How seniors can easily pay off credit card debt?

How seniors can easily pay off credit card debt?

Debt among seniors has increased significantly in the last decade (83%), as per the data given by the Federal Reserve. Due to this debt burden seniors may feel a huge financial pressure upon them. That pressure may force them to do more work even after retirement.
Despite having a decent income and social security, many senior citizens have to use credit cards to pay their basic daily expenses. The situation is getting worse day by day, as the cost of living is getting high whereas the income is static. As a result, seniors are getting more inclined to credit card usage. But the harsh truth is, paying off high-interest credit card debts will likely be impossible for them.

What options do seniors have for managing their debt?

When seniors come face-to-face with a huge pile of credit card debt, they may experience severe stress and anxiety. This situation may summon serious medical conditions and their life may be at stake.
There is one more small issue. Seniors might also feel embarrassed to talk about their debt problems with their family members and friends. They also hesitate to take help from professionals.
So, their problem remains unattended. They start to lose hope in this case and do nothing about it. Finally, they face abusive collection calls or file for bankruptcy.
But practically, if they look closely, few solutions are there to help. Let’s look at them closely.

a. Getting help from your close ones

While some seniors may feel embarrassed about discussing their credit card debt problems, many of them may try to share the issue with their family and friends. Often, just talking about the problem may open new ways to solve it, and alleviate stress and anxiety. If you are having a similar situation being a senior citizen, one of your family members, a friend, or any other special person, having good financial knowledge, may guide you to solve your credit card debt problems.
Sometimes, just a little help with budgeting and money management can be a big considerable help. Some family members may help you to pay off your debts by providing monetary help or extend loans with 0% interest. Alternatively, they might also negotiate with your creditors or collection agents if accounts have gone into collection.

b. Apply for a reverse mortgage

A reverse mortgage allows seniors (62 and older) to borrow money against the equity in their home. Seniors can opt for monthly installments instead of having a lump sum amount from the bank. The lender receives the money after the borrower sells off the home and pays back the loan. The same thing happens when the borrower moves out to another home or dies.
Seniors should own the home entirely, or have significant part of home equity before opting for a reverse mortgage. The home should be their primary residence. Reverse mortgages can be written on owner-occupied single family homes, multi-family homes and condos, and manufactured homes that are HUD approved and meet the requirements of the FHA. The money taken out from a reverse mortgage can be used for paying off debts, especially credit card debts.
There are certain criteria to get the loan. The title should be in the name of the borrower. Real estate taxes should be paid timely and at the time of taking out the loan, it should be updated. The house should be in good condition, else the lender or bank may call off the loan.
There are several types of reverse mortgages available to seniors, so they should find the right reverse mortgage that fits with the financial requirement of them.

c. Refinance your existing mortgage

Seniors may also refinance their current mortgage with a low-interest loan if they have a good amount of equity and a steady source of income. This way they can encash their ownership a.k.a the home equity when they need urgent money.
However, if they have owned the home for a long time and the mortgage is about to be paid off, then refinancing the entire home again with a new loan will be unwise. Considering their current age and the life span, logically seniors may not carry a 30-year mortgage for another 30 years.
It means they can never become free from the mortgage burden. It may sound harsh but it is true. Apart from that, they may have to pay much more interest over the life of their mortgage.
Refinancing your current mortgage and using the money to pay off credit cards may give you a temporary solution. But remember, being a senior it doesn’t give you total relief from debts. Converting your unsecured debt (credit card debt) into a secured debt (home mortgage) probably isn’t the best idea to become debt free.
But still, if you are in need of urgent big amount of money, you may try this option.

d. Take out a home equity line of credit

If being a senior you have owned the home for a long time, or owe much less than the house is worth of, you may take out a loan against the home’s equity. It is called a home equity line of credit (HELOC). By using this option, a homeowner may use his/her home equity and take out a line of credit when needed. Generally, HELOC comes with a low-interest rate, which is much lesser than a credit card. So, paying off credit card debt with the help of HELOC sounds like a good plan.
There’s a catch. Like refinancing mortgage, you are also putting your home equity in danger. Turning unsecured debt into a secured one is not good. This could affect the total liquid assets of the estate in a negative way. If things go wrong, your house may fall into the depths of foreclosure. Losing a home being a senior and due to foreclosure is a devastating situation.

