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Understand Student Loans Before Securing A Loan

Understand Student Loans Before Securing A Loan

In the effort to make themselves more
marketable as future members of the American workforce, thousands of men and
women enroll at colleges and universities every year. Indeed, the price of
being competitive job hunters is a steep one, costing these young adults
thousands in the process.

 

To finance their education, most of these
attendees will be securing a student loan, along with
Federal aid, scholarships earned, part-time jobs, help
from parents, and other avenues of revenue. Everything may work out positively
for these individuals as far as passing courses and ultimately earning a
degree. However, when it comes time to leave college and repay one’s student
loans, the real world may hit the young debtor in full force.

 

A significant percentage of filings for
bankruptcy in recent years have come from college-age men and women, and
student loan bankruptcy is the prime culprit. To the chagrin of some
insolvent parties who fit this description, this may mean a short-lived bout of
independence before financial circumstances cause them to return home
to
live
with their parents.

 

In consideration of the high occurrence of
bankruptcy declarations among twenty- and thirty-somethings in today’s America,
the following are notes on the possible intersections of student loans and
bankruptcy:

         

In looking at statistics and trends on the
affordability of going to two- and four-year schools, it may not seem to some
as if student loan bankruptcy should be as much of a concern in the United
States as it is. A majority of four-year students attend a college or
university for less than $10,000 per year. Still, it is not a small minority
that pays more than this sum annually, and in any event, these prices being
paid four times over do add up, not to mention the rising costs of education
commensurate with higher prices of other “products” and services as
time goes on.

 

Even more importantly, though, in the long
term, student loan repayment plans, as is the case with any normal loan, will
accrue interest to be paid on top of the principal. These can ultimately
ratchet up the price of one’s education to a large degree. Institutions of
higher loans do nominally warn students upon exiting about the dangers
of student loans and bankruptcy, but often very informally through an
online quiz that essentially is an open-book test and one in which wrong
answers can be amended by repeating the answer and quickly moving on. This is
not to imply that all people who petition for student loan bankruptcy are
misinformed about how their loan works
. Nonetheless, this information is worth consideration for
all student debtors.

         

Noting how hard times have befallen the
American economy, student loans and bankruptcy collectively may be heavily
associated with the nation’s uncertain employment market. Graduates looking for
their first “real” job or seeking to start their career straight out
of college may find that things are not exactly going
according
to plan, as there is not an abundance of new
jobs to be had. Moreover, even when young men and women have been working for
some years and steadily repaying their loans, the need for companies across the
country to downsize has forced Americans in the millions out of work and onto
the unemployment line. Without the means to offset their debts from school,
some young people may feel they have no recourse but to file student loan
bankruptcy to manage their finances. 

         

With all of this talk of student loans and
bankruptcy, people who have yet to file under Title 11 but are contemplating
this maneuver are advised to take caution. In personal bankruptcy cases, while
most types of debts are capable of being discharged, some financial
obligations
must remain intact.

Read this Before Filing Bankruptcy In Natural Disaster Emergency

Read this Before Filing Bankruptcy In Natural Disaster Emergency

Debtors should not plan for bankruptcy. By this, it is neither implied that individuals who cannot make payments on credit installments and loans should fail to consider it as an option, nor suggested that they go into the bankruptcy filing process blindly. At the very least, there are prerequisites to declaring bankruptcy, notably the mandatory credit counseling.          
One would expect to see a sharp rise in bankruptcy filings after a natural disaster, such as an earthquake or cyclone. Such was the case with the aftermath of Hurricane Katrina, which saw widespread disintegration of the levees safeguarding the City of New Orleans, and by extension, much of the property within.
It is no stretch to say that many residents’ homes and their very livelihoods were destroyed by the storm, and for people that could not afford insurance (which likely would only cover a portion of the total damage), it indeed put them in dire straits. It is thus no wonder that so many people with such perilous financial situations would first to look to bankruptcy, planning to file as soon as they got the chance.
Expectedly, there are mitigating circumstances at work here. For one, the events surrounding Hurricane Katrina transpired around the same time that an overall spike was plotted for Americans in declaring bankruptcy, out of nervous fear of the changes the BAPCPA would effect (among them, the use of the means test as a basis for Chapter 7 eligibility and an increase in the cost of bankruptcy for mandatory counseling). 
On the other hand, seeing as insurance and basic first-order needs were difficult for New Orleanians to satisfy at the time, the preexisting cost of bankruptcy was such that, ironically enough, some were too broke to file for bankruptcy. In light of this, bankruptcy filings could have been yet more numerous.
Still, even with all of the calamity that people may face as described above, they are still advised to think long and hard about filing for bankruptcy. Of course, immediate considerations like the cost of bankruptcy do come into play, as well as the long-term considerations of how long filing for bankruptcy may stay on one’s credit history.
As for concrete solutions to financial woes, meanwhile, people may look to swallowing their pride and accepting public assistance amidst bankruptcy planning. In addition, while it is not usually preferred that people try to get out of their debts, in light of extraordinary conditions and severe monetary deficits, some might actually go the “do nothing” route.

