and I have no idea how much he paid for it. I don't even think my mom could find any documentation from when he bought it after he passed away. So we'll see. I'm hoping the taxes aren't too much but like I said I'm going to prepare for the worst and hang on to a good portion of the money until after tax time.


I grew up in Maryland so I've been to DC many times, but live in NY now. You are right about the all the free attractions in DC though, so we'd really only have to pay for transportation, hotel, and food. Hotel prices (that I've seen) are ridiculous for anything halfway decent close to the Mall, so I've been looking into Airbnb. I will probably price out a Niagra Falls trip now too, just out of curiosity. It feels silly not to take advantage of the good (for us) exchange rate while it's available, since Niagra Falls is on our "bucket list" of family vacations. Although my little one will only be not quite 3, so not sure if that's too young. Lots of things to consider. Our spring break isn't until the last week of April so I have some time.

Oops, so I see you know everything I could tell you yeah, most people I know who want to stay right "in the city" stay in Rosslyn or Airbnb somewhere. We live "way out" (Charles County, MD) so reasonable hotels but then the drive in is longer.

 

[momtosam]

Happy Thanksgiving -- you're laid off!

DH got laid off today.

 

[bcwife76]

Happy Thanksgiving -- you're laid off!

DH got laid off today.

Oh no!! Did you have any idea this was a possibility? I'm so sorry