Credit Card or Emergency Fund?

[Anonymous]

Hello, 

This year I have been working very hard to pay off debt as well as build an emergency fund. 

I am just getting to the point where I am only $800 away from not carrying any consumer debt... The end was so close. 

Then I found out I need to pay a lawyer $2500 -- this is something I should've taken care of a long time ago but I really need to do this now. I have even shopped law firms and this is the best price. 

I am a little deflated about the financial set back but am wondering where I should pull the money from. 

Between my checking and my emergency fund I have about 9k (I live in a very HCOL so this is not fully funded at all and I was going to do more of a focus on this once all my balances were 0) 

My total CL currently is 8900.

Would you put this on a credit card or pull from your emergency fund? 

[Yasselife]

I personally would focus on paying off the debt, I'm kinda in the same situation and it pains me seeing all my money leave month after month but, I know is the right road for me for the long run.

@Anonymous 

[Brian_Earl_Spilner]

If it's something large I wasn't expecting, I'll put it on a card and break it up into 3-5 payments since the interest would be pretty minimal. You could always put it on a card with rewards and just pay it off immediately if you don't want to carry any more debt.

[SouthJamaica]

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@Anonymous wrote:

Hello, 

This year I have been working very hard to pay off debt as well as build an emergency fund. 

I am just getting to the point where I am only $800 away from not carrying any consumer debt... The end was so close. 

Then I found out I need to pay a lawyer $2500 -- this is something I should've taken care of a long time ago but I really need to do this now. I have even shopped law firms and this is the best price. 

I am a little deflated about the financial set back but am wondering where I should pull the money from. 

Between my checking and my emergency fund I have about 9k (I live in a very HCOL so this is not fully funded at all and I was going to do more of a focus on this once all my balances were 0) 

My total CL currently is 8900.

Would you put this on a credit card or pull from your emergency fund? 

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I gather that you are paying interest on your credit card(s). Me I would pay the lawyer from checking and pay off the $800 credit card balances too. You can't earn any real money in a savings account, but you can save a lot of money by not paying interest on consumer debt. To me it's a no brainer.

[pizzadude]

Can you setup a payment arrangement with the lawyer, or do you have to pay the $2,500 in full now? 

[Anonymous]

I would not pull from the emergency fund personally - see if the lawyer will take 0% interest payments over time - if it's not a true emergency, don't use the fund.  I'm working on building one myself at the moment.  Best of luck to you!

[tcbofade]

Ask if the attorney will take payments. 

If that's not an option, use a credit card that currently has no balance, and pay it off as quickly as possible.

Good luck!

[RSX]

first i would ask if i could make payments over the next 6 months - in my experience the answer has always been yes

actually i usually receive the bill, and then send them a check for part of it - every month they would send another bill with the outstanding amount, and i would keep making payments - this is all without asking... they never called to complain and i would always close it out in 6 months or so

you could give them the first payment on your CC - say $500 to start

but if i had $9k in the bank, i wouldn't be holding onto $800 on a Consumer debt...

[CreditInspired]

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@Anonymous wrote:

Hello, 

This year I have been working very hard to pay off debt as well as build an emergency fund. 

I am just getting to the point where I am only $800 away from not carrying any consumer debt... The end was so close. 

Then I found out I need to pay a lawyer $2500 -- this is something I should've taken care of a long time ago but I really need to do this now. I have even shopped law firms and this is the best price. 

I am a little deflated about the financial set back but am wondering where I should pull the money from. 

Between my checking and my emergency fund I have about 9k (I live in a very HCOL so this is not fully funded at all and I was going to do more of a focus on this once all my balances were 0) 

My total CL currently is 8900.

Would you put this on a credit card or pull from your emergency fund? 

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I just want to say that you're being too hard on yourself. Look at the positive. First pat yourself on the back for your accomplishments, which are real!  Only $800 in debt and a whopping $9K saved. Believe me, there are a lot of members on this forum who would trade places with you--in a nanosecond, including me. 🤣

If you're paying interest on that $800 debt, pay that off.

Good advice from other members to ask attorney if that can be split into payments. However, if that's the retainer and you need the attorney to start immediately, that may not work.

You didn't provide your stats, but depending on your credit health, maybe applying for a 0% interest card or if you have AmX, use the "PlanIt" feature. 

But again, take joy in your accomplishments!!!! You deserve it. 

[Anonymous]

Another option. Join Wings Financial Credit Union. Then apply for a 0% APR purchase and Bal Trans credit card. Wings CCs also does not have a bal trans fee. Apply for one of the two that has a $5K minimum CL. The offer is good for one year. I was approved two days ago and I received a $7,500 limit. Just waiting for the card to come. Found myself in an eerily similar situation and was down to my LAST $1000 in cc debt then bam! An unexpected expense cropped up. This cc is my solution. 

Do I'd your balance by 12 and pay it off in a year. You could also transfer that $800 balance to that card. Just make sure you pay it off in a year to avoid interest at the end of the pro period.