I’m a 53 year old pilot making 85K/ yr. I also own a small business that I invested heavily in hoping to start reaping profits by now. Instead, I’m now in debt for about 40K in outstanding business expenses with about additional 25K in credit card debt and 18K unsecured loan.
I loaned my Dad 9K before the economy down turned but he has no money to repay me. I own a home with about 40-50K in equity, a rental home with about 20K equity, one rental home with 10-15k equity, both are rented….401 K worth 60K at present. I may be taking a pay cut at work and will no longer be able to afford the debt payments.
What is the best way to get out of debt quickly with out ruining my credit?
Should I use my 401 K to repay?
Should I seek credit counseling and have my interest rates reduced or will they reduce it with their services?
Should I seek a financial planner’s advice?
Thanks for your help
I think you’ll need to post an update for me in the comments section of your question here on the site and give me some more information.
Coincidently I happen to be a private pilot and never got to the commercial ranks. Good for you.
The debt situation has to be weighing heavily on you so let’s see what can be done. Can you tell me what interest rates you are being charged on the 18K unsecured loan and who that is with? What rates are you paying on the cards?
It certainly sounds like you are real estate rich but cash poor right now. Kind of a bad time to want to unload real estate in many markets. What is the real estate market like around you?
The biggest fear I hear in your voice is you sense you will be in trouble when your salary gets reduced. And anticipating a reduction in salary or benefits in this modern aviation industry is unfortunately warranted. I assume that you are just getting by right now and that any reduction is going to make it hard for you to make ends meet, correct?
What kind of side business did you invest in?
To answer your questions:
What is the best way to get out of debt quickly with out ruining my credit? Pay it off with cash-on-hand. Seriously.
Should I use my 401 K to repay? No. you are getting old. You’ll need that little bit of money in the future so you don’t eat dog food.
Should I seek credit counseling and have my interest rates reduced or will they reduce it with their services? Not yet, let’s get a financial flight plan organized here first before you jump to any conclusions.
Should I seek a financial planner’s advice? If you are thinking of making some investments then a financial planner would be the person to see. But they are not get out of debt experts. Now if your financial planner will take you out for a free lunch, I’d be all over that. LOL