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How Long Will it Take to Pay Off Credit Card Debt ?

Reblogger
Real Estate Agent with HomeSmart Realty West & Florida Realty Investments CA01938972, FL BK3090225

Not that I like Sally K. & David L. Hanson ...OK; I do! Here is a very important blog post from them that spells out the simple truth of how devastating consumer credit card debt can be to so many people we encounter in our business and perhaps one of the primary reason why so many can't qualify for a mortgage loan.

 

Thanks, Sally K. & David L. Hanson !

Original content by Sally K. & David L. Hanson 57026-90 Broker

     As agents who work in both the niches of short sales and divorce, we are very often keenly and confidentially aware of the credit card debt that has been accumulated.   To compound  the TOTAL of the debt...the couple may not always have a sterling credit rating which means the interest rate is very high.

    credit card debt In addition, if some part of the balance has been cash withdrawals the rates on those balances are even higher. It may seem at the time to be a very temporary even "one time" remedy to a shortage of cash...but in our experience reviewing financial information, it can often become a habit.

   Like "snitching" from the cookie jar or opening that bag of chips,...the limit to "just one" never seems to work before the diet ,...be it calories or debt is long forgotten and the taste of pleasure takes over consuming the consumer.

    In divorce there are various ways to divide income and assets...someone or both people has to be responsible for the credit card debt.  This debt can easily have mounted into five figures....and for people who foolishly only pay the debtminimum balance...while continuing to add to the balance, the situation only becomes worse.

      When we first began working with short sales, we were referred to a couple who applied for more and more credit cards all the time. He was unemployed in the construction trades and hopefully believed that he would working soon. While we gave him A+++ in his hopeful attitude, they kept using one credit card to make the minimum payment on another and were now bankruptcysix figures in credit card debt. We had to explain that while we could help with the mortgage debt, they should seek the wise counsel of a bankruptcy lawyer to deal with the rest of credit card debt.

  We always suggest...IF we are asked that clients examine their credit card debt and how long it will take to pay off using various figures of payments...the results are always a shock to them when they realize how very out of hand the debt has become.   This charge now/figure it out later syndrome is NOT at all reserved for people having small five figure incomes...just the opposite is true in many instances...where the income may be well into six figures...and it matches the accumulating debt.

    We suggest that people go to a website that enables them to see in Black and white how long credit card debt will take to pay off.  Click here for one of the sites we recommend.

      To drive this point home, let's use an example of $60,000 in debt with an interest rate of 17%. Let's imagine for the sake of this illustration that this balance represents only goods and services and no cash withdrawals. Let's also "plug in" to this equation the figure of  $875 a month in regular monthly paymenDEBT OVERFLOWts also not figuring that additional purchases may be charged thereby increasing the balance. For purposes of this illustration, we tried using lower payments and got an error message that indicated that a lower amount did not even cover the interest and we needed to increase the monthly payment.  Using this example, with NO additional purchases, it would take 252 months OR 21 YEARS TO PAY OFF THIS DEBT !

       In divorce where the debt may be assumed by one spouse as part of the settlement...it is EXTREMELY dangerous for the other spouse to agree to such terms.  For however many YEARS it takes to pay off this debt...this is part of the debt to income if it remains in both names for both people....a "forgotten" payment continues to ding the former spouse's credit rating while he/she is trying to improve it.  If such a proposal is made to you....Just say NO...there may well be other assets...a retirement fund, inheritance ....etc. that can be used to pay off or pay down this debt so that it doesn't continue to contribute to the credit ruin of both people .

   anchor While we can't legislate high school curriculum...we strongly advise that you sit down with high school and college age children and show them some of these illustrations so that they can begin to comprehend what after graduation appears to new found "financial freedom" can quickly become an anchor of debt.

      This is a financial public service message brought to you by Sally K. & David L. Hanson, Broker Associates with Keller Williams proudly serving southeastern Wisconsin.

