my problem: considerable cash and lots of debt

Questionsmy problem: considerable cash and lots of debt
Dorine McLaurin asked 5 years ago

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.







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