What Do I Need To Do After I File For Bankruptcy
You have to take a debtor education course from a government-approved organization about things like developing a budget, managing money, and using credit wisely. To find a counseling organization, check the list of approved debtor education providers. You have to file a certificate with the bankruptcy court proving that you took the course.
Other Military Consolidation Plans
There are other avenues for military members to get relief that depend on the circumstances and amount of debt you owe,
If your problem is confined to credit cards, you may be qualified to refinance credit card debt with a balance transfer card. Several banks and card companies are offering 0% interest on credit cards during an introductory period of 12-18 months. Most have a transfer fee, which ranges from 3%5%, but if you pay off your balance in the introductory time period, you still come out way ahead.
Another option is to speak with a nonprofit credit counseling agency to find out if you qualify for a debt management program. You may be able to reduce your interest rates and monthly payment in a debt management program, without taking out an additional loan.
Other choices for debt consolidation or to avoid foreclosure would include:
Harness The Value Of Your Home To Erase Your Other Debt
Another form of loan for debt consolidation is a home equity loan.
If you are a homeowner whos been faithfully making mortgage payments, youve probably built up some equity in your home.
Re-mortgage your home to pay all your debts.A home equity loan, otherwise known as a second mortgage, lets you borrow off the money youve already put into your home.
Like the unsecured personal loan, you get your home equity loan and use it to pay off all your debts.
Smaller payments at lower interest are win-win.Then you set up a repayment schedule and pay it off in monthly installments at a lower interest rate than you were paying before.
Since a home equity loan is an insured loan the interest rates will be much less than credit cards or even unsecured personal loans. A typical home equity loan APR is 4%.
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Personal Loans For Debt Consolidation
Consumer debtcredit cards, student loans, auto financing, home mortgages, and more add up to an average burden of $90,460 for the typical American shopper. As inflation rises and interest rates are expected to climb, consumer debt is redefining poverty in modern times. Luckily, there are options like personal loans to help with debt consolidation.
Were inching closer towards a break-even point that requires a six-figure salary to keep up with basic necessities and debt obligations. The problem is that six-figure salary jobs are in short supply. The smarter financial move is to get a handle on your personal debt and turn things around.
A personal loan for debt consolidation is one way to tackle the problem. Customers Bank offers a variety of financial solutions you can count on. Lets take a look at how it works.
What Is Nonprofit Debt Consolidation
Nonprofit debt consolidation is a way to reduce and make payments on time without taking out a loan. It is offered by nonprofit credit counseling agencies, like InCharge Debt Solutions, and really is just another name for debt management programs.
In some cases, credit counseling may be enough to solve your problem. Before enrolling in a program with a nonprofit debt consolidation organization, you can take advantage of a free credit counseling session. The counselor will review your finances and help you create a monthly budget. Counselors will also review the options for getting out of debt, and help you decide which is best for you based on your income, debt, and expenses.
Some of the options, including debt management and nonprofit debt settlement, dont have a credit score requirement, making them good options for people whose debt has damaged their credit.
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What Does Debt Consolidation Mean
Debt consolidation means combining some or all of your debts into one new account with a single monthly payment. It doesnât erase your debt. But if youâre able to secure a lower interest rate, it may lead to lower monthly payments. And combining debts could also simplify how many different payments you have to make each month.
Ideally, debt consolidation can help you better manage your debt and pay it off more quickly.
After I Pay Off My Debt Is There Anything I Can Do About My Credit
No credit repair company can legally remove negative information from your credit report if that information is correct so dont believe anyone that tells you otherwise.
Only time can make accurate information go away. A credit bureau can report most accurate negative information for seven years and bankruptcy information for ten years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. The seven-year reporting period starts from the date the event took place. But there are steps you can take to repair your credit over time.
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Should I Get A Personal Loan To Pay Off Debt
Falling behind on debt payments can have a damaging effect on your credit score and may ultimately result in repossession of collateral or accounts being sent to collections. If youre struggling to make payments on all of your individual debts, consider taking out a personal loan to streamline your payments and increase the repayment termthereby reducing your monthly payment.
A debt consolidation loan also may be a good option if your credit score has improved since you applied for your loans. By qualifying for a lower interest rate on a debt consolidation loan, youll be able to reduce how much you pay over the life of your loans.
The Pros And Cons Of Debt Consolidation
Considering potential advantages and disadvantages might help you decide whether debt consolidation is right for you.
