Quickest way to pay off catastrophic credit card debt?

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financeperchance
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Quickest way to pay off catastrophic credit card debt?

Post by financeperchance »

It's funny because with the recent threads on "spouse reveals hidden debt" I have just had my own issue with this. Long story short, turns out my wife had secret CC debt from grad school that, thanks to the magic of compound interest, is now about $60,000. She has been working full time, secretly using most of her meager salary to pay the credit cards while PRETENDING to be wasting the money because she feels humiliated by the debt and thought I would be angry and divorce her.

Anyway... my question is, what is the fastest way to pay all of this debt off? I am in the two-comma club, so I want to pay it off right away. However, I also don't want to have to post my own thread saying, "HELP! Vanguard has frozen my account for suspiciously large withdrawals."

I have thought about maybe withdrawing $2,000 a day for 30 days. But would that trigger some sort of investigation by Vanguard?

What would you do here? The interest charges are almost $40 a day, compounding daily, so I need to act fast. Thank you.
adamthesmythe
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Re: Quickest way to pay off catastrophic credit card debt?

Post by adamthesmythe »

It's your money. Apart from tax consequences (and a possible check to make sure it's really you)- what does it matter what amount you withdraw and when?
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Re: Quickest way to pay off catastrophic credit card debt?

Post by oldcomputerguy »

The first thought that comes to my mind is to contact your investment provider and explain to them that you need to pull $60,000 for an immediate need, and ask if they will have a problem with it. That way, they will at least be alerted to the upcoming transaction, and hopefully won't clamp down on it as possible fraud.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by BlueCable »

Sell $60,000 of whatever needs rebalancing and pay it off.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by financeperchance »

adamthesmythe wrote: Tue Dec 17, 2019 9:39 am It's your money. Apart from tax consequences (and a possible check to make sure it's really you)- what does it matter what amount you withdraw and when?
lol I agree. But with financial regulations being what they are, can you just do a funds transfer of let's say $50,000 from your VG money market account to your external checking account? I've had my VG account for 15 years so I'm pretty sure they know it's me. :)
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Re: Quickest way to pay off catastrophic credit card debt?

Post by financeperchance »

oldcomputerguy wrote: Tue Dec 17, 2019 9:41 am The first thought that comes to my mind is to contact your investment provider and explain to them that you need to pull $60,000 for an immediate need, and ask if they will have a problem with it. That way, they will at least be alerted to the upcoming transaction, and hopefully won't clamp down on it as possible fraud.
I thought about calling Vanguard, but then I saw this post here:
NYCPete wrote: Mon Sep 01, 2008 3:50 pm
dm200 wrote:One, almost certain way, of having being reported for 'suspicious" activity is to ask a financial institution either to bypass normal reporting or ask how to avoid being reported. Just asking could get you reported.
Actually, even asking will get reported. Back when I was a registered rep, one of my compliance requirements was an annual Anti Money Laundering course. One of the things that was required was if there was ever any inquiry as to what the "ceiling" was on amounts of money that could be transferred without triggering money laundering tracking, then that was to be immediately reported to the compliance officer. This reporting wouldn't necessarily lead to the transfer being disallowed, but was required.

Best,
Peter
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Re: Quickest way to pay off catastrophic credit card debt?

Post by Dottie57 »

Maybe getting a personal loan would be better and allow you and wife more breathing room and a much lower rate? Pay it off over two tax years?
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Re: Quickest way to pay off catastrophic credit card debt?

Post by retired@50 »

financeperchance wrote: Tue Dec 17, 2019 9:43 am
adamthesmythe wrote: Tue Dec 17, 2019 9:39 am It's your money. Apart from tax consequences (and a possible check to make sure it's really you)- what does it matter what amount you withdraw and when?
lol I agree. But with financial regulations being what they are, can you just do a funds transfer of let's say $50,000 from your VG money market account to your external checking account? I've had my VG account for 15 years so I'm pretty sure they know it's me. :)
Of course you can transfer the money... The sooner the better. Why on earth would you even think of doing this in 30 separate transactions, instead of one...??? Pay it off today!

