Help help: I have around $15k in debt and I haven’t been able to pay the minimum payment in almost 2 months now. - Help.com

You know that your going to have to pay taxes no matter what, so pay your debt off and start over. Hope this helps :-)

will i have to pay the taxes/penalty this year or next. I only ask because you have 60 days to roll it over so if i leave mid november then technically the year ends before the 60 days.

You pay taxes as soon as you take it out for cash as far as roll over you dont pay taxes if can prove that you put it into another retirement account.

Never take money out of your 401k to pay for anything unless you are dyeing and need the money to pay for a new liver. In the long run it is simply not worth it; study after study after study shows that taking money out of your 401K leads to losing more money in the long run.

Besides if you owe 15K and only have 16K in your 401K after the taxes and penalties you will not have nearly enough to pay off your debt. They will take more than 10% away from you on early with draw and you still owe 1K on your 401K.

The fact is in the long run you will be much better off buckling down and acting more responsible for the next few years as you pay down your debt the normal way.

Besides that; if you where to pay down your debt with the 401k what is going to stop you from running up the credit cards again. Unfortunately people who use a quick way to get out of credit card debt, using 401k or debt consolidation, never gain the discipline to keep them selves out of the credit card trap again; because they simply never go through the pain they need to learn. There is a high probability that if you pay down your debt in this manner you will simply be back in this same passion in a few years.

Your first move ought to be to change your life style. Go back and live with your family, or find the cheapest apartment to live in, even if its just a room in someone else house. Cut every expense that is not needed; like your cell phone or taking that girlfriend out on dates. Get rid of a car you have a loan on and get one that is much cheaper. Find any and every way to pay down your debt as soon as possible.

This will suck for the next few years; but once you are down you will be in a much stronger position to take on your life. Whats a few years of pain when it helps to insure the rest of your 60+ years on this planet are good ones? Especially after you just lived up the last few years.

Anonymous wrote:
will i have to pay the taxes/penalty this year or next. I only ask because you have 60 days to roll it over so if i leave mid november then technically the year ends before the 60 days.

You pay in the year you take it.

I’d be leaving my job to go to another that pays more. I don’t have a car, can’t move home because my parents live to far away, don’t really have any actual assets. I budget going out very tightly but my paychecks are 1350 biweekly, my rent is 1k and my other credit bills utilities are about 600-700. so it’s not like i’m living an extravagent lifestyle. I can barely make minimum payments and actually am behind right now. I was thinking of taking the 401k out so that I don’t further kill my credit. Obviously i plan on buying a home and at some point int eh future i’ll be making much more money. I just don’t think i’ll be making enough within the next 1-2 years to take care of the debt.

If you have 15k debt you must have been living a more extravagent lifestyle than you should have.

But if you are paying 1k in rent and 700 in bills where is the rest of your money going? You should have 1K left over our of your pay cheaks a month.

Consider finding a job closer to your famly.

I was living over my means but I cut back a year ago when it got this bad. The other 1k goes to food, gym, phone, commuting pass. Leaving me with around 400 a month

Well than get rid of the gym and use the great outdoors
Get a rid of the phone
and learn to budget your foob better.

And what do you do with that 400 a month?

How can you live without a phone? How do you call your family or get job interviews?

I try to live with 400 a month, things like renting a movie, drinking a beer, getting a haircut, buying soap.

soap and a haircut you need; a movie and beer can be done with out.

There are plenty of phones that you can use to call your famly on for free if you just try to find them.

As for job interviews, get your self a prepade phone put $20 it and dont ever use it.