e. Selling your assets

Sometimes, selling off their valuable possessions or assets can help senior citizens to pay off debt. But it should be a last resort to manage their financial problems. Imagine you are selling your house, car, boat, or any other valuable possessions just for making debt payments, how would you feel? Being a senior citizen you might have an emotional bonding with your assets. So, when you need to sell them off, the impact on you can be traumatic.
So, carefully consider all the probable situations before making any decision. Paying off unsecured debts such as credit cards isn’t always the best choice if it pushes you into a financial black hole. It is always better to consult your situation with a professional financial planner.

f. Taking help from a debt relief company

Seniors can take the help of a debt relief company to tackle credit card debts. Debt relief companies can negotiate with credit card companies and lower the total balance owed. Generally, the debt relief companies handle all the communications with the credit card companies, which can remove a lot of the stress and anxiety involved.

So, there are many options available for seniors to handle the burden of credit card debt. Getting out of debt is not easy. But it is possible even for seniors who live on a fixed income. Seniors, sometimes with help from family, should consider all possibilities and do their due diligence to find the right solution.

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Credit card debt is a way of life for Americans: Why so?

Credit card debt is a way of life for Americans: Why so?

“Credit card debt is a way of life for people in America” This statement is true.
According to the survey conducted by the CreditCards.com, 39 million credit card holders are carrying a balance from the year 2017. Well, this is the cruel gift of having credit cards. Because most of the people don’t manage their credit cards properly.

It is true that credit cards are the most convenient tools for purchasing items. People are using their credit cards to buy daily necessities. They also use credit cards to purchase things that they can’t afford in cash. Whereas, the credit cards should be used for emergency purposes or for buying an expensive item.
Though this statement is not fully justified. Because, if a person manages the credit card properly, then the card can be used for buying necessities and expensive items too.
Credit cards are convenient for buying daily goods as carrying cash can be dangerous and using a debit card is not secured.
But more important is repaying the credit card bill in full and on time, which most people don’t do and fall into credit card debt easily.

According to the survey of wallethub, the average credit card debt in America is $1.03 trillion. 6 in 10 young people in America have admitted that they make frivolous purchases with their credit cards and this would be the reason for their debt.
On the other hand, nearly 2/3 of Americans who are in debt, have said that they racked up debts to manage emergency expenses like car repairs or medical bills.

The survey also showed us some facts: “People are now more easy with their debt.”
As per the survey, 43% of people have said that credit card debt feels normal. Though, 46% of people have agreed that their credit card debt makes them feel stressed.

So, now, this is also true that for most of the people in America, credit card debt is a way of life.

Why are people getting trapped into the credit card debt?

Surprisingly, some people said that they never missed any payment, but still they are in credit card debt. They said that they know it will take years to finish paying down the debt. Why so?

Making only the minimum payments

Most of the people are making the minimum payments on their credit cards. But making only the minimum payments on your card is not enough. Because minimum payments make just a dent in the principal of the debt. You must repay the total balance with interest to the company. Carrying a balance means you will be in debt for a long time while racking up huge amount of interest.

Getting attracted to the credit card rewards

Remember, credit card rewards are marketing gimmicks. The credit card companies are trying to entice people by offering reward points or miles. But, these marketing tactics are actually forcing you to spend more (Paying 18% more to get 25% back in reward). Instead of spending more credit to get the rewards, you should concentrate on getting the reward for paying the bill in full.

How to avoid credit card debt

Here are some ways to avoid credit card debt to live a peaceful financial life.

Get a credit card with a lower interest rate

Don’t sign up for a credit card with a higher interest rate for some mere privileges like discounts, rewards, and mile. Also, some people signup for a balance transfer card. Make sure you get the card that doesn’t charge a transfer fee.
Usually, the balance transfer card offers 0% APR for the first 15-21 months (Introductory offer) with no annual fee and a low or zero balance transfer fee. Here you need to move the balance to this card to repay the debts easily. However, you should try to repay the balance within the offer period. Otherwise, the interest rate will be added up and you may end up paying even more.

Avoid using credit cards randomly

It is true that credit cards are safe as you can move cashless. But it is also true that it doesn’t let you feel that you are running out of affordability. Remember, you shouldn’t use a credit card to buy whatever you want. Because credit cards are not free money. Use a credit card to buy things when you are sure about your affordability. In short, don’t buy things with a card that you can’t afford with cash.

