Tag Archive: money

  1. The White House Explores Student Loans and Bankruptcy Options: What You Need To Know

    Leave a Comment

    87801562The Wall Street Journal reported recently that The White House is looking into ways to help people who are burdened by insurmountable student debt to alleviate some of that stress through new bankruptcy options. Currently, neither federally backed or privately-issued student loans can be discharged in a bankruptcy, but through the Chapter 13 Process you can force an income based payment on your student loan servicer for 5 years.

    The plan that the White House is exploring could go a step further than this. However, there are few things you should know about the plans that The Obama Administration is exploring, and points to consider if you have crippling student loans.

    1. This Would Only Cover Private Student Loans.
      It is likely that this plan would only cover the privately issued student loans from financial institutions, not the federal student loans that most college graduates have. As noted in the Wall Street Journal Article, these private loans account for somewhere around 10% of the loans out there, so it’s nowhere near a majority of the population.
    2. It Would Likely Help with Debt for Unaccredited or For-Profit School
      Many of the private loans that are taken out by students who are attending unaccredited institutions, and for-profit schools. Because of issues in recent years with these schools using Federal Student Loans to make a profit, private loans have become a bigger part of paying for these kinds of degrees, which in many cases aren’t worth what borrowers pay for them.
    3. Private Loan Servicers can be Ruthless
      Part of the reason this may be a helpful choice is that the servicers of private student loans can be ultra-aggressive in their collection efforts. They know that these loans are non-dischargeable and fully use all options available to them including wage garnishments.
    4. Many Private Student Loans include Parents as Co-Signors

    While a borrower may have ensured the benefit of their education, student loan servicers don’t differentiate between parents and students when collecting their debt. This measure would help to lessen the burden on parents that have co-signed for private student loans. However, be aware that filing a Chapter 13 Bankruptcy now for student loans can help protect co-signors from collection because the Court can enter an order protecting co-signors if one of the parties files a Chapter 13 Bankruptcy.

    Unfortunately, while this bill may add some additional tools to our arsenal for managing student loans this relief may never actually pass the Republican controlled Congress.

    Until we find out what is going to happen, there are still options; if you have federal or private student loans from creditors who are being overly aggressive, or if you can’t afford your student loan payments, or even if you just want some options, call us at 1-877-332-8369. We will give you a consultation and you can find out more about how the Debt Doctors can help you manage your student loans and help you prepare “for life after debt”.

     

     

     

  2. Savings: The Cornerstone of Financial Health

    Leave a Comment

    In America, it has been ingrained in our financial psyche that our credit score is an important indicator of a healthy financial outlook. The truth is, your credit score is only an indication of your ability to engage in the behaviors that benefit your bank. For instance, the more you use credit and pay the bank, the more your credit score goes up. However, your ability to save and pay yourself isn’t even considered.

    If you have money in the bank, you can pay for unexpected expenses, buy the things you want and  earn interest instead of your bank earning it in your place. So how do you know if you have a healthy financial situation? Here are some good indicators:

    1. You have more savings than credit card debt.
    2. You have a set amount every month that you save.
    3. You earn more interest than you pay every year.
    4. You have enough money saved to weather a loss of income for a period of time (you should save up for at least two months of lost income) and have enough money saved to manage life if you have a serious medical issue.
    5. You have money saved for unexpected repairs.
    6. You’re maxing out your retirement savings.

    If you can check off those six items, your financial situation is healthy and it’s not likely you will need a Debt Doctor anytime soon. But if you can’t check them off and credit cards, a failed business or overspending on your house is keep you from saving, give us a call and we can develop strategies to reduce expenses and start saving today. Stop paying your bank and start paying yourself.

The Debt Doctors

607 College Street, Suite 101
Pittsburgh, PA 15232

© 2024 Debt Doctors. All rights reserved.