Advantages of Consolidating Debt
A debt consolidation loan might be a good idea if youâre able to:
- Find a better APR or interest rate.
- Lower your monthly payments.
- Reduce how long it takes to pay down your debt.
- Use it responsibly to build your credit.
Disadvantages of Consolidating Debt
Debt consolidation isnât right for everyone. Here are a few things to keep in mind when considering whether itâs right for you:
- Debt consolidation alone will not eliminate your debt.
- There could be upfront fees or other costs that make consolidation more expensive.
- Simplifying payments may not necessarily make the payments lower each month.
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I Dont Have A Credit Profile How Do I Get Started
Your are about how you use your credit â money that’s loaned to you by a bank, a credit card or a loan.
Start small and secure. Secured credit cards or loans are accounts where you’re getting credit, but it’s tied to a cash deposit that the lender can easily collect if you don’t make your payments. This can be a great way to start building your history. If you pay your secured card on time, eventually you will be able to qualify for unsecured credit.
Another option might be to co-borrow with a person who has established credit history. It’s common for younger adults to co-borrow with their parents who have a longer credit history. Or if youâre a new American resident, you might have a relative who has lived here longer co-sign for you on a loan or credit card to help you get established.
What Debt Wont Be Erased By Filing For Personal Bankruptcy
Filing for personal bankruptcy usually wont erase child support, alimony, fines, taxes, and most student loan obligations, unless you can prove undue hardship. And, unless you have an acceptable plan to catch up on your debt under Chapter 13, bankruptcy usually doesnt let you keep property when your creditor has a lien or financial interest in it.
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Bottom Line Up Front:
- A debt consolidation loan can help you pay off several debts at once and streamline your monthly payment into one fixed amount.
- Personal loans are most often used for home renovations, unexpected expenses or emergencies.
- Loan amounts with Navy Federal range from $250 to $50,000.
Taking out a personal loan or consolidating your debt can be a helpful financial move. If you need help paying for upcoming expenses or consolidating high-interest debt, one of these options may be just what you need.
Need To Find Debt Consolidation Assistance
When your finances are spinning out of control and youre considering debt relief loans or debt consolidation, its wise to find debt consolidation assistance from a qualified professional.
Debt consolidation typically means taking out one new loan to pay off a number of other loans. This can be financially advantageous if the new loan has a lower interest rate or better payment terms than the original loans, helping you to pay off your debt more quickly or allowing you to manage payments more easily.
But debt consolidation may not be right for every financial situation, and thats why its important to find debt consolidation assistance before you take steps to consolidate loans. If youre deep in debt, you may not qualify for the lower debt consolidation rates that make this approach work. Many debt consolidation firms charge high fees and there are more than a few that are actually scams. Its not unusual for consumers attempting to consolidate loans to actually find themselves even deeper in debt a year or two later.
When you decide I need help with my debt and you want to find debt consolidation assistance that can help you determine the best path out of debt, contact American Consumer Credit Counseling . As a nonprofit organization, we provide free credit counseling and low-cost debt management services along with a wealth of educational material that can help you to manage your money more effectively.
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What Do You Make Of The Legal Challenge That Posits That State Taxes Will Negatively Impact Borrowers Whose Loans Are Forgiven
The Indiana lawyer is going to fail because hes arguing hes going to have to pay higher taxes, when he can opt out. If you dont have to get the debt forgiveness, you dont have to pay any taxes.
More importantly, theres this legal doctrine that says you cant sue on any issue if you dont have something called standing, which means theres a specific harm you are alleging. There are longstanding cases that basically say you cant sue as a taxpayer just because your taxes are going to go up. Because if that was the case, you could imagine the lawsuits against the 2017 Trump tax cuts. The argument that Im having my taxes go up flies in the face of lots of precedent.
Federal law allows this debt relief to be tax-free because of the American Rescue Plan that the president signed in March 2021. In any state that immediately conforms to federal law, there will be no taxes on this.
Major Benefits Of Debt Consolidation Loans
There are three major benefits of taking a debt consolidation loan
- Save Money on Interest
Ideally, youll utilize a financial solution with lower interest rates than those applied to your current loans. Youll be able to save more by paying less interest.
- It helps build your credit score.
- Easy track of debt repayment.
Regardless of the option you choose, youll have one bill to pay once you combine your debts. It might assist you in keeping track of your finances and establishing a realistic debt repayment strategy target.
