Pick Your Community: | Hopkins | Muhlenberg | Daviess | Christian | Henderson | Lakes | McCracken | Webster
Davis Motor Sales banner ad

Dave Says – April 21, 2013

davesays300 green2KENTUCKY (4/21/13) – This week Dave discusses Making it through medical leave and You lose control with repossession.
 
Dear Dave,
I’ve been on medical leave from my job due to an injury. My doctor recently advised extending the leave another six months, but during this time I wouldn’t be paid. My husband makes $75,000 a year, and we owe $40,000 on our cars. This includes a $30,000 note on one of them. Should we take money out of our 401(k) to make it through the additional time off? - Crystal

Dear Crystal,
Absolutely not! You guys have dug a hole for yourselves, and borrowing from one place to fix another will only make that hole deeper. In cases like this you have to address the core issue. Your income has dropped significantly, so you need to cut your lifestyle to match your new income level.

My advice would be to sell the cars, at least the $30,000 one. There’s no justification for $40,000 worth of vehicles in your garage when you’re living on $75,000. It makes me think you don’t have any savings, either, if you’re talking about raiding your 401(k). Financially speaking, you have no room to breathe right now.

Serious situations call for serious actions. You’ve got to get your lifestyle down to a manageable level until you’re able to work again. And even then, there’s no reason to raise your lifestyle up to your income. Live on less than you make, Crystal. That’s what enables you to save money and be prepared when Murphy comes knocking on your door! - Dave
 
Dear Dave,
I’m having trouble making my auto payment. I owe $20,000, and the car is worth $17,000. Should I allow the bank to repossess it, and could they take a lien against my house if they do? - Jose

Dear Jose,
You bet they could slap a lien on your home. You never want to go through repossession if there’s any way to avoid that scenario. If they repossess, not only does your credit take a huge hit, you also lose control of the price of the car.

After a repo, the lender will sell the car and sue you for the difference. But if you sell the car, you might be able to work out a higher price, leaving you a lesser amount you’d owe for the difference. Chances are if your loan is with General Motors, they won’t work with you on the $3,000 difference. In that situation, you can either negotiate with the bank or go to another bank or credit union and get a small loan for the difference. Just make sure you pay the loan off as quickly as possible.

Keep in mind, too, that even if the car is worth $17,000, it won’t bring that much on the repo lot. More than likely it would sell for about $11,000, leaving you $9,000 in the hole. By giving up control, you’d create a much bigger financial mess. I wouldn’t do that. - Dave

* Dave Ramsey is America’s trusted voice on money and business. He’s authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. The Dave Ramsey Show is heard by more than 6 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com.


Disclaimer: The content supplied by columnists and letters to the Editor on this site does not in any way, shape or form, implied or otherwise, necessarily express or suggest endorsement or support of any of such content, statement, or opinions therein. SurfKY News does not necessarily adhere to or endorse content provided by outside non-staff sources.

© Copyright 2014 SurfKY News Group, Inc. All rights reserved. This material may not be published, broadcast, or rewritten without permission. SurfKY News encourages you to share this story by using one of the social media links below.

button coupons
Started 11/8/2013
Started 11/8/2013
Started 11/8/2013
Started 11/8/2013
Started 11/8/2013
Started 11/8/2013
button classifieds

In Other News...

Baptist Health Ebola Ready

MADISONVILLE, Ky. (11/27/14) — Infection Control coordinator Tammy Merrill presented Ebola preparedness at Baptist… Read More

Local Pastors' Alliance Hosting College/Career Readiness Event

HENDERSON, Ky. (11/28/14) — The African American Pastors' and Laymen’s Alliance are joining efforts with Henderson… Read More
Started 11/8/2013
Started 11/8/2013

Most Read This Week

November 22, 2014 5378

One Injured in Two Vehicle Collision in Greenville

in Local (Muhlenberg) Top News by Miria Thomas
November 24, 2014 3536

Two Charged for Possession of Meth After…

in Local (Muhlenberg) Top News by MCSO/PIO Alex Piper
November 21, 2014 3460

Kentucky Employers to Save About $112 million

in General News For All Sites by Cathy Lindsey
November 25, 2014 2790

Call for Help Results in Arrest for Possession of…

in Local (Hopkins) Top News by Madisonville Police Department
November 25, 2014 2747

Madisonville Man Charged for Selling Cocaine

in Local (Hopkins) Top News by Madisonville Police Department
November 22, 2014 2650

Greenville Representatives Taking Part in Austin,…

in Local (Muhlenberg) Top News by Paul McRee, SurfKY News
November 21, 2014 2470

KSP Announces 'Cram the Cruiser' to Feed the…

in Top News For All Sites Touching Hopkins by Stu Recke
November 24, 2014 2466

Madisonville Police Charge Woman with Terroristic…

in Local (Hopkins) Top News by Madisonville Police Department
November 22, 2014 2452

SAR Planning 'Triple' Revolutionary War Patriot…

in Local (Muhlenberg) Top News by Geoff Baggett
November 24, 2014 2450

Hopkins County Sheriff's Reports Released

in Hopkins News by Sheila Hopper

Stories Trending Today

November 26, 2014 1704

Greene Leaf Boutique Offers Style for Less

in Local (Muhlenberg) Top News by Charles W. Riley II, SurfKY News
November 26, 2014 1403

Madisonville Man Charged with Selling Cocaine

in Local (Hopkins) Top News by Lt. William W. Poe
November 27, 2014 1288

Sons of American Revolution Hold Triple Grave…

in Local (Muhlenberg) Top News by Geoff Baggett
November 26, 2014 1257

Don't Let Your Thanksgiving Go Up in Smoke

in General News For All Sites by Kip Diggs
November 27, 2014 1243

Caretender's Staff Cares About Feeding Needy…

in Top News For All Sites Touching Hopkins by Amber Averitt, SurfKY News
November 27, 2014 1225

MCTI Presents 'The Santaland Diaries'

in Local (Muhlenberg) Top News by Paul McRee, SurfKY News
November 26, 2014 1171

Thanksgiving is Top Day for Cooking Fires

in Top News For All Sites by Ricki Gardenhire
November 27, 2014 1143

MSA Thanksgiving Food Box Drive

in Top News For All Sites Touching Hopkins by Joyce Riggs
November 26, 2014 1037

Gift Exchange Dos and Don'ts

in General News For All Sites by SurfKY News
November 26, 2014 837

Ready Your Home for Holiday Guests

in General News For All Sites by SurfKY News

SurfKY News Group, Inc.
Corporate Office & Studio
1125 Nebo Rd.  •  Madisonville, KY 42431
270.452.2727 (phone)
  •  270.452.2249 (fax)


Contact a member of our staff: www.surfky.com/contact
Copyright © 2014 SurfKY News Group, Inc.  •  Terms of Use  •  Site Map

social fbsocial twsocial yt
social gpsocial flrsocial rss