Top 10 Dumbest Ways to Go into Debt

[JRScott]

http://www.foxbusiness.com/story/personal-finance/on-topic/dumbest-ways-debt/

[chloe0724]

I truly agree with all of them, but the last one hits home. About a year before we decided on BK, I cashed in my 50k IRA to pay down our debt. It was the only money we had. Even though I knew all the penalties, I was shocked at the amount of taxes we had to pay when we filed this year. So we wasted exempt funds and ended up in the same place.

Please don't use your IRA or 401k money!!!

[AngelinaCatHub]

My horror story

[WoodSprite]

I truly agree with all of them, but the last one hits home. About a year before we decided on BK, I cashed in my 50k IRA to pay down our debt. It was the only money we had. Even though I knew all the penalties, I was shocked at the amount of taxes we had to pay when we filed this year. So we wasted exempt funds and ended up in the same place.

Please don't use your IRA or 401k money!!!

Ditto, ditto, what she said, me too.

100K safely stashed in a completely exempt 403(b) gone, an unbelieveable, sickening tax bill, a super high income (on paper) that rendered me ineligible for a number of helpful programs, and in the end, it only helped the credit card companies. Don't do it!

[AngelinaCatHub]

Ditto, ditto, what she said, me too.

100K safely stashed in a completely exempt 403(b) gone, an unbelieveable, sickening tax bill, a super high income (on paper) that rendered me ineligible for a number of helpful programs, and in the end, it only helped the credit card companies. Don't do it!

[AngelinaCat]

Ditto, ditto, what she said, me too.

100K safely stashed in a completely exempt 403(b) gone, an unbelieveable, sickening tax bill, a super high income (on paper) that rendered me ineligible for a number of helpful programs, and in the end, it only helped the credit card companies. Don't do it!

I ditto what both you and 'Hub said. After we had gone through 'Hub's 401(k), and still in debt, we looked around for another fund to raid. I have a TIAA-CREF account that was started in 1976, and now has a nice little nest-egg in it. THANK GOD the way that plan was set up, and the contract written, I cannot touch it for ANY reason until I am at least 59 1/2. Otherwise that would have been gone too.

[domaingamer]

That is completely unfortunate for the person who co-signed on a car loan and got stuck with the 8k tab. Such a shame that you do something nice for someone and then go and abuse your generosity by trading up to get a new car, ringing up a huge debt and then sticking you with the bill.

[pa308]

I truly agree with all of them, but the last one hits home. About a year before we decided on BK, I cashed in my 50k IRA to pay down our debt. It was the only money we had. Even though I knew all the penalties, I was shocked at the amount of taxes we had to pay when we filed this year. So we wasted exempt funds and ended up in the same place.

Please don't use your IRA or 401k money!!!

I'm with you on that Chloe. A few years before filing I took out a 10k loan from my 401k to pay credit card debt. Like you said wasted exempt funds

[shabam]

Yep. My rule now is that I will basically give the people the money but realistically never expect them to pay me back. I also have them sign a legally enforceable promissory note if the amount is over $1k, with collateral. I refuse to cosign any loan or credit. Cosigning does not tend to end well.