Build an emergency fund

Some emergencies can force you to use credit cards. In most cases, people don’t repay the bill in full and fall into the debt cycle. Thus, you have to build an emergency fund to avoid using credit cards all of a sudden. Try to build 3-9 months worth of savings in an emergency fund to manage emergencies like sudden illness, accident, job loss, and natural calamity.

Lastly, though it is true that accumulating credit card debt is becoming our habit. But you can still stay away from this debt by living life with less. If you practice frugal living, you can easily avoid the enticing living style that most of the people are living now.

How to become a smart shopper and avoid online shopping risks

It is easy to compare prices, save enough time, and also avoid the rush while shopping, as we have the internet at our fingertips. But online shopping is also a prime risk zone where people might become a victim of identity theft.

Recent studies show that nearly 51% of purchases are made online, and the number is still growing. This increase in online shopping has also made it easy for cybercriminals to harm common shoppers. Consumers are becoming victims just because more people are using the internet without knowing the potential risk and how to avoid such a threat.

So, before plunging into the internet, you must be aware of the do’s and don’ts of online shopping. This way you may protect your personal information and reduce the risk of an online scam or identity theft.

Dos:

Compare prices and discounts –

Most of the online shopping sites offer great discounts throughout the year, but you must make sure you are getting the best discount available for your product. You must compare similar products with the value of their offered discounts, prices, and delivery charges. Choose the best item with the maximum discount available, and make sure you apply the right coupon code for the product.

Check out reviews –

No matter what happens on the internet, no matter how much discount you are getting, always shop after checking out the reviews given by previous shoppers. You can use your PC or smartphone to check reviews at any point in time. It’s better to buy products that have mostly positive reviews.

Prepare a list –

Make a quick list of the products you need primarily. Make sure you prepare the list considering the best brands, best prices, maximum discounts, and quality of the products. Now you can arrange the order of buying based on requirement or price. If you find out some items in your list are on sale, you may buy them first.

Create a budget –

Buying items on discount through online shopping can’t help you save money. You should set a budget for every item you want to buy. Set up the budget based on what you can afford and for how long you’ll be using the item.

Read the fine print on every item –

Most online shopping sites monitor their visitors and offer discounts on the basis of their age, spending pattern, choice of products, selected brands, and other important factors. While buying some item, make sure to go through the terms and conditions a.k.a fine prints associated with the product. It is possible that a certain big discount is applicable to you only if you purchase worth a certain amount, or buy 1 get 1, or on certain brands only. You might also need to check the guarantee and return policy of that product.

Use cash while making payments –

You’ll spend less when you purchase items with cash. Use cash while buying products from the store; you might get a good cash discount. Of course, it is easier to pay using a credit or debit card when you shop online. It that case, make sure you are paying back the card within 3 to 4 days after buying such products.

Verify the website’s security –

You must keep yourself away from the online shopping risks as much as possible. For that reason always shop from the website that is secured. How do you locate a secure website? Find websites with “https” in the URL, or look for a tiny padlock icon in your browser before you confirm the site as an authentic, secured website.

Keep tracking your statements –

Track your bank statements every month. If you ever notice a discrepancy, you may demand an explanation from the retailer. For example, if your credit card company overcharged you the interest on your credit card, you call the retailer and ask them to correct the error.

Don’ts:

Avoid impulse buying –

It’s wise to avoid impulse buying as much as possible. If it’s not on your list, make sure you don’t add it for the time being. Online shops may give you lucrative discounts on items you don’t need right now. But, you should avoid buying those stuff you didn’t plan to purchase. This way, you can tame your overspending habit and save a decent amount from your monthly budget.

Stop using cards –

Using a credit or debit card for online shopping can trigger the chances of online fraud and identity theft. Once you provide your card details into the online shopping site money transfer portal, there’s a chance that hackers may hack your login and fetch your personal data from there. So, to increase your online shopping security, make sure you do not save your card details on that website just to make “one-click easy” payments.

Do not purchase food items online –

It is quite difficult to visit the grocery store, again and again, only to buy fruits and veggies. But presently, many websites deliver the purest form of food products, especially organic food or health products at cheap rates.