Read This When Bankruptcy and Divorce Coincide

Read This When Bankruptcy and Divorce Coincide

In theory, marriage is a blessed sacrament and sacred institution in the majority of cultures. In practice, however, a marriage is by no means an easy thing to maintain.
Opponents of marriage are quick to cite the popular statistic that about half of all marriages in the United States end in divorce, which reflects not so much Americans’ lack of commitment to the act of marriage as it does the true test of a couple’s faith and love that matrimony entails, as well as shifting attitudes toward the function of marriage in modern society.
Divorce (which actually may be prompted by money problems) often comes with a swirling of disparate emotions attached, and troubling financial matters only serve to further complicate things. Indeed, bankruptcy and divorce are two concepts that are hard to reconcile with one another, except for the fact that some people tend to file for bankruptcy after divorce.
The following are considerations of what may happen when bankruptcy and divorce coincide and what to do accordingly:
Certainly, nothing prohibits people from splitting up after a formal declaration of bankruptcy. Of course, before going this route, spouses should assess their commitment to such an enterprise and what exactly their priorities are at this point. For some people, the emotional and psychological components of marital strife may make a divorce worth the trouble. Others, meanwhile, may be forced to be more pragmatic in their mindset.
Putting a spin on the “stay together for the kids” trope, two people may neither seek bankruptcy after divorce nor before divorce, opting to stay together for the sake of fiscal stability. Besides, bankruptcy and divorce are both costly processes, and if the former precedes the latter, there may not even be enough money to go around for the both of them.
Therefore, given all of the above, it is more likely to see bankruptcy after divorce, and for reasons that are not hard to glean. In past decades, bankruptcy and divorce sometimes went hand-in-hand, but for another reason. People would file bankruptcy after divorce in an effort to avoid having to pay their ex a divorce settlement, alimony or other monies awarded by a civil court. Essentially, they would be hiding from their one-time spouse behind the shield that is the provision of automatic stay.

Learn About Mortgage Payments

Learn About Mortgage Payments

With buying or leasing a car, one is committing oneself to a major investment. Consequently, if an individual is not prepared to be a responsible debtor-borrower, he or she may find himself/herself in arrears rather quickly. This threat is only magnified with a purchase or other contractual arrangement of something larger, along the lines of the popular statement “the bigger they are, the harder they fall.” Borrowing through a mortgage and bankruptcy are equally, if not more apt to coincide than as with auto loans. 
With high rates of unemployment plaguing the United States and credit hard to come by in all sectors, mortgage debt is behind a rash of foreclosures, unfinished housing projects and, yes, declarations of bankruptcy.
Thus, problems with paying on a mortgage and bankruptcy filings go hand in hand for scores of Americans. In an effort to understand how mortgage debt is so easily incurred and how it may limit the options of consumers, the following is a discussion of some general information on delinquent payments on one’s mortgage and bankruptcy:
Depending on one’s lender, severe mortgage debt could leave homeowners in a sticky situation, so to speak. Of course, borrowers should aim to try to negotiate with lenders on the terms of their home loan if they are unable to make payments as normally scheduled, especially in light of changing employment circumstances, a death in the family, or some other unexpected event. Nonetheless, some more rigid lenders, if debtors are incapable of meeting their monthly obligations even by two or three months, may attempt to start the foreclosure process and take back the property. 
In response, debtors are likely rush to stop these actions and immediately file under Chapter 13 of the Bankruptcy Code, using the provision of automatic stay as a means of halting collections, sometimes even being allowed to bypass the BAPCPA mandatory credit counseling requirement because of the situation’s urgency. Thus, there is a very clear link between trying to pay off a mortgage and bankruptcy. 
Of course, even if mortgage debt does not prompt an imminent foreclosure order, it may nonetheless be enough to force a sale of the home to another buyer-homeowner or back to the original lender, presumably a bank or other comparable financial institution. 
In turn, this home sale could be a herald of more liquidation proceedings to come, as serious debtors may face delinquent payments in other areas, such as said car loans, credit card bills, and utilities. Therefore, an individual may be out of a job and a home after not keeping up with his or her mortgage, and bankruptcy could be soon to follow. Certainly, the subjects of mortgage debt and bankruptcy are of topical relevance in the present day. 
One of the primary influential factors in the ongoing credit crisis seizing the nation was a widespread failure of people to uphold their end of the bargain, so to speak, on mortgages. The “subprime mortgage crisis” is by no means simple to explain or comprehend. At the risk of oversimplifying the problem, though, mortgages were issued fairly freely prior to the events of the past five years, but with a decline in the market value of homes (a burst in the housing bubble, if you will) and tighter interest rates, a lot of these loans were defaulted on.
The subsequent inability of people to refinance on their mortgage and bankruptcy filings numbers quickly grew, and banks, employers, producers of consumer goods, and everyday Americans have been feeling the proverbial pinch ever since.  