Regards,
This is one person's opinion. Nothing more.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by financeperchance »

retired@50 wrote: Tue Dec 17, 2019 9:50 am
financeperchance wrote: Tue Dec 17, 2019 9:43 am
adamthesmythe wrote: Tue Dec 17, 2019 9:39 am It's your money. Apart from tax consequences (and a possible check to make sure it's really you)- what does it matter what amount you withdraw and when?
lol I agree. But with financial regulations being what they are, can you just do a funds transfer of let's say $50,000 from your VG money market account to your external checking account? I've had my VG account for 15 years so I'm pretty sure they know it's me. :)
Of course you can transfer the money... The sooner the better. Why on earth would you even think of doing this in 30 separate transactions, instead of one...??? Pay it off today!

Regards,
Okay, thanks, I needed to hear that. Will do.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by AlohaJoe »

financeperchance wrote: Tue Dec 17, 2019 9:43 am
adamthesmythe wrote: Tue Dec 17, 2019 9:39 am It's your money. Apart from tax consequences (and a possible check to make sure it's really you)- what does it matter what amount you withdraw and when?
lol I agree. But with financial regulations being what they are, can you just do a funds transfer of let's say $50,000 from your VG money market account to your external checking account? I've had my VG account for 15 years so I'm pretty sure they know it's me. :)
Of course you can transfer the money. I've done far more than $50,000 from Vanguard and I'm sure others have done far more than me.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by KlangFool »

financeperchance wrote: Tue Dec 17, 2019 9:43 am
adamthesmythe wrote: Tue Dec 17, 2019 9:39 am It's your money. Apart from tax consequences (and a possible check to make sure it's really you)- what does it matter what amount you withdraw and when?
lol I agree. But with financial regulations being what they are, can you just do a funds transfer of let's say $50,000 from your VG money market account to your external checking account? I've had my VG account for 15 years so I'm pretty sure they know it's me. :)
financeperchance,

I do a transfer of 10K to 20K regularly. It is never a problem. Especially for someone in the 2 commas club.

KlangFool
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Re: Quickest way to pay off catastrophic credit card debt?

Post by retiredjg »

financeperchance wrote: Tue Dec 17, 2019 9:43 am
adamthesmythe wrote: Tue Dec 17, 2019 9:39 am It's your money. Apart from tax consequences (and a possible check to make sure it's really you)- what does it matter what amount you withdraw and when?
lol I agree. But with financial regulations being what they are, can you just do a funds transfer of let's say $50,000 from your VG money market account to your external checking account? I've had my VG account for 15 years so I'm pretty sure they know it's me. :)
Of course you can. It should raise no suspicion at all. People transfer money in an out all the time.

However, I also don't want to have to post my own thread saying, "HELP! Vanguard has frozen my account for suspiciously large withdrawals."
I don't know the details of this, but I would not let it worry me at all. Likely there is more to the story or it is a simple rare mistake on somebody's part.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by 8foot7 »

BlueCable wrote: Tue Dec 17, 2019 9:42 am Sell $60,000 of whatever needs rebalancing and pay it off.
This. And cut her credit cards up.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by goingup »

Of course you can ACH $60K to your linked checking account. One click.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by mpsz »

Nobody cares about high-dollar ACH transactions, as there's a paper trail. If this was cash, it would be a different story. Take the $60k in one withdrawal.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by Watty »

financeperchance wrote: Tue Dec 17, 2019 9:37 am However, I also don't want to have to post my own thread saying, "HELP! Vanguard has frozen my account for suspiciously large withdrawals."
The big thing that might trigger a security alert is that if you added a new bank account or payee then transferred $60K to them right away.

Doing a series of smaller withdrawal might backfire and trigger a security alert since that would look like you are trying to avoid money laundering laws.

If you just write a check or transfer the money to your local banks checking account that has been set up for a long time that should not be a problem.

