If you previously purchased a car at a high interest rate there is no need for you to continue paying that rate. Refinance your car loan with E-LOAN today and you can save a bundle.

A few years ago I discovered E-LOAN and used them to refinance my old car loan. Not only was the process painless and simple but I was able to save a lot of money with my new lower interest rate.

Refinancing a used car loan is one tool that many never think of, yet it can free up a lot of money each month. If things are tight you may be able to extended your loan out further and get more savings each month. Of course doing this you will probably pay more over the life of the loan but it can give you the breathing room you need today to make ends meet. As things improve for you then double up on payments and pay the loan off early. If you do that you can actually save a bunch of money.

New Site Features

I had a few free minutes the other day and put together some quick pages of coupons, free shipping offers and sweepstakes that can help save you bundles. Worth a look.

And Now For The Questions of The Day

Fred Asks…

Q: Steve,

I have been insolvent quite a while now and I'm delinquent with payments to about five different creditors. One of them won a judgment against me and I will be paying them 10% of my income now until the debt is paid. Besides the original debt, there's at least $1000 in attorney and court fees tacked on. During the judgment, the other creditors have a "stay" that keeps them from taking action against me too. As far as I know, they can still go after their own judgments, but would have to wait until their turn to collect. Before the judgment, I didn't have enough cash to set up payments that would satisfy all of them. And if I chose one or two I wanted to pay first, another one could interrupt the process by getting a judgment against me. So it seems like the creditor who files a judgment first wins. Now that the time is approaching that the first judgment will be paid, I dread the thought of what the other creditors are going to do. I can't make any arrangements because one of them will surely bring another judgment. Can I just negotiate with the next creditor I want to pay and agree to a "judgment" but without the added court costs? I feel I'm in a position where I can't decide who or how to repay my debts, but instead just keep taking the beatings one by one. I was hoping to avoid a bankruptcy, but the way the system is structured, it's just about the only option that is recognized.

A: Let's look at bankruptcy for a second. I always hate to see people not consider bankruptcy as a tool in the solution for fear of what they may think about it. Let's take the emotion out of this for a second. Bankruptcy is a legal tool that you can use to discharge problem debt. I urge you to find a local bankruptcy attorney. Looking for a lawyer? Be smart and safe! Review the backgrounds of pre-screened local attorneys-then decide who to call. You can also open your local phone book and find a bankruptcy attorney in your area. Ask them all the questions you can think of and you will walk away better informed about the realities of bankruptcy in your situation.

You can always think about approaching the creditors proactively and negotiating a repayment plan that fits before they go for a wage garnishment.

While it is possible to negotiate these debts on your own, I think you will be a lot better off if you find an attorney to negotiate these for you. The attorney can serve as a buffer between you and the creditor, will not be emotionally manipulated by the creditors and will not agree to the wrong deal out of fear.

Ossie Asks…

Q: I am in the process (thru a professional) getting my credit history cleared but at the same time I still have now "very bad credit" because I've worked out a deal with a company that as soon as they have enough of my money accumulated will make an offer to settle my debt. My questions is: how can I get a credit card, which I only want to have for "emergency only". Is there a possibility of my acquiring a credit card at this time without getting turned down? Thank you for your time in reading my question and God bless you... Ossie

A: Ossie, here is my credit rebuilding guide. You should be able to rebuild your credit quickly. You are wise to act now. While the negative marks on your credit report are still active until the debts are settled, if you start to rebuild now your time on the new cards will be greater and will give you a bigger boost than if you waited until the current mess is over with.

I am a huge fan of debt settlements. They are one of the last and most effective tools to eliminate your debt without bankruptcy. Sure your credit can take a hit from it but it is simply not bankruptcy.

If you would like to investigate the advantage of settling your debt you can also contact my friends over at the nonprofit group Springboard.

Chris Asks…

Q: Hi Steve,

I heard about your site from a news column in my local paper.

