Should I sell assets to clear up debt?

[Joeycamaro]

Hi, new here, thanks for looking. Basically I'm looking to pay off a 401k loan that would clear up $700/month. The loan was taken at 25k to clear up a bad chapter 13. I've paid it down to 15k so far and I'm pretty sick of it. I'm 37, ready to start paying off my house and rebuild my financial life. For the record, I'm not doing too bad currently financially, but I could only afford about $100 extra a month to pay on this loan. I have a hot rod I built, worth about 15k, but might only sell for 10k due to the market and such, but would save me $500 a month that I could use to finish off the rest of the loan.

So my question is, when do you start selling stuff? The loan is matured in 2 years, should I wait? I love the car, but it's just a car. It will however have more value as time goes by, but will need more maintenance as well.

[Fishindude77]

Clean up your debt as quickly as possible, by whatever method you can. Sounds like a no brainer to sell the car.

[Gailete]

So my question is, when do you start selling stuff?

Before you filed for bankruptcy. If not then, then yesterday, and if not yesterday, then today. It is always a good day to sell what you can to get out of a bad financial problem. And yes it can be hard. At one point we were so strapped I sold my top of the line sewing amchine and all it's parts like embroidery designs. Eventually things were better and hubby let me get a replacement.

[Joeycamaro]

Thanks for the advice. I feel the same way, it's convincing my wife otherwise. The car holds some sentimental value because I've been building it for 10 years now, but the thought of starting a debt free life just seems so much better to me. Plus some of my debt is from the car.

[Gailete]

Sentiment isn't going to pay for a room over your head when you are old and feeble. Getting rid of your debt now will help you be able to plan for a retirement that doesn't include a box under an underpass somewhere.

I think this sort of thing, the sentiment, or the deparate NEED to have something even if you don't use it, is what is leading people to the poor house. They just can't release some of their possessions. My ex, the one that got us in $42 credit card debt, hauled a bunch of stuff from his old house to mine, then when we broke up and he didn’t have a place to put it all, rented a storage unit to hold all this stuff that he never touched or looked at except when he moved it. I don’t know what he has done with the junk since then, but at the point of renting the that unit, he was buried under debt and couldn’t afford to store anything, so it makes the sentiment that much costlier.

In your case, since there is a limit of when you can go bankrupt again, you must get your financial life in gear, however you need to. If you wife is the one that doesn’t want to get rid of that car, can she earn the money that it would bring? I doubt she wants that car so much she would be taking on that much more financial responsibility.

[~bs]

For the record, I'm not doing too bad currently financially, but I could only afford about $100 extra a month to pay on this loan.

not trying to jump you, but I'd disagree. If you reread what you wrote, I'm sure you'd agree as well?

You probably should look into getting your financial house in order, which would include selling extra "stuff" and cutting back on lifestyle. Also regarding selling the car, there is no better market timing than right now. If you can only get 10k now (normal to take a loss on a built sports car), what do you think that would look like if we were in a recession?

[disneysteve]

I agree that the answer to "when do we sell stuff?" is NOW.

If you'd like more detailed advice, it would help if you posted your income, expenses, savings, and debts.

[autoxer]

I sold my sports car 10 years ago, when I decided saving for a house was more important. I still miss the car, but never regret the decision.

I do plan on getting another fun car, but it probably won't be until I hit a certain big net worth goal.

[~bs]

I sold my sports car 10 years ago, when I decided saving for a house was more important. I still miss the car, but never regret the decision.

I do plan on getting another fun car, but it probably won't be until I hit a certain big net worth goal.

I did the same. And bought a sports car afterwards once I was comfortable enough doing so.

I really would like getting another faster sports car, had this one for 9 years already, but wouldn't make sense to do so from a financial and practical standpoint. Car is low mileage, still looks really good, runs well. Top speed is almost 190mph, which I will never come close to pushing. So swapping this one for another would be like a female swapping luxury handbag brands. Nice to do, but waste of money.

[Gailete]

I did the same. And bought a sports car afterwards once I was comfortable enough doing so.

I really would like getting another faster sports car, had this one for 9 years already, but wouldn't make sense to do so from a financial and practical standpoint. Car is low mileage, still looks really good, runs well. Top speed is almost 190mph, which I will never come close to pushing. So swapping this one for another would be like a female swapping luxury handbag brands. Nice to do, but waste of money.

Stupid question, but why do you need a car that goes 190 and where do you drive it?