There is a chance that if you transfer the money to your local banks checking account that they may do something like put a five day hold on that money. Once the money is there you can call them to make sure that the funds do not have a hold on them.
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Summit111
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Re: Quickest way to pay off catastrophic credit card debt?

Post by Summit111 »

You have a serious marital and trust issue, not a financial one. I have a close relative who‘s wife did a similar thing. He discussed the issue with her, and settled her debt several times over. She continued her activity in secret, and when he found out for the third time, he divorced her.

She continues to live in a financially troubled situation with another failed marriage, bankruptcy, and financial infidelity.

Should you decide to stay with your wife, I would insist upon reviewing her credit reports along with yours, to ensure that no other shenanigans are going on.

Summit
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Re: Quickest way to pay off catastrophic credit card debt?

Post by retiringwhen »

First hand experience. The major issue that raises alarms is money moving between or out of accounts with different ownership (e.g, joint vs. individual) or in or out of untraceable (or difficult to trace) sources like check cashing services, or cash withdrawals/deposits, etc.

The reporting laws have to do with money laundering and drug/terror investigation. If they know where the money went, it won't ring alarm bells.

Taking a withdrawal from an investment account that has already been linked by ACH to something like a checking account should not run afoul of these issues. Caveat, there are fraud related controls that are different at every institution where patterns of funds movement could raise alarms.

Frankly, it seems to me that taking two phase approach may be best.

1.) Ensure you have an easily tracked path for getting the money from the investment account into the proper banking account. Run a trial run with maybe 20% of the necessary balance (or even less).
2.) Make a payment on the card with that money.
3.) A month or two later, do it for the whole pile if that is the plan.

My experience is that doing repeated small transactions will actually raise alarms in and of themselves if any of the fraud or money laundering triggers could be activated. There are actual legal cases of regular small transactions under $3,000 causing account seizures because the government claims that the transactions were designed to evade tripping the disclosure/reporting requirements. Lesson, do not structure the transactions to avoid reporting.

OTOH, We have moved 6 figure sized amounts multiple times between banks and investment financial institutions without a single hiccup, pre-discussion or alarms being triggered in a manner that impacted our ability to complete the desired transaction.

BTW, one way to ensure that the joint/individual trap is addressed to ensure that any and all sign-offs are completed by both owners on joint accounts when ACH type links are created. Same for links between individual accounts with different owners. It took us a while to fill out all the paperwork for these things at Vanguard, but moving money between those differently owned accounts is not an issue.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by Jack FFR1846 »

There's zero reason to divide this up. I've transferred a few hundred grand several times without a second thought. It's not uncommon. Just do it so you can both forget about this debt sooner than later.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by 8foot7 »

There is zero, read, zero reason not to make a single $60,000 transaction into your checking account. Even a new account. There might be a hold but trying to avert suspicion by breaking it up may actually draw more attention to your account and certainly will cost you in interest. Just make the sale, transfer the money, and be done with it. $60,000 is a drop in the bucket compared to some ACH transactions that happen every single day.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by unclescrooge »

financeperchance wrote: Tue Dec 17, 2019 9:37 am
I have thought about maybe withdrawing $2,000 a day for 30 days. But would that trigger some sort of investigation by Vanguard?

What would you do here? The interest charges are almost $40 a day, compounding daily, so I need to act fast. Thank you.
Pulling $60k in one shot is a lot less suspicious than 30 daily withdrawals of $2k.

Pay it off ASAP.

The bigger question is why is your wife afraid you will divorce her over. 🤔
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Re: Quickest way to pay off catastrophic credit card debt?

Post by Wiggums »

financeperchance wrote: Tue Dec 17, 2019 9:37 am I have thought about maybe withdrawing $2,000 a day for 30 days. But would that trigger some sort of investigation by Vanguard?

