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 2015 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...

Dawson Springs Police Reports Released

DAWSON SPRINGS, Ky. (1/26/15) — The Dawson Springs Police Department released the following reports Monday, Jan. 26.… Read More

Lady Panthers Pull Away from Owensboro in Overtime

OWENSBORO, Ky. (1/26/15) — Visiting Daviess County outscored Owensboro 8-1 in overtime to prevail 56-49 in a Ninth… Read More
Started 11/8/2013
Started 11/8/2013

Most Read This Week

January 23, 2015 8022

Local Church's Faith Restored; 71 Souls Saved…

in Video by Gary Gates, SurfKY News
January 20, 2015 6914

Bridal, Prom, Pageant Expo Planned for February…

in Hopkins News by Dana Brown
January 22, 2015 6902

Nortonville Man Accused of Selling Drugs near…

in Local (Hopkins) Top News by Madisonville Police Department/Hopkins County Jail
January 21, 2015 5535

KYDOT Pre-Treating Roads Thursday in Antipation…

in Top News For All Sites by Keith Todd
January 23, 2015 5507

Parents Face Charges after Marijuana Joint Falls…

in Local (Hopkins) Top News by Madisonville Police Department/Hopkins County Jail
January 22, 2015 5084

MCEA Head: Further School Mergers Might Ease…

in Local (Muhlenberg) Top News by Paul McRee, SurfKY News
January 21, 2015 4759

Man Arrested after Allegedly Nodding off on Baby…

in Local (Hopkins) Top News by Madisonville Police Department/Hopkins County Jail
January 23, 2015 4274

Nortonville Woman Charged for Meth Possession

in Local (Hopkins) Top News by Hopkins County Sheriff's Office/Hopkins County Detention Center
January 25, 2015 3648

Dean’s List Announced

in Top News For All Sites Touching Hopkins by Joyce Riggs
January 22, 2015 3611

Local Family Business Changes Hands

in Local (Hopkins) Top News by Doreen Dennis, SurfKY News

Stories Trending Today

January 25, 2015 3648

Dean’s List Announced

in Top News For All Sites Touching Hopkins by Joyce Riggs
January 25, 2015 1947

UPDATE: Two Die, Two Injured in Two-Vehicle…

in Local (Owensboro) Top News by Dispatcher Dustin Staves
January 25, 2015 1282

Juvenile Hit by Vehicle at McDonald's

in Local (Muhlenberg) Top News by GPD Officer Wes Miller
January 25, 2015 1163

Kynect Enrollment Climbs as Countdown to Feb. 15…

in General News For All Sites by Office of the Governor
January 25, 2015 1035

Market Commentary - Jan. 25, 2015

in Top News For All Sites by Randall L. Franklin
January 25, 2015 990

Dave Says - Jan. 25, 2015

in General News For All Sites by Dave Ramsey
January 25, 2015 907

March 20-22 Women's Retreat: 'Holiness in Family…

in Owensboro News by Jennifer Kaminski
January 25, 2015 841

Outdoor Truths - Jan. 25, 2015

in General News For All Sites by Gary Miller
January 25, 2015 813

Legislator's Log - Week of Jan. 25, 2015

in General News For All Sites by Brent Yonts
January 25, 2015 410

MCCH Offers Free Screenings at the Love Your…

in Local (Lakes) Top News by Kyser Lough

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 © 2015 SurfKY News Group, Inc.  •  Terms of Use  •  Site Map

social fbsocial twsocial yt
social gpsocial flr subscribevideoitunessocial rss