Sally K. & David L. Hanson, ABR, CDPE, CSS, e-Pro,ILHM, REDS


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Posted by

Sandy Padula & Norm Padula, J.D., GRI
CA DRE#00902455 (Sandy)
Realtor®

HomeSmart Realty West

 

FL Bkr# 3090255 (Norm)
Broker-Associate

Florida Realty Investments

 

760.985.2055  Sandy
858.444.7060 & Norm

SDLuxHomes.com

PRESENCE ~ PERSISTENCE ~ PERSEVERANCE

 

 

 

Comments (28)

Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance

Wayne Martin Thank you and I hope you are enjoying your Chicago summer!

Jun 23, 2017 05:42 AM
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

If you are paying off the card(s) by making the minimum payment you may never see the light of day,

Jun 23, 2017 05:43 AM
Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance

It is as if the foibles of the past generations have fallen on deaf ears, Sham Reddy ; thank you!

Jun 23, 2017 05:43 AM
Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance

Indeed it is, Roy Kelley and the result of this will be many future Chapter 7 & 13 filings

Jun 23, 2017 05:43 AM
Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance

And I will bet you that a divorce is not out of the realm of possibilities for this couple, Scott Godzyk . That is financial infidelity in a marriage.

Jun 23, 2017 05:45 AM
Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance

You are correct and that is basically the message. Thanks, William Feela !

Jun 23, 2017 05:46 AM
Brian England
Ambrose Realty Management LLC - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

Aww, you are not alone, I really like Sally K. & David L. Hanson too!  Nice choice for a reblog!

Jun 23, 2017 06:57 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Hi Sandy and Norm... great reblog... I missed the original posting for some reason and I'm still trying to figure out how as not only do I follow the Hansens I speak with Sally by phone from time to time. 

Jun 23, 2017 07:23 AM
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

It is better to not get in debt then you never have to worry about how to pay it off. Have a good weekend. Sandy and Norm.

Jun 23, 2017 06:41 PM
Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance

Thanks, Brian England !

Jun 24, 2017 04:08 AM
Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance

Nina Hollander The Hansons are among my favorites. Thanks!

Jun 24, 2017 04:09 AM
Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance

Agree with you, Debbie Reynolds Thank you!

Jun 24, 2017 04:09 AM
Barbara Michaluk
Weichert Realtors | Phone Direct 240-506-2434 | 301-681-0550 office - Silver Spring, MD
Leisure World Specialist / Full Service REALTOR

I agree, this is critical info for anyone to consider when buying a home.  The choices we make in establishing credit and creating debt can work to our advantage or disadvantage when we're ready to buy a home.

Jun 24, 2017 07:42 AM
Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance

Thanks, Barbara Michaluk and Thanks for reading 

Jun 24, 2017 02:09 PM
Paul S. Henderson, REALTOR®, CRS
Fathom Realty Washington LLC - Tacoma, WA
South Puget Sound Washington Agent/Broker!

I never know which coast I will find you posting Sandy Padula and Norm Padula, JD, GRI NMLS#1483386 

Jun 24, 2017 09:07 PM
Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance

You know, Paul S. Henderson, CRS, REALTOR®, one never knows how to get off that boat once it has left the dock.

Jun 25, 2017 05:00 AM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Sandy & Norm my attitude is the bigger my credit card debt, the more I can enjoy the good life and home I kick the bucket before I have to pay it off:)) just kidding... it reminded me of when first AIDS come on  the market and people were spending their life savings and partying like there was no tomorrow and darn the cure i.e.: the cocktail came... Endre

Jun 25, 2017 09:04 PM
Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance

I agree, Endre Barath, Jr. Welcome to the last June 26, 2017 of your life; make it count!

Jun 26, 2017 04:00 AM
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

I have given away many Dave Ramsey books to people we did short sales for who had high debt and besides student loans, credit card debt.

Jul 23, 2017 08:59 AM
Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance

Dave Ramsey is all about financial freedom, Joe Pryor Thanks!

Jul 24, 2017 04:40 AM