What would you do here? The interest charges are almost $40 a day, compounding daily, so I need to act fast. Thank you.
In terms of the dollar amount, it’s your money so you don’t need to transfer the money out in small amounts. I’ve moved $150,000 out in one transfer to purchase a CD

I’d pay off the loan ASAP.
Last edited by Wiggums on Tue Dec 17, 2019 10:59 am, edited 2 times in total.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by Afty »

Dividing the withdrawal into small chunks would be structuring, which can get you into trouble even if the ultimate use for the money is legit. https://en.m.wikipedia.org/wiki/Structuring
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Re: Quickest way to pay off catastrophic credit card debt?

Post by delamer »

Summit111 wrote: Tue Dec 17, 2019 10:26 am You have a serious marital and trust issue, not a financial one. I have a close relative who‘s wife did a similar thing. He discussed the issue with her, and settled her debt several times over. She continued her activity in secret, and when he found out for the third time, he divorced her.

She continues to live in a financially troubled situation with another failed marriage, bankruptcy, and financial infidelity.

Should you decide to stay with your wife, I would insist upon reviewing her credit reports along with yours, to ensure that no other shenanigans are going on.

Summit
I agree with the above.

I have a friend who went through a pattern similar to the above with her husband.

Sometimes people get into a hole because of a one-time financial problem and never repeat the behavior.

But often, past is prologue.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by Sandtrap »

delamer wrote: Tue Dec 17, 2019 10:59 am
Summit111 wrote: Tue Dec 17, 2019 10:26 am You have a serious marital and trust issue, not a financial one. I have a close relative who‘s wife did a similar thing. He discussed the issue with her, and settled her debt several times over. She continued her activity in secret, and when he found out for the third time, he divorced her.

She continues to live in a financially troubled situation with another failed marriage, bankruptcy, and financial infidelity.

Should you decide to stay with your wife, I would insist upon reviewing her credit reports along with yours, to ensure that no other shenanigans are going on.

Summit
I agree with the above.

I have a friend who went through a pattern similar to the above with her husband.

Sometimes people get into a hole because of a one-time financial problem and never repeat the behavior.

But often, past is prologue.
+1
Behavioral issues tend to have a life of thier own, refuse to die.

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Re: Quickest way to pay off catastrophic credit card debt?

Post by Lazareth »

Is it off-topic to suggest credit card debt negotiation? I know of an instance where American Express lopped off about 40% of a $40K balance in exchange for a lump sum payment. The 'forgiven' amount gets reported as 1099 income. It just takes a few calls to the collection dept. I recall the account has to be on the brink of going to outside collection. You and they both want to avoid that, so you offer that you are ready to pay X amount if they'll settle. Takes a bit of negotiation and poker face (it's amazing what you accomplish when motivated).
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Re: Quickest way to pay off catastrophic credit card debt?

Post by 8foot7 »

Lazareth wrote: Tue Dec 17, 2019 11:02 am Is it off-topic to suggest credit card debt negotiation? I know of an instance where American Express lopped off about 40% of a $40K balance in exchange for a lump sum payment. The 'forgiven' amount gets reported as 1099 income. It just takes a few calls to the collection dept. I recall the account has to be on the brink of going to outside collection. You and they both want to avoid that, so you offer that you are ready to pay X amount if they'll settle. Takes a bit of negotiation and poker face (it's amazing what you accomplish when motivated).
Perfectly legitimate strategy when the going gets tough but hard to recommend given OP is a millionaire and willing to pay the whole thing now.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by dm200 »

Yes indeed. Almost all credit cards now charge very high interest rates - even in this low interest rate environment.
turns out my wife had secret CC debt from grad school that, thanks to the magic of compound interest, is now about $60,000.
I have to comment that you seem to be handling this quite calmly and quite well - all things considered. $60,000 is a very large amount!

I wish you and your wife well!
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Re: Quickest way to pay off catastrophic credit card debt?

Post by Blue456 »

financeperchance wrote: Tue Dec 17, 2019 9:37 am It's funny because with the recent threads on "spouse reveals hidden debt" I have just had my own issue with this. Long story short, turns out my wife had secret CC debt from grad school that, thanks to the magic of compound interest, is now about $60,000. She has been working full time, secretly using most of her meager salary to pay the credit cards while PRETENDING to be wasting the money because she feels humiliated by the debt and thought I would be angry and divorce her.