But do not buy food or health products online. Fresh food items and health products should be purchased directly from stores to ensure authenticity. Moreover, health products should be bought from popular stores since there are many websites online where fake products are being sold.

Avoid social networking sites deals –

Do not trust such deals. Most of the URLs appearing in social ads are customized and will redirect you to social media sites. It means you might get redirected to a fraudulent website. You can view those deals as the reference but go directly to the retailer’s website for more details.

Avoid taking your friends with you –

It’s quite amazing to go shopping as a group, or with friends. But trust me…it’s also dangerous.
If you need to shop smartly, it is wise to go alone. This way you’ll get most of the good deals left only for you; with friends you might not get all the offers and discounts alone.
Also, people spend more than usual when they are accompanied by friends. They may engage in impulse buying most of the time when they are with friends. As a result, they fall into debt trap.

Don’t use wire money to pay for any product –

After buying a product from an online auction site, such as eBay, the seller might ask you to wire your payment. That is a mistake, don’t do it. Wiring money may push you into a fraud situation. You can’t get your money back if the item you ordered never arrives. Pay with a credit card so you can dispute the charges if you don’t receive your item.

Don’t forget to inspect your new product –

Notify your seller as soon as you get your package delivered. Check your product properly and call the seller if you have any issues. The seller may pick up your package and if the issue is genuine, you’ll get the replacement or the money will be refunded.

Don’t shop using public computers –

Online shopping will require your personal financial data, like credit card number, name, address, pin code, etc. So, if you are using a public network computer, like the one at a coffee shop or bookstore, stop it right now to avoid online shopping risk.

Hackers may access your private data by accessing your account through the public network. Those networks are pretty vulnerable to hackers and they can easily sneak in. Shared computer networks can be bugged with spyware or other malicious viruses. These viruses can harm your computer and report your credit card information to hackers. If you really need to use a public computer or network, try scanning it first with an antivirus, internet security software like Kaspersky, Bitdefender, Norton, Mcafee, or any other software. These softwares can even increase your online shopping security to the next level if you use them at home, in your personal PC, laptop, or phone.

Do’s and don’ts of online shopping can be controversial. So, without thinking much, just follow your instincts. When you create your list, try to follow the order and don’t buy anything that’s not there. If you are getting a better offer for your product, check them out. But whatever you do, keep patience.

Posted in how
All-you-need-to-know-about-debt-settlement

Debt settlement: Everything you need to know about it

Most of the people in our country are struggling to pay off their debts. The huge debt burden forces them to file bankruptcy to get rid of their debts. However, there is another option that can help debt-ridden people to get out of their debts.
If you realize that you are unable to repay all your debts, then you can settle your debts. Debt settlement comes across as an advisable option to get you out of debts instead of filing bankruptcy.
Though you can approach the debt settlement companies to settle your debt, you can settle debts on our own.
In this article, you will understand everything about debt settlement.

What is debt settlement? How does it work?

Debt settlement is a process where the debtor negotiates with the creditors to reduce the total debt amount. The debt settlement process can be done by the debtors or with the assistance of a debt settlement company.
In a debt settlement process, you should negotiate with your creditors to reduce the debts.
Debt settlement works well only when a debtor has been delinquent on payments. Unless a valid reason is stated to reduce the amount of debt, the creditor is not going to accept any amount less than what is originally owed.

Can you consider debt settlement to settle both secured and unsecured debts?

You can only settle unsecured debts like credit card debts, medical bills, store credit card, deficiency balances, and utility bills. You can’t settle secured debts like home loan, and car loan. However, you can settle private student loans because these loans are nothing but personal loans.

Can you settle the debt on your own?

Though you can settle the debt on your own, the task of negotiation with the creditors can be difficult. Thus, you can consider debt settlement service to settle debt.
To settle your debt, you need to enroll in a debt settlement program. Debt settlement program is also known as debt negotiation program. So, once you enroll in a debt negotiation program, the debt settlement process starts. The debt negotiator in the debt settlement company performs the task of debt settlement negotiation with your creditors to reduce what you owe.