I made the mistake once during a discussion of purses at work one day saying that I didn't know why anyone would pay $100+ for a purse (late 80's) and one of the women got a funny look on her face. Someone told me later that the upset lady had a 'name brand' purse that was well over $100. I can't figure out why anyone wants to tote around anything advertising some designers name. It was an ugly purse in my opinion as the fabric had the designers name scrawled all over it over and over. I wasn't even aware then that there were purses in the $1K range much less in the $20K range! Strange office I worked in. Before the end of my first week after yseveral years of wearing a nursing uniform, I was repeating what street clothes I had in the office. The girl next to me came to work for a month straight in a different outfit! She also wore about $10K worth of rings on her fingers! I was certainly in a whole other world. Never quite fit in. I'm not sure some of them could even define the word frugal.

[disneysteve]

Never quite fit in.

We know the feeling.

Our temple sisterhood has had a Coach bingo event a couple of times. My wife wanted to go to be supportive but had no interest in owning a Coach bag, even if she won it in a bingo game. Most of them are pretty hideous.

The last time, she actually won a game and was able to pick the least ugly of the bags that remained. She has used it a couple of times but it mostly resides in her closet. I wanted to sell it on ebay but she wouldn't let me.

[~bs]

Stupid question, but why do you need a car that goes 190 and where do you drive it?

some people drive for fun, some people drive out of necessity. Some people go to disney land for fun (and I do know many adults with no kids that go), some people go mainly as a chore for their kids.

top speed is only 1 indicator of a car's performance. As I drive for fun, and do not race, buying a car that can perform better than the 190 is probably pointless. I brought that up simply to make that point. You can sorta tell the performance level of a vehicle by the top speed. Most exotics or high end sports cars have top speeds 200mph+. A car that can accelerate faster would be nice, but more likely to get me in trouble, and the cost would not justify the expenditure. And testing the top speed would likely end up with me in jail, best case scenario. Worse case, I'd end up dead and killing others.

The cars I like to buy are just about the most uneconomical a car you can get. 2 seaters, whether convertible or not. The reason? Because they are FUN!

[Gailete]

The cars I like to buy are just about the most uneconomical a car you can get. 2 seaters, whether convertible or not. The reason? Because they are FUN!
Like

Well that is fair enough. Before my arthritis started bending my back I used to be 5'10", wasn't impressed at all with cars, I only wanted to not bump my head getting in them, that they had 4 wheels and took me where I needed to go. Now that I have titanium knees, I added another requirement - I have to be able to get my still long legs into the vehicle. Those with the high sides on the floor at the door opening (I'm sure there is name for that spot) tend to block me and long legs, big feet, and knees that can only bend 90 degrees from getting in cars. I haven't been able to get into most care for over 10 years now so very glad that I'm not 'into cars'! I am into Chrysler mini-vans though.

Now though, ask me why I spend so much on a tol of the line sewing machine?? Uh cuz they are FUN ! My latest one that we swapped out my last machine for has one button that is worth the entire cost of the machine. It raises and lowers the presser foot from the front of the machine instead of lifting and lowering a lever in the back of the machine that plays havoc on my right shoulder That is my excuse and I'm sticking with it!

Thanks for answering and not making me feel stupid.

[Eagle]

Thanks for the advice. I feel the same way, it's convincing my wife otherwise. The car holds some sentimental value because I've been building it for 10 years now, but the thought of starting a debt free life just seems so much better to me. Plus some of my debt is from the car.

Sounds like you have a path forward!

I'd ask her what is more important to her...

1. Financial freedom or a car with sentimental value?


2. Also is she at all involved with the budget or finances?


3. Does she bring in income and does she view this debt as hers too?

[~bs]

Well that is fair enough. Before my arthritis started bending my back I used to be 5'10", wasn't impressed at all with cars, I only wanted to not bump my head getting in them, that they had 4 wheels and took me where I needed to go. Now that I have titanium knees, I added another requirement - I have to be able to get my still long legs into the vehicle. Those with the high sides on the floor at the door opening (I'm sure there is name for that spot) tend to block me and long legs, big feet, and knees that can only bend 90 degrees from getting in cars. I haven't been able to get into most care for over 10 years now so very glad that I'm not 'into cars'! I am into Chrysler mini-vans though.

Now though, ask me why I spend so much on a tol of the line sewing machine?? Uh cuz they are FUN ! My latest one that we swapped out my last machine for has one button that is worth the entire cost of the machine. It raises and lowers the presser foot from the front of the machine instead of lifting and lowering a lever in the back of the machine that plays havoc on my right shoulder That is my excuse and I'm sticking with it!

Thanks for answering and not making me feel stupid.

No worries, "different strokes" and all that main thing is that you are able to both afford whatever it is you're interested in and you find it worthwhile for you.

I'm sure at some point in my life, I'd want something easy to get in and out of. my parents tried getting into my vehicle once and really struggled. It basically feels like you're sitting on the ground, or near to it.