Anyway... my question is, what is the fastest way to pay all of this debt off? I am in the two-comma club, so I want to pay it off right away. However, I also don't want to have to post my own thread saying, "HELP! Vanguard has frozen my account for suspiciously large withdrawals."

I have thought about maybe withdrawing $2,000 a day for 30 days. But would that trigger some sort of investigation by Vanguard?

What would you do here? The interest charges are almost $40 a day, compounding daily, so I need to act fast. Thank you.
I think people in here already gave you good advice. One last thing to remember. Cut up all the credit cards.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by frugalmama »

OP, I would take it out in one lump sum. I've made large transactions before and never had a problem. I agree with the fact that if your account has been linked for a while, they are less likely to be suspicious.

Additionally, while my spouse didn't hide his grad school credit card debt, I understand where your spouse is coming from as he was ashamed of it too as he was doing the best he could do at the time as he was putting himself through school and emergencies would come up. I too paid off all of that debt in one payment and 20 years later, my spouse is a great partner in our frugality. So, I don't think this necessarily means you need to need to cut up her credit cards as others are suggesting. I think it is going to be more of a trust but verify what is going on for a little while. Good luck to you!
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Re: Quickest way to pay off catastrophic credit card debt?

Post by deikel »

Sandtrap wrote: Tue Dec 17, 2019 11:01 am
delamer wrote: Tue Dec 17, 2019 10:59 am
Summit111 wrote: Tue Dec 17, 2019 10:26 am You have a serious marital and trust issue, not a financial one. I have a close relative who‘s wife did a similar thing. He discussed the issue with her, and settled her debt several times over. She continued her activity in secret, and when he found out for the third time, he divorced her.

She continues to live in a financially troubled situation with another failed marriage, bankruptcy, and financial infidelity.

Should you decide to stay with your wife, I would insist upon reviewing her credit reports along with yours, to ensure that no other shenanigans are going on.

Summit
I agree with the above.

I have a friend who went through a pattern similar to the above with her husband.

Sometimes people get into a hole because of a one-time financial problem and never repeat the behavior.

But often, past is prologue.
+1
Behavioral issues tend to have a life of thier own, refuse to die.

j :happy
Did you guys read the original text of the post ? I agree there is a general trust issue, but OP states it is based on shame of old student loans - not frivolous spending, which she pretended (and clearly did not bother OP at that time either).

BTW divorce is too late anyway, you married, you own half that debt and if there would be a divorce, most likely she would get more then half of the total assets anyway....so her reasoning for the hiding is off reality as well.

All those general misunderstandings of how the world works would worry me, but shame does odd things to otherwise rational people.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by Sandtrap »

deikel wrote: Tue Dec 17, 2019 12:46 pm
Sandtrap wrote: Tue Dec 17, 2019 11:01 am
delamer wrote: Tue Dec 17, 2019 10:59 am
Summit111 wrote: Tue Dec 17, 2019 10:26 am You have a serious marital and trust issue, not a financial one. I have a close relative who‘s wife did a similar thing. He discussed the issue with her, and settled her debt several times over. She continued her activity in secret, and when he found out for the third time, he divorced her.

She continues to live in a financially troubled situation with another failed marriage, bankruptcy, and financial infidelity.

Should you decide to stay with your wife, I would insist upon reviewing her credit reports along with yours, to ensure that no other shenanigans are going on.

Summit
I agree with the above.

I have a friend who went through a pattern similar to the above with her husband.

Sometimes people get into a hole because of a one-time financial problem and never repeat the behavior.

But often, past is prologue.
+1
Behavioral issues tend to have a life of thier own, refuse to die.

j :happy
Did you guys read the original text of the post ? I agree there is a general trust issue, but OP states it is based on shame of old student loans - not frivolous spending, which she pretended (and clearly did not bother OP at that time either).