I had a nervous breakdown last July due to job related stresses. I was out of work with disability payments until the end of October then no disability pay or any work through mid Feb. I was able to get a new job that would have little stress but also little pay. The question I have is should I use my 401K to pay off as much of my credit card and car loan debt as possible so I do not fall into a bankruptcy?

Chris

A: Chris, that would probably be a big mistake. See my previous answer to Ruth

Jennie Asks…

Q: I am 32,000 dollars in debt. I contacted consumer credit counseling and they said they could help but I need $681.00 more a month than I make. I am even considering bankruptcy. Do you think I should?

A: Jennie, maybe? Here is what I do know, your income is currently not sufficient to meet your expenses or your expenses are too high for your income. I'd strongly suggest that you review the "Get Out of Debt" Emergency Checklist and the Money Saving Tips to see if those tips can make a the difference.

Now that you have contacted credit counseling I think it is only smart and prudent for you to discuss your options with a bankruptcy attorney so you can hear from both sides and then you can make an informed and educated decision about what path you want to follow.

You should also examine the benefits of debt settlement as well. My friends over at Springboard can help answer your questions about it without any obligation.

Tracy Asks…

Q: We are in a financial crisis. Due to losing my job and my husband's boss getting behind at times over the last year we had to resort to credit cards. We are completely overextended and have depleted our savings. I'm desperately looking for work to due from home as my physical situation is limiting the possibilities for outside employment. This is the first month I have had to keep postponing the house payment and I am scared to death. We have 2 wonderful young daughters and a fantastic home and I am afraid we are going to lose everything we have worked so hard for. I don't know what to do anymore. I can't sleep. We need help and I don't know where to get it. Please let me know if you have any advice or ideas.

Thank you

A: Tracy, I still remember my nights of midnight panics when I was going through my financial problems in 1989. It is no fun at all. The stress and strain is sometimes debilitating.

In a perfect world I'd ask you to step outside your situation for a moment and look at it. It is what it is. All the worrying in the world is useless because what we really need here is a plan of action that you can follow to begin to use your worry energy towards a positive outcome.

If you are a person of faith, this is also a good time to ground yourself in your beliefs. The power of prayer can be powerful and leaning on your higher power right now can be comforting.

I understand the situation you were in. Due to unforeseen events you found yourself short and resorted to taking out loans (using the credit cards) to make up for the deficit. Those of us reading this right now can certainly understand how that can happen but that does not change the facts. The facts are that when you obligated yourself for that credit card you agreed to certain repayment terms. Technically you are in default of those terms at the moment and the credit card companies are simply going to pursue you for the money you agreed and promised to repay.

At this point you should prioritize your expenses. Necessities and secured debts should be paid first. Debts like food, shelter, clothing, food, heat, etc. Other debts like credit cards should be paid last if there is any money remaining. This is not a long term solution, but a short term approach to properly dealing with your debts until a solution is in place,

The basic law of mortgages is "You've got to pay to stay." Knowing that, your home is clearly at risk unless we can increase household income or reduce expenses. See my money saving page for tips and suggestions.

I'd like for you to consider having a family meeting and sharing the situation with the kids. Kids are so smart and they know when something is going on. It is my experience that it is better to include them in the situation but make sure the conversation is not about your fears. They don't need to be confronted with what might happen but what the current reality is. You will be surprised how much kids want to help parents through these trying times.

One of the reasons you can't sleep is because you are not moving toward a viable and real solution. You are sitting in depression, fear, pain and anger about your current situation. It is normal and natural. It is a process that all of us that have had financial problems go through. We feel your pain.

Starting today let's use 90% of that worry energy to investigate and implement real solutions. I would suggest that you contact a bankruptcy attorney, you can use the link above, and investigate how bankruptcy might be applicable to you and how it might help you to save the house.

I also think at the same time you should seriously follow my money saving tips right now. Every dollar you can save right now is an additional dollar that does not have to be earned.

Keep us all posted on what happens. We all care.

Your Money Coach For Comfortable Success,^sm