Quick Tips on Using Credit Cards

Quick Tips on Using Credit Cards

When used responsibly, of course, credit cards are a positive symbol of one’s commitment to good credit. In fact, following a declaration of bankruptcy, credit cards can be a way of building up one’s credit fairly quickly through evidence of timely, consistent monthly payments, though some cards will, imaginably, be hard to get immediately following the act of filing.
However, though credit cards may be a fast way to build up a good credit track record, just the same, they may send a person into debt even faster, and may be one of the reasons someone files for bankruptcy in the first place. In short, credit card debt and bankruptcy, in the hands of the unsafe spender, are tailor-made for one another. 
Numerous organizations, knowing this phenomenon full well, will offer programs about how to avoid “credit card bankruptcy,” and in some cases, will even extend the offer of a new card to the consumer. Keeping with the theme, though, the following are some notes on the relationship between credit card debt and bankruptcy, and how the two may be avoided: 
In terms of general tips in the use of credit cards, the most common piece of advice in avoiding credit card bankruptcy is to keep a mind on one’s charges every month, and for every credit card used at that. Unlike a debit card, with which a person deducts money from a bank account with a fixed total amount in the reserve, a credit card allows people to charge essentially as much as they want until they hit their credit limit on that card, also known as “maxing out”. 
Especially when multiple credit cards are used in conjunction this way, credit card debt and bankruptcy are almost sure to follow. Concordantly, individuals who have troubles with credit card bankruptcy because of the above reasons are advised to limit their use of credit cards. In some desperate cases, holders may be urged to do away with credit cards altogether, as they are too much of a temptation otherwise. 
For others who are committed to having credit cards and being careful with them, it is suggested they carry, at most, three cards, and in the early going, perhaps just one in the form of an easy-to-secure card like a department store credit card.
As it stands to reason, not only must a person create and maintain a budget for their spending as well as to simplify the state of their credit ownership, but they must be cautious enough to pay on time. One of the direct influences on credit card debt and bankruptcy, and one that likewise may go unconsidered by inexperienced credit card holders is the idea that creditors will exact “late fees” in the event monthly payments are not met. 
To be sure, specific late fees differ from lender to lender, but an added charge of $30 or more to the consumer is not unheard of. A one-time dip into the realm of delinquent payments is unlikely to land a person in credit card bankruptcy, but if these sums consistently add up, debts easily stand to get out of control.
Another unfortunate aspect of credit cards, from the consumer’s standpoint, and another reason using them is a slippery slope to credit card bankruptcy is that interest rates tend to be rather high on credit cards as opposed to other forms of credit. 
Often, as a risk of securing credit cards that are not difficult to obtain, high annual percentage rates (APRs) will be placed on one’s credit balance, and when monthly payments are missed multiple times or even just once, these rates can skyrocket. A key measure in preventing credit card debt and bankruptcy, therefore, is to educate oneself about the nature of interest as well as to scrutinize a lender’s terms when filling out a credit card application.    