What happens in a settlement program

If debt settlement seems to be the right option for you, then you need to enroll with a debt settlement company to settle your debts. Choose a debt settlement company who will help with debt settlement. The challenge is to reduce the outstanding balance you owe to the creditors. Thus, you should enroll in a best debt settlement program so that you can find the best negotiator who will negotiate on your behalf with the creditors. In a good debt settlement company, the debt negotiators are well trained to negotiate with the creditors. They have a better idea on the situation. Because of their expertise, you can expect to get better debt settlement service. Your creditors can agree to settle your debt and you can get out of the debt by paying a reduced amount.

Debt settlement pros and cons

Though debt settlement is one of the best ways to get rid of the debt, it has some pitfalls. Before you enroll in a debt settlement program, you should know the pros and cons of considering the debt settlement option.

Pros of debt settlement

  • You need to pay less than you originally owe to the creditors

    If there is a successful negotiation between the debt settlement company and the creditor, then you are required to pay much less than what is initially owed on the account. Debt settlement process excels in lowering the total amount you originally owe as compared to a debt consolidation program or debt management plan.

  • You can save money

    If you enroll in the best debt settlement program, then you can save money through the debt settlement assistance. The debt negotiator will help you to save money by reducing the total debt amount through a debt negotiation program. Most of the times, the debtor can save less than 50% of the original debt, which can end up saving a lot of money.

  • You can settle your debt fast

    A good debt settlement company can help you get the best debt settlement assistance. Thus, you can settle your debt in a much lesser time than some other debt relief options.
    Debt negotiation eases the burden of debt by creating a concrete plan of action which is achievable for the common person.

  • You can repay debt more hassle-free

    Debt settlement plan allows you to save money in a trust account. The settlement company will disburse the amount among the creditors when you have saved the required amount in the account. So, by enrolling in a debt settlement process, you can get rid of your debts hassle-free.

Cons of debt settlement

  • You need to pay tax

    You may face tax obligations if you decide to settle your debt. Since, you are not paying the full debt, so you are saving money. Thus, you are entitled to pay tax on the total amount that you have saved through the debt settlement process.

  • You need to pay a fee

    Besides the fees paid to the settlement company for paying the creditors, you need to pay a fee to the settlement company for opting the debt settlement service. However, there is no upfront fee.

  • Debt settlement can hurt your credit score

    Debt settlement process may have a negative impact on your credit score. If you are unable to repay the debts in full, then it can have negative implications on your credit score. After you settle your debts, your credit report will be updated as “Pay as settled”. Thus it will pull down your credit score. However, you can negotiate with the creditor to remove it.

Tips to follow when you settle your debt

  • Be clear in your debt settlement negotiation

    If you are facing financial hardship and, due to that you are unable to repay your debts, then the creditors might be interested to negotiate with you. Instead of giving all the details about why you cannot pay the dues, come up with a few sentences that you can consistently use to talk to the creditors. Above all, be honest. Don’t tell everyone a different story, which may backfire.

  • Talk politely with the creditors

    Keep calm while talking to the creditors regarding debt settlement. You will worsen the situation if you lose your temper. Simply describe your financial hardship to convince them for the debt settlement. Be in your best behavior while communicating with the collector. Your attitude can make a difference.

  • Know what you can afford to pay

    Before considering debt settlement, figure out the amount that you can afford and pay. However, if you enroll in a debt settlement process, they will assess your income and tell you how much you can pay in debt settlement.

    Lastly, debt settlement has its advantages as well as disadvantages. But if you are drowning in debt, then debt settlement can be the best choice since you can repay debts by paying a lower amount. Yes, debt settlement process can hurt your credit score, but you can rebuild your credit score with time. You need to add positive information to your credit report. For example, making monthly payments on time, staying within the credit limit and paying the credit card bill in full and within time. So, instead of not repaying the debt at all, you should pay the debt that you can afford. If you totally ignore your debts, then the creditors will sell your debt to the debt collection agency to collect it. If the collectors win the judgment against you, then you can be sued for the unpaid debts. So, you should settle your debts before they are sold to the debt collectors.

How will bankruptcy treat your debts and make you debt free?

How will bankruptcy treat your debts and make you debt free?

Bankruptcy deals with debts in a way, no other debt relief option does. By debt relief, we mean a process that helps to pay off debts.
That could be anything out of, Debt Consolidation, Debt Settlement, Credit Card Balance Transfer, or for instance, Bankruptcy.