BTW divorce is too late anyway, you married, you own half that debt and if there would be a divorce, most likely she would get more then half of the total assets anyway....so her reasoning for the hiding is off reality as well.

All those general misunderstandings of how the world works would worry me, but shame does odd things to otherwise rational people.
+1
Good points.
Yes. These discussions do bring in tangental topics that may sometimes be of value though not quite off topic, and can be interpreted in many ways.
Thanks for posting.
j
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Re: Quickest way to pay off catastrophic credit card debt?

Post by Sandtrap »

financeperchance wrote: Tue Dec 17, 2019 9:37 am It's funny because with the recent threads on "spouse reveals hidden debt" I have just had my own issue with this. Long story short, turns out my wife had secret CC debt from grad school that, thanks to the magic of compound interest, is now about $60,000. She has been working full time, secretly using most of her meager salary to pay the credit cards while PRETENDING to be wasting the money because she feels humiliated by the debt and thought I would be angry and divorce her.

Anyway... my question is, what is the fastest way to pay all of this debt off? I am in the two-comma club, so I want to pay it off right away. However, I also don't want to have to post my own thread saying, "HELP! Vanguard has frozen my account for suspiciously large withdrawals."

I have thought about maybe withdrawing $2,000 a day for 30 days. But would that trigger some sort of investigation by Vanguard?

What would you do here? The interest charges are almost $40 a day, compounding daily, so I need to act fast. Thank you.
Actionably:
1. It would be good to pay off the debt completely and healthy to start new going forward. (less stress).
2. Why not withdraw $60k if you have it and are able to do it without compromising your finances?
3. Why would Vanguard, or any brokerage, freeze an account for suspiciously large withdrawals?

FWIW: this is a great thing to work together on to resolve. It will get better!
j :happy
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Re: Quickest way to pay off catastrophic credit card debt?

Post by RickBoglehead »

I think it's great that OP is doing this immediately.

I think it's a perfect time for OP to sit down with his spouse and discuss the situation a bit more. What's missing for those of us on the forum is the demarcation of time. If this was a year or two, for me it would be a lot less serious than if this was 5 or 10 years, or more. A marriage should not have secrets - including one like this. It signifies a lack of understanding on how a spouse would react to an unpleasant surprise, which needs to be addressed by both spouses.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by criticalmass »

financeperchance wrote: Tue Dec 17, 2019 9:37 am It's funny because with the recent threads on "spouse reveals hidden debt" I have just had my own issue with this. Long story short, turns out my wife had secret CC debt from grad school that, thanks to the magic of compound interest, is now about $60,000. She has been working full time, secretly using most of her meager salary to pay the credit cards while PRETENDING to be wasting the money because she feels humiliated by the debt and thought I would be angry and divorce her.

Anyway... my question is, what is the fastest way to pay all of this debt off? I am in the two-comma club, so I want to pay it off right away. However, I also don't want to have to post my own thread saying, "HELP! Vanguard has frozen my account for suspiciously large withdrawals."

I have thought about maybe withdrawing $2,000 a day for 30 days. But would that trigger some sort of investigation by Vanguard?

What would you do here? The interest charges are almost $40 a day, compounding daily, so I need to act fast. Thank you.
Before paying it off, I would call the card issuer (or have the wife do the same), mention you've been having trouble paying, and ask if they are willing to forgive some/all of the interest in exchange for a lump payment. If you reach a loan officer, they may jump at this. In fact, there is a whole industry of doing that (for a fee), while you can do it yourself by asking nicely. Issuers like not having non-performing debt even more than they like receiving interest. You don't have to mention that you are ready to pay everything off either way.

A $60k electronic transfer in/out of a brokerage is nothing. Many of us have moved more to get new account bonuses. No need to call, just do the transfer when you are ready. Don't "structure" the payments across 30 days. Transfers get suspicious when there are questions or when is cash involved, not when moving from one FI to another in an electronic transaction.