How Medical Costs Can Lead to Bankruptcy

How Medical Costs Can Lead to Bankruptcy

Wholesale analysis of causes of bankruptcy can often be difficult because individual circumstances may vary so greatly from person to person. Nonetheless, there are certain hallmarks of personal bankruptcy filing which make sense considering the expenses attached.
Especially with the economy reeling as it has been of late and people filing for bankruptcy in large amounts, researchers and analysts have put a considerable amount of energy into assessing the strongest roots of bankruptcy in this country.
Through their work, numerous recent reports have come back with the perhaps surprising result: bankruptcy due to medical costs and conditions, or “medical bankruptcy,” is the top reason for Americans to file for bankruptcy in this day and age. Many would suggest people are filing for bankruptcy due to medical bills, and in fairness, they are right to a certain extent. However, to suggest that they are filing for bankruptcy due to medical bills alone is a gross oversimplification. Indeed, there are multiple factors at work behind the high rates of bankruptcy petitions.          
As suggested, the breadth of medical bankruptcy is what really makes the gravity of this situation jump out at a person. According to one 2009 study published in the American Journal of Medicine, over 60% of applicant parties filed for bankruptcy due to medical bills. The accuracy and merits of this report are vociferously debated today, though. One of the biggest criticisms of the “medical bankruptcy” definition affected by this review is that it is too liberal with its inclusion of people who petitioned for bankruptcy due to medical bills in its sample population. Potentially, someone with $5,000 or more in debts due to a serious illness or injury is automatically assumed to be thrown into the medical bankruptcy category.
One of the fundamental guiding assumptions of clinical research is that correlation (i.e. association of two things) does not prove causation. Thus, while high costs of health care certainly do not help individuals’ bids for solvency, they cannot be assumed to be the primary justification for declaring bankruptcy. 
So, if we cannot so narrowly define “medical bankruptcy” as bankruptcy due to medical bills, to what confounding factors do we owe a potential complication of our conception of this bankruptcy cause? Certainly, the cost of health care in the United States today is a burden for many of its citizens. What may be more significant, though, is what is implied by these pricey medical debts based on severe medical conditions.
Aside from hospital fees and whatnot, devastating injuries and debilitating sickness prevent Americans from working regularly and maintaining a steady income. In somewhat of a worst-case scenario, the inability of a professional to perform on a day-to-day basis could cost that person his or her job and any health insurance benefits that come along with it. 
Keeping with the theme of medical coverage, the aforementioned study and its supporters express a great deal of alarm at the number of people who incurred sizable medical debts and eventually filed for medical bankruptcy despite possessing valid health insurance.
In fact, over three-quarters of those who did declare bankruptcy within the study possessed some form of plan. If anyone should be able to avoid bankruptcy due to medical bills, it would predictably be those who have medical insurance; after all, that is the very point of having coverage.
As is often the case, and was such with many of the study’s subjects, though, their insurance did not cover all issues and eventualities. With co-payments, deductibles and all else considered, subjects’ debts were essentially unavoidable.

Learn How Bankruptcy and Job Loss are Intertwined

Learn How Bankruptcy and Job Loss are Intertwined

Often enough, people will make long-term
plans for their future and their money based on their current state of affairs.
While they may not
be exactly reckless with what they have, they
nonetheless lack the foresight that would apprise them of the economic downturn
that looms ahead. Before long, one or more members of the family have lost
their job, and the whole household is claiming bankruptcy because they cannot
meet the payments on the loans and purchases they made in better times.

 

Indeed, bankruptcy and employment would
seem to be two diametrically opposed forces. In the act of a company claiming
bankruptcy, some jobs are likely to be lost in the shuffle. Bankruptcy and
employment are again put at odds with one another on a personal front

as well
. However, in this scenario, it is the former
employee claiming bankruptcy following job loss, not the other way around.

 

The following are some notes on how bankruptcy
and employment (or lack thereof) are so intimately intertwined:

         

From an ownership standpoint, the worst
outcome for a company in claiming bankruptcy is a total liquidation of all
assets. From here, it is only a short distance to realization of the strength
of the inverse relationship between bankruptcy and employment. After one loses
his or her job, the level of importance of that person’s take-home pay to
everyone’s welfare is critical to any decision moving forward.

 

In a two-income household, at least in the
short term, the spouse/partner who is employed can use his/her earnings and
benefits to support the family and prevent them from claiming bankruptcy. In
cases where both parents are let go, or only one parent worked outside the home
in the first place, this transition may be more difficult
. Adding situations like pregnancy and
widespread unemployment to the mix, the proverbial shadow of debt may be too
much for some Americans to take, prompting them to file for relief.

         

Especially with high unemployment rates persisting in the United States, bankruptcy and
employment would seem farther apart than ever before. Before claiming
bankruptcy, though, debtors should think about
how they may be able to help themselves out without
significantly hurting their credit rating
.