Jerry Wants to Know How to Repay Debts He Can’t Afford

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Jerry wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

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“Dear Steve,

I have a time deposit at the bank and borrowed 80% of it using the deposit as collateral. I already skipped 3 payments even for the interest alone.

My car is also mortgaged at another lending firm and I already skipped 2 monthly payment for my amortization. I have a small business but the income I get is just good for food.

Based on my situation above what can you advise or a remedy to do on my part. Thanks

Jerry”

Dear Jerry,

I suppose this is a variation of the good news - bad news situation. In your case, since you deposited the money with a bank and then took a loan using the deposit as collateral, the bank can take the money from your deposit to pay off the bank loan.

It might actually make sense to ask them to do that since it does not sound like there is a reasonable expectation that you will be able to get caught up on that loan again in this current economic climate.

The money that is leftover from your deposit, after paying off the loan, could be used to help bring the car loan current.

Of course if the car is not affordable at all with your current income, that is a different matter and bringing the car loan current may just give you a few more months with the car before it is repossessed if you fall far behind again.

I hope that helps.

Steve

Source: Jerry Wants to Know How to Repay Debts He Can’t Afford