In this blog post, we will be revisiting Bankruptcy. We felt people want to know Bankruptcy in an easier approach!
And, we aim to satisfy you with quality content and clear water information.
Bankruptcy gives you shelter from the cold threats and hot actions of creditors and collectors.
It forgives most of your debts, at times all! And, it gives you a new meaning to your life, if taken positively.
Many famous people have filed bankruptcy in the history of our nation.
Examples are big music bands, important political figures, Hollywood stars, and many more! Will Smith did it,

Abraham Lincoln did it,
Marvin Gaye went through it…… even did Mike Tyson.

In most of the cases, bankruptcy seems to work out in unexpected ways. It is noticed that people start to change after filing bankruptcy! Their financial habits change, their lifestyles change, and most astonishingly their social health changes.

Here, we will cover 3 important aspects of Bankruptcy:

  1. How Bankruptcy treats your debts. A breakdown of Chapter 7 and 13.
  2. Impact of Bankruptcy on your life, and a new beginning.
  3. How Bankruptcy affects your social health.

P.S: We will only deal with consumer finance, and center our discussion on Chapter 7 bankruptcy and Chapter 13 bankruptcy.
Chapter 11 and Chapter 12 bankruptcy are mainly used by corporations and family farmers respectively.

The 2 different chapters of bankruptcy and their own individualistic treatment of debts!

The biggest fear people have when they think of bankruptcy is that they are going to lose everything to the court and creditors in the process.
By everything we definitely mean money, house, cars, personal properties and any other asset the filer has.
But, it’s actually not so!
Bankruptcy has been introduced into the law system to make us realize of our financial mistakes and help us lead a better life afterward!

Here’s what Chapter 7 does:

Firstly, this specific debt relief option, i.e a chapter 7 bankruptcy, is very aggressive and straight forward.
Its aim is to clear your debt mess once and for all. And, if you are filing this chapter, then you need to know that it has the power to liquidate all your assets and sell them off to compensate for your debts.
Chapter 7 has got the reputation of liquidation bankruptcy. But, you can still keep some of your assets as a part of the exemption.
Usually, you get to keep some of the equities on your assets depending on the exemption limit set by either the State or the Federal Government.
Some states might allow you to choose between either Federal Exemptions or State Exemptions, while others will only let you take the State Exemptions.

If you get the choice, then choose the one that lets you exempt or keep most of your properties!

It’s not quite possible to read out all the exemptions out here. For state exemptions read the Nolo’s article, and for Federal exemptions read the Bankrate’s article. They have explained it better and we believe no further explanation is needed.
Chapter 7 bankruptcy wipes out your debts by nearly forgiving most of the unsecured debts, but child support and alimony are exceptions!
On the other hand, tax debts are highly ‘misbehaved’ and they might hold on to your back, even after filing bankruptcy. They are not easily discharged!
Plus, if IRS has imposed any form of tax lien on any asset before the bankruptcy filing, then you might also not be able to sell off that asset in bankruptcy!
Also, Student loans are the toughest form of debt to be discharged in bankruptcy. You will have to show the court that making payments for the student loan will become an excessive financial burden or hardship.
And, that’s what Chapter 7 is talking about.

Now,

Here’s what Chapter 13 does:

Beautifully crafted, it’s easier to qualify for Chapter 13 than for Chapter 7.
Chapter 13 is also called reorganization bankruptcy, one that gives you time to manage debts over a spread out payment plan!
But, unlike Chapter 7 we won’t be selling off or liquidating assets, as we don’t need to! A debt repayment plan will be laid down and you will be paying off debts in a longer duration with systematic payments.
In Chapter 13 (also in Chapter 7… remembered to mention), an automatic stay will be imposed on you that will bar all creditors and collectors from making any attempt to collect debts from you.
But, secured debts might behave in some other way, and a secured debtor can file a motion of relief to lift your automatic stay!

Any other creditor can also do the same thing but the norms for filing such a motion is not easy to meet!
Discuss with an advocate about automatic stay and motion of relief, to understand the concepts in more detail.

Chapter 13 Bankruptcy, however, may or may not forgive your debts, which depends on their level of priority. But you can expect to see some of your low priority unsecured debts getting forgiven if you can show some type of hardship in making their payments!
Either way, both in Chapter 7 and Chapter 13, the secured debts have no chance of forgiving!
In fact, if you can’t carry on with payments according to the repayment plan, given in chapter 13, then there will be chances of foreclosure!
But, here’s one tip: Always try to file a no-asset bankruptcy (do your own research), if going for Chapter 7!!! In Chapter 13 however, try to carry on with your secured debt payments as per the repayment plan, to keep your property.
But, whatever it is, you can only keep your property if you can make the payments. Be it even bankruptcy.

