I have $20,000 and don't know what to do, I need help!

[Anonymous]

I have a dilemma I need some with.  I recently sold my house and have $20,000 left over.  I am not going to purchase another house until I finish school in about 5 years or so. 

History:

Bankruptcy in 2001

Late on mortgage loan (45 days) in March 2008

Student loans of about $35,000 that I am still under grace on--I anticipate accruing about $80,000 more in student loans before my education is finished

Signature type loan from CitiFinancial $7500 balance

9 credit cards (between my husband and I) at 100% of my credit limit totaling $15,200

Medical bills $2000 (not sure if this is on my credit report or not, but the hospital does not charge any interest)

I don't know what I should pay off first.  Can somebody please help and tell me how I can raise my credit score most effectively with this money.

Thanks!

***this is my first post, please take it easy on me

[BungalowMo]

Since you mention your husband, the cards you have together & the sale of the house & $$ left over, I'm assuming all debts & monies are a group thing.

Student loans have a pretty low interest rate.  I'd hold off on those.

The Signature loan...what's the int. rate on that?

The cards...being maxed, I'm guessing the rate to be fairly high on those too.

I don't think I'd put everything on the cards.  Even if you took half, for instance, and put that into a high yeild savings acct, that would start up a nice savings acct for you.

Take the other half & go through each bill...what has the highest int. rate?  Highest balance?  Divvy those up & put a nice chunk on each one. Use your regular income to pay down the bills.  Maybe now & then take a look at the savings acct...got an xtra 100 in interest? Put that on a high balance card that month (or maybe 50 on two) This is xtra...besides the normal payment.

Don't try to get out of the hole all at once.  Try & keep that 10k in your savings.  That is your cash builder!  You'll gain some sweet interest as long as you don't dip into that original 10k.

But...that's JMHO 

Message Edited by BungalowMo on 05-23-2008 08:35 PM

[Anonymous]

Paying off your credit card debt will raise your score the most and fastest double wammy.

[marty56]

Nuke the CC debt, then the CFL.

[llecs]

Make sure that $20k isn't taxable!!!!

[Anonymous]

what a good point.  That would really suck!

[Anonymous]

My vote is CCs completely and medical bills if they aren't on your CRs yet. Couple thousand in savings.

[Lel]

I recommend paying off your medical bills first. Even though they don't charge interest, if you are very late then they may send it to a collection agency, which will damage your credit further.

Next, pay down your highest interest rate credit card balances. Make sure you are able to make minimum payments on all accounts, however.

[Anonymous]

I'd pay the credit cards in full and as much of the line of credit as you can. Then focus on the medical bills and rest of the line of credit with your income. I'd also cut up the credit cards so you don't find yourself in the same position 6 months from now.

[Uniqua]

If you don't know what to do with that $20K, I sure do. Give it to me!