Next, you need to ensure that this spending is behind both of you and won't be recurring. That is between you and your spouse. Perhaps you can read a finance book (see bogleheads.org) together. I recommend "The Millionaire Next Door," among others. I also recommend pulling free credit reports for both of you a few times of year. Everyone should be doing that.
MathWizard
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Re: Quickest way to pay off catastrophic credit card debt?

Post by MathWizard »

All this talk about cutting up credit cards is way off-topic.

The spouse was trying to take care of a problem which existed before the marriage, but just was not able to.
CC companies are glad to get you in over your head, and then require what at least
used to be called usury, and used to be a crime. (19% is a normal rate, 32% for a default rate.)

To shame the spouse is the opposite of what I would recommend.
deltaneutral83
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Re: Quickest way to pay off catastrophic credit card debt?

Post by deltaneutral83 »

MathWizard wrote: Tue Dec 17, 2019 1:29 pm All this talk about cutting up credit cards is way off-topic.

The spouse was trying to take care of a problem which existed before the marriage, but just was not able to.
CC companies are glad to get you in over your head, and then require what at least
used to be called usury, and used to be a crime. (19% is a normal rate, 32% for a default rate.)

To shame the spouse is the opposite of what I would recommend.
I don't think that was the issue. The issue of debt wasn't necessarily the problem, but hiding it once engaged it something a lot of people (and every well recognized and published relationship counselor) would be less than thrilled about.
SteadyOne
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Re: Quickest way to pay off catastrophic credit card debt?

Post by SteadyOne »

financeperchance wrote: Tue Dec 17, 2019 9:37 am It's funny because with the recent threads on "spouse reveals hidden debt" I have just had my own issue with this. Long story short, turns out my wife had secret CC debt from grad school that, thanks to the magic of compound interest, is now about $60,000. She has been working full time, secretly using most of her meager salary to pay the credit cards while PRETENDING to be wasting the money because she feels humiliated by the debt and thought I would be angry and divorce her.

Anyway... my question is, what is the fastest way to pay all of this debt off? I am in the two-comma club, so I want to pay it off right away. However, I also don't want to have to post my own thread saying, "HELP! Vanguard has frozen my account for suspiciously large withdrawals."

I have thought about maybe withdrawing $2,000 a day for 30 days. But would that trigger some sort of investigation by Vanguard?

What would you do here? The interest charges are almost $40 a day, compounding daily, so I need to act fast. Thank you.
Just pay the damn thing and worry about reporting later. You are legit so what is the problem?
“Every de­duc­tion is al­lowed as a mat­ter of leg­isla­tive grace.” US Federal Court
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BolderBoy
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Re: Quickest way to pay off catastrophic credit card debt?

Post by BolderBoy »

unclescrooge wrote: Tue Dec 17, 2019 10:44 amPulling $60k in one shot is a lot less suspicious than 30 daily withdrawals of $2k.
+1.

Doing it as 30 daily w/d amounts might make someone think you are "structuring" the w/d; structuring could raise questions.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect
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Cubicle
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Re: Quickest way to pay off catastrophic credit card debt?

Post by Cubicle »

I've moved >$100,000 into Vanguard at once, & >$70,000 out of Vanguard at once, which at the time was more than 10% of my total portfolio's value, without any problems.

Echoing "structuring".

Echoing that you can provide a legitimate paper trail. Let whomever ask questions. Personally I like challenges, & proving people wrong.
"Oh look another bajillion point declin-Ooooh!!! A coupon for pizza!!!!" <--- This is what everyone's IPS should be. ✓✓✓
RetiredAL
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Re: Quickest way to pay off catastrophic credit card debt?

Post by RetiredAL »

financeperchance wrote: Tue Dec 17, 2019 9:43 am
adamthesmythe wrote: Tue Dec 17, 2019 9:39 am It's your money. Apart from tax consequences (and a possible check to make sure it's really you)- what does it matter what amount you withdraw and when?
lol I agree. But with financial regulations being what they are, can you just do a funds transfer of let's say $50,000 from your VG money market account to your external checking account? I've had my VG account for 15 years so I'm pretty sure they know it's me. :)
OP, go with a single transfer.

