The Homeless Project – Part 3

This is the third and final video in a series we shot to help get a new perspective on money, credit, and debt problems.

I selected a series of questions sent in through the GetOutOfDebt.org site and we went out and asked some homeless people if they would be willing to participate in this project and share their opinion to help answer some reader submitted questions. We had to summarize the questions to ask them but the full questions and my answers are below.

Robert and Wilhelmina were paid $20 each for taking the time to help answer questions and Wilhelmina immediately used her funds to go buy some new shoes for work.

The questions included in Part 3 were:

• Stephanie – I’m a 33 year old single mother and I cant afford my mortgage, home improvement loan, etc. I don’t want to lose my home. Should I cash out my retirement account to pay off my second mortgage?
  

  My Answer: I’d rather see you protect your retirement plan and make changes to live within your current income today. Cashing out your retirement plan robs you of that investment at a time later in life you will need it most.

• Ryan – My hours at work have been cut and I can no longer afford to pay one of my credit cards. I have a total of three cards for $8000 and want to get rid of two of them but can’t afford all the payments so I have stopped sending money. How bad of an idea is it to stop paying?
  

  My Answer: Well when you stop sending payments you’ll wind up in collections. Stopping payments can make sense for a short time while you regroup and come up with a better plan but just stopping and not dealing with the debt, as a solution, is not a great idea.