cc debt and student loans
My daughter has accumulated $43K in cc debt. avg. rate is 20%. Monthly min is appox $1,950. Also, graduated with a student loan of $29K during covid. I’ve agreed to help. She contacted a NFP Beyond Finance . They have agreed to negotiate with the CC companies and have K make payments of 550.00/month for 5 years to wipe out the debt. I could take $43K from the market and pay now or leave in the market and pay monthly make the monthly deposit into her account .
Will this ruin her credit going forward for 2 yrs? Should I pay off the cards? And you say?? THanks
Terry Says
The plan she has will definitely ruin her credit — for at least 5 years. These firms advise you to stop paying until you accumulate enough cash on the side for them to negotiate. Then again her credit was going to be ruined anyway, since she could not make these payments.
What I’m really concerned with is your offer to pay for her mistakes! Will she learn anything? Will you have enough money to retire? Is she working and earning money? Would it be a better lesson for her to have to move in with you and save on rent, than for you to bail her out?
The student loans are another thing. We will see what happens re forgiveness. But she can always enter an income-based repayment program to deal with them.
