Here’s my story. I am a disabled US veteran on social security and VA disability. For 8 years I have had a fiduciary handling my check. The first one of 6 years was a fraud and is still being investigated. The second one has been great. I asked to handle my own affairs again and my request was granted effective this month. My current payee has saved about $ 15,000 which I will be getting in a lump sum. I’m also saving $ 500-$ 1000 per month but plan to move to better quarters soon and do some traveling. Because of my foolish financial behavior (much caused by gambling) I amassed a $ 124,000 debt on a home equity line of credit. The house doesn’t belong to me, but I was the primary borrower, bailing out my stepmother out of debt back in 2006. I have lost contact with her and she does not respond to my inquires (or the bank’s). The loan enters repayment phase in about a year. I also ran up a $ 50,000 credit card debt in 2010 and that has been settled. I had countless 120+ lates but no bankruptcy. The home equity loan was late 11 times, most recently a 60-day late in September 2013. I have been good since then, and the home equity balance is down to $ 110,000. My credit scores have rebounded to 706-717, no inquiries since June 2015 (2,5,6 respectively on the CRA’s), and I hold 7 credit cards with a total utilization of near zero.
Bottom line is that I have ceased my credit card applications and have not gambled in 18 months. I plan to make payments on the loan for the next 16 years @$ 1000/month, assuming I live that long. That leaves me about $ 3000/month to live on. I may try to get some part-time work later this year. I plan to put $ 3000 in a 3% CD, the rest in money market and maybe a few grand toward the loan. The credit cards? Well, I use all of them from time to time, primarily the last one I got (Discover) and pay them off as soon as I use them. I’m also taking out student loans for part-time study. These loans may not need to be repaid because I’m permanently disabled, but once I apply for dismissal that ends my scholastic endeavours. I am about to turn 55.
I have thought about closing some of my cards but seem to have the habit of rotating them. I pay for two of them (CSP and AMEX senior Gold). I travel and eat out a lot, so I was happy to get the CSP in January 2015. The senior gold has 24 years of backdated history (I got it in 2013 as a green card). Then I got 3 more cards last year and ended the spree with the discover. I opted out on-line and no longer get offers in the mail. I have been app free for over 8 months.
What would you do with $ 15,000 cash and $ 110K debt at 3% (prime -0.5%) interest? I am single and live in a dive apartment. I hope to change that this year.