Effect of ‘Bankruptcy’ on your ‘Social Health And Life’, and how you should respond to the new call:

If you are planning to file bankruptcy, then you must take it seriously, for it’s about to get a serious grip on you.
Bankruptcy is not just a financial term, that’s only expressed in numbers and dollars. It’s a deep event, that has a deep impact on your life.
Bankruptcy will change your life. It’s like a new beginning that will help you to realize about things, that you never quite understood before. It’s the depression I am speaking mate. It’s the ‘Significant Low’ that comes after the fuming ‘High Life’, you have led.
One wise person told me, to have fun, till the limit I wanted to! And then, when I would realize the mistakes, I should not repeat them. You can keep on doing mistakes till you yourself realize them.
And, bankruptcy exactly does that. It makes you realize your financial mistakes, it makes you understand your status, it makes you understand your ground, and most importantly it teaches you some big lessons.
Try to take the Bankruptcy Depression positively.

But, things might not be that easy either.

Bankruptcy affects your social health! People around you will start to behave and act differently. And, you will definitely notice them, for those changes will be highly noticeable.
Bankruptcy might promise you a new life, financially.
It will get rid of your debts and will make you debt free.
But, it does not guarantee you a happy social life.
However, you can always make things go your way if you are ready to accept changes and can be positive!
There are so many people who were actually benefited from bankruptcy. Slowly and steadily they tried out new sources of income. Got more money coming in. Started to practice new money habits. Planned on investments and made nice wealth overtime.
You can also do the same.
There’s absolutely no reason to withdraw yourself from social activities if your own people start to isolate you.
Time will give your options. There’s nothing to be shy, ashamed, or guilty conscious, just because you went bankrupt. It is for the help and benefit of the general people, do our law has bankruptcy in it.
It’s good that you have realized, and are ready to rectify your money habits.
It’s a good sign!
It means you are human, and therefore comprehending ethics!

Even if you feel, that you want to avoid bankruptcy, then I would say, you should choose debt consolidation or debt settlement.

They are far easier to go with, with no social health injury attached!
For more details on your case, please talk to a nearby advocate, or join online forums to discuss with other people, who are going through the same problems.
Some good online finance forum discussions can be found on:
Reddit.com
FICO Forum
Bankruptcy Forum
Debt Consolidation Care Forum
Also, you can start a discussion On Stack Exchange or Quora!

Posted in how

How much is it helpful to refinance student loans after marriage?

When you get married, many separate things tend to become one. Being a married couple you may have to experience a lot of new changes in your daily lifestyle. You might also have to make various financial decisions, like combining both of your finances by opening a joint account.

The same can happen with your student loan debt. When you are a bachelor, your student loans have a different impact on each of your credit scores, as both of your papers are separate as well as credit reports.

But once you are married, one of your debts may harm the other’s credit score. Couples can handle their love life and debt separately with their own earning. Some couples opt for a new method; they choose to consolidate their student loans through a student loan refinance option.

If both of you have student loans separately, then you may try to consolidate your student loans under any one of your names. You might be interested in consolidating your debt together so that it’ll be easier to share repayment responsibilities and get out of debt soon.

Can you consolidate student loans with a spouse?

After graduating from the college, you might have multiple student loans on your shoulder, and possibly your spouse have it too. It may become difficult to manage both of your student loan debt with multiple lenders, monthly student loan payment, and track several due dates.

The stress due to this type of debt can take a toll on your mental health. And gradually, it may affect your libido. Approximately one-third of borrowers stated to have experienced a decrease in their sex drive due to student loan debt stress.

Refinancing student loans after marriage can combine both of your existing student loans into a single larger loan. Many times, student loan borrowers might have multiple other loans, so through consolidation, it can be easier to handle them. However, if you have taken out the loan under a Federal Student Loan program, you cannot consolidate the loan with a private student loan under the same name.

