When my wife gave birth to our first daughter together (we both have one each from our first marriages), our baby got stuck at the shoulders and went without air for seven minutes. Thank God everything worked out well and now my daughter will turn 7 next month. My wife lost a lot of blood during the delivery and had to stay in the hospital for four days and take a two blood transfusions. Our daughter spent a total of eight days in the NICU. A neonatologist came once a day to see her and we were billed $1500/day for his visits. Since then, my wife has had a lot of medical problems. She has had female problems, back problems, etc. During 2006/07 she had 15 major medical procedures in 18 months. Needless to say, we had a huge pile of medical bills. At one time, we owed over $18,000 to over 70 creditors. Everyone said, "just pay $10/month and they will stay off your back." Well, $700/month was going to be impossible, so we started getting turned over to collection agencies. We were planning on renting until all this was done, but got into a good deal on a contract-for-deed on the house we are in now, but are still paying 9% interest. We were able to purchase a newer vehicle in 2007, but are paying 19% interest because our credit was so bad. Well, I just mailed our last payoff for $1100, so now we are debt free (except for the house, car, and student loans of course). We do not have credit cards, store credit cards, or any other credit.
To the now:
I have (or will have) payoff letters from these medical bill collection agencies and they have (or will) remove the items from our credit reports. My question is this, do I finance a new(er) car to lower the interest rate, OR refinance the house first to a lower interest rate. Finally, can I do both at the same time?
posted
First, congrats for getting out from under all that. Good for you!
Do you have a bank (or credit union) that you do business with? Savings account, or at least a checking account that you've had for several years? If so, and it's a bank that does mortgages and car loans (Chase, CitiBank, most credit unions, and many others), you might start by making an appointment with them and see what they can offer you.
Now, about those student loans. Please tell me you're not in default on them? Are you still making standard repayment, or did you request forbearance or deferment from the lender(s)? Or perhaps you switched to one of the payment plans based on income?
Posts: 32919 | Registered: Mar 2003
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posted
Thanks. We did not want to file for bankruptcy, but thought we would have to. We just buckled down and got it paid off. We probably could have paid it off earlier if we canceled everything and never ate out, but how much fun would that have been.
I was current on them, but took the deferment since I am taking half time this year. This also freed up a little money for me to pay off these medical bills.
The bank I go to Bank of Oklahoma is pretty strict (which is good, they didn't take any bailout money) and I have heard people with decent credit note getting anywhere with them. I am going to try them first.
Posts: 1766 | Registered: Feb 2006
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posted
Staying current on those student loans is a very good thing. Make sure you bring that up as proven ability to pay.
Taking what half time? Classes? Is that reducing your income? Because a bank may not like that. (Shortsighted of them if so, but they may be concerned about your current ability to pay if your income is reduced.)
Posts: 32919 | Registered: Mar 2003
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posted
Yes, I'm taking 2-3 classes a semester. It is not reducing my income, I still work full time+. My company reimburses me for tuition, so all I have to pay is books.
Posts: 1766 | Registered: Feb 2006
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posted
I would refinance the house first, because it is surely the larger debt. A smaller interest rate will save you more there than a smaller rate on the car.
Then, try to refinance the car.
Good for you for paying everything off. Medical bills are, I think, the leading cause of bankruptsy.
Posts: 26077 | Registered: Mar 2000
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quote:Originally posted by brojack17: Yes, I'm taking 2-3 classes a semester. It is not reducing my income, I still work full time+. My company reimburses me for tuition, so all I have to pay is books.
Excellent!
Yeah, if you're in school, definitely taking the deferment is the way to go. And hopefully at least some of the loans are subsidized, so they're not accruing interest during the deferment?
Posts: 32919 | Registered: Mar 2003
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posted
Yep, they sure are....income has risen about 30% on average the past 10 years, but medical expenses have risen over 100% during the same period.
Posts: 15082 | Registered: Jul 2001
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