6 years ago I needed to move $75,000 from my Dad's USAA account to his Schwab account via his WFB checking account. I attempted the transfer out of USAA via online, and it would not accept the transaction. So I called, and was told that they had a $50,000 daily transfer limit. I said OK, I'll just split it and resubmit. The agent said he could initiate the whole $75,000 it since the WFB linkage had long been setup. So USAA transferred to WFB and after it posted at WFB, I had Schwab suck it out of WFB. Other than the online daily limit issue, no one batted an eye. Everything was done in 3 days. My conclusion at the time was that even thought to me that was a lot of money, to these Financial People it was just a routine drop in the bucket.

Of note, the day after I initiated the suck by Schwab, Schwab said the funds were available for trade. I found it hard to believe the ACH could have occurred and posted with Schwab that quick. I know others have posted that the process turn-around at VG similar.
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Re: Quickest way to pay off catastrophic credit card debt?

Post by msk »

Most countries these days have a reporting requirement for any transfer >$10k, even if you carry that much cash over an international border. E.g. my kid's bank in Canada would not allow transfers over their mobile app if >$10k. But it's not a big issue. The bank has to indicate the use of the transfer, e.g. investment, house purchase, holiday travel or whatever they have on the local government reporting forms. Normally you never hear about it again, ever. And $60k is not that large. Just do it.

Next about that credit card debt. My DW had numerous CCs that I was not aware of that totalled to about that much. When I became aware, we walked over to her bank and I paid off each and had the bank clerk cancel each, leaving only one for emergency use/rental cars/etc. That was 10 years ago, So far, peace. Try to get the lady to allow you access to her credit record annually. What?! You don't trust me?! :shock:
Ostentatious
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Re: Quickest way to pay off catastrophic credit card debt?

Post by Ostentatious »

It’s probably been mentioned already but if I were you, I would negotiate the debt to a lower amount first before paying it off.
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8foot7
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Re: Quickest way to pay off catastrophic credit card debt?

Post by 8foot7 »

There is a absolutely no chance that you will lower the principal amount of credit card debt without going at least 90 days delinquent, and typically for any sizable reduction in the balance (think 40-60% off principal) you have to go right up to charge-off or even just past, at +/- 180 days. Other types of debt may be different, particularly if they are charging under market rate in interest, but you're never, ever going to talk a bank or credit union into forgiving part of the principal balance on a non-delinquent credit card account. It just isn't going to happen. Meanwhile, the 90 day late will kill your credit score and the charge-off, if you were to play that game to that extent, will torch your credit for at least 3-4 years and be present with some negative effect (that wanes over time) for 7.

You may be able to get them to waive the most recent month’s interest charges, though it would require a call and some pleading, and depending on the number of accounts you have and the number of different banks involved, you have to factor in how much your time is worth as well as the chance that some of them are going to say no.

Remember, they don’t want you to pay off the balance. They have no incentive to make it easy for you to bring your balance to zero. They'd prefer you carry a reasonable but heavy balance so they can continue to milk interest charges from you. Especially as this debt has long been incurred and your wife has proven she's a reliable payer. To change their opinion of her and your financial situation, you would need to take some concrete action that gives them the shakes, like missing payments. You can't just call up and tell them you've been having a hard time and need some help and expect that they're going to waive principal; you have to fall behind before their menu of options opens up, and there's a deep well of alternatives they will expect you to consider and in some cases try and fail before they will offer you significant settlements, like a 0%-over-60-months discharge plan that closes the account, or a reduced minimum payment for 3 months while they recapitalize the amount not paid on the backend. All the while your credit report has an atom bomb dropped on it.

Since you have the money in hand right now, and there is no ongoing hardship, I can’t imagine why you would torch your credit. If you had a smaller shovel and no money on hand and needed a boost, that'd be one thing, but you have the funds, so you should just pay it off and move on.
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