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Does Debt Consolidation Hurt Your Credit
Consolidation loans have the potential to affect your credit score in several ways. Applying for a loan requires a hard credit check, which can result in a small dip in your credit score. However, the impact of the inquiry on your score will decrease over time and disappear typically after two years. Your credit score may also decrease if you take out a debt consolidation loan, pay off your credit cards and then rack up more debt on those cards.
That said, consolidating loans can be a great way to streamline your payments, reduce your monthly debt service and build healthy financial habits through regular, on-time payments. For that reason, consolidation loans can actually help you improve your credit score over time. Whats more, some lenders even offer credit tools beyond regular lending services to help you manage your credit profile.
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Watch Out For Predatory Lenders
If youre considering a debt consolidation loan, keep in mind that some lenders are predatory in nature. This is especially true of lenders that work with people who have low credit scores. Theyll often charge exorbitantly high interest rates and a variety of additional fees.
Online companies like OppLoans, for instance, charge triple-digit APRs. That said, its nowhere near as pricey as payday loans, which can charge APRs of up to 1251.43 percent.
Accepting a loan with such a steep interest rate can be extremely expensive and may cause you to go deeper into debt. Plus, using a predatory lender defeats the purpose of a debt consolidation loan, which is to make it easier to pay down your debt.
Sometimes its hard to spot who are predatory lenders as it relates to the consolidation loans, especially when you have bad credit, Exantus says. Anybody who offers you anything may seem like a win. The important thing is to read the fine print. Do not get into any agreement without fully understanding what that is going to cost you.
Predatory loans are those that benefit the lender at the borrowers expense, Sexton adds. The warning signs include:
- The interest for your credit rating seems too good to be true.
- The lender is pressuring you to act quickly.
- The lender is pressuring you to take out a risky or expensive loan.
- The lender is asking you to lie on your application.
- The fees or terms suddenly change at closing.
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Types Of Debt Consolidation
There are several avenues open to consolidate debt, including a debt management plan home equity loan personal loan credit card balance transfer and borrowing from a savings/retirement account.
The route you choose should be based on research and whether the solution offered fits your budget and time frame. Your credit score and debt-to-income ratio are factors, if you choose to get any kind of consolidation loan. You many also choose to pursue online debt consolidation.
Here is a quick look at each option.
How To Prepare For Diy Debt Consolidation
DIY debt consolidation is not for everyone. Consumers need reasonably good credit, a fair amount of free cash flow in their budgets, and believe it or not the right amount of debt.
Even then, the plan doesnt work for those who see paid-off credit cards as an invitation to binge-spend again. Instead, a successful debt-consolidation plan involves almost obsessive commitment to repayment.
Its time to plot your course.
- Create a list of the debts you intend to consolidate. Its probably best if it is only credit card bills, but it might include medical bills and personal loans.
- For each creditor, note the lenders name, total amount owed, interest rate, and minimum monthly payment.
- Get a copy of your from one of the big three . Each owes you one free report every 12 months.
- Know your monthly income.
- Revisit a budget that doesnt include the debt you plan to consolidate. Stick by it.
- Identify expenses you can cut out or at least trim .
- Establish how much free cash flow you have after you pay necessary expenses.
- Stop charging. No, seriously. STOP CHARGING.
- Do your homework: What debt consolidation method is best for your situation? Well explore the options below.
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Types Of Debt Consolidation Programs
There are three forms of debt consolidation programs:
The first two are aimed at consumers who have enough income to handle their debt, but need help organizing a budget and sticking to it.
The third debt settlement is used in desperate situations where the debt has reached unmanageable levels.
If youre not sure which is the best way to consolidate debt, call a nonprofit credit counseling agency like InCharge Debt Solutions. A certified counselor will go through your income and expenses, help you create an affordable monthly budget, then offer free advice on which consolidation program will eliminate your debt.
Credit Counseling will develop an action plan that is tailored to your exact needs, Rebecca Steele, Chief Executive Officer for the National Federation of Credit Counseling, said. When youre in debt, you need to understand your budget, what its going to take to resolve your debts and how you can put fair, affordable payments in place to achieve that goal. That is what credit counselors should do for you.
You Noted In A Testimony To Congress Last Year That Black Borrowers Already Pay More Taxes Than Their White Counterparts How Might A One
Every April 15, Black Americans are paying more than their White counterparts are. So this is just another example of a policy I would argue was designed to help Black borrowers and on the federal level does help Black borrowers, because theyre not paying any extra taxes. Its the states that often have regressive tax schemes that would be hitting Black borrowers the hardest.
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