So, how do you consolidate both of your student loans? You need to find a private refinancing company and approach to them. These private refinancing companies may allow student loan consolidation with a spouse, but you must remember that you’ll lose all the benefits of federal student loan. These benefits may include access to income-based repayment programs, eligibility for deferment and forbearance, and eligibility for student loan forgiveness.

Both federal and private student loans are eligible for refinancing through a private lender. But before refinancing both of your student loans together, you must ask a few questions to yourself:

  • Which loans should you tackle first?
  • What money investment can you put on hold?
  • How will you make monthly payments?
  • Can your tax status affect the income-based repayment plan?
  • Who’s going to handle the payments?
  • What do you expect from the student loan refinancing?
  • Do the refinancing fit in with your other financial goals?

Find out all the answers first. Then have a look at these pros and cons and decide if refinancing your student loans with a private company will work best for you.

Pros and cons of consolidating both of your student loans after marriage

a) Pros of consolidating student loans with a spouse

Refinancing student loans after marriage can sound appealing. So, if you want to consolidate your student loan with your partner, it will make a lot of sense. Here are some unique advantages of it:

1. You can manage the total debt with one easy payment

If you and your spouse have multiple student loans, it might become a headache to keep track of those due dates and multiple payments, every month. While handling so many accounts, it’s quite easy to make mistakes and forget payments. This may hurt your credit score and even cause you heavy late fees.

While opting for spousal loan refinancing, you may consolidate your multiple student loans into one. After doing so, you’ll have one due date to remember and one easy monthly payment to make.

2. You might save thousands from your wallet

When you and your spouse want to combine your loans and apply for a refinance, the lender might check both of your income and credit reports. So, both of your credit score and credit history will be evaluated while determining the new refinance loan terms. If one of your records are good, and your income and creditworthiness have a decent level, you might be eligible for a lower interest rate.
If both of you can qualify for a lower interest rate, you can easily manage to save a decent amount over the total loan period.

3. You could get a long term with a lower monthly payment

When you take out the refinancing loan to consolidate both of your student loans, you can choose a repayment term that suits you the best. If you have a shortage of money or having a financial hardship, you can opt for a longer repayment term. So, it’ll reduce your monthly payment to a significant level.
It is right that if you go for this method, you’ll pay more in interest over the length of the loan. But, on the contrary, you have a breathing space every month from paying a good amount that may harm your budget.

b) Cons of consolidating student loans with a spouse

While consolidating your student loans with a spouse comes with good benefits, there are some potential drawbacks also that you should consider before making the final decision.

1. You have to give up all the federal benefits and protections

You need to work with a private lender and refinance your student loans if you want to consolidate your loans together. If you have federal student loans (loans from the Department of Education) along with private student loans, you have to refinance the loans through a private lender. But don’t forget you have to let go all special federal benefits and protections when you refinance. These may include:

  • Income-driven repayment (IDR) options:
    It may be available based on your income and loan balance. With an IDR plan, your loan payments will be set at a percentage of your current income. If you refinance through a private lender, you’ll lose access to IDR plans altogether.
  • Loan forgiveness:
    If you refinance your student loans through a private lender, you’ll lose the privilege to opt for the Public Service Loan Forgiveness program.
  • Loan discharge:
    With federal loans, you may opt for a special option where your student loans could be discharged. For example, if you or your spouse become disabled due to any reason, you may apply for Total and Permanent Disability Discharge. But if you refinance, you’re no longer eligible for the loan discharge option.

2. You might have to carry your spouse’s debt even after a divorce

Unfortunately, if your marriage ends up in divorce, you still have to make payments on the refinance loan every month, considering the loan is taken out by both of you.
Any debt that is taken out before your marriage is solely yours. After the marriage, your spouse isn’t responsible for the student loans you borrowed while in college. If you divorce, the debt remains in your name.
If you consolidate your student loans with your spouse and refinance the loans in both of your names, both of you are equally responsible for paying off the debt. Even after a divorce, if one of the partners doesn’t keep up with the loan payments, the other one is still responsible for making them. If the 2nd person is you, it may affect your budget drastically.
So, you need to keep these cons in mind and make your final decision regarding student loan refinancing after marriage. But if you consider overall benefits and drawbacks, spousal loan refinancing can be a wise solution to help you manage your student loan debt.
So, do your homework and understand all the pros and cons of consolidating student loans together, and make the right choice for your family.