I will blog often about student loan debt. Student loans are just a bill you must pay. Most people have education debt in some form or another. Federal and private student loans are not typically handled by a bankruptcy filing. However, other debts like financed cars, credit cards can hinder student loans from being paid.
Student loans are the next housing bubble. Most families simply cannot afford to send children to college without financial help. Other than working with the financer directly (there are some programs available) there is not a 3rd party program to consolidate loans to an affordable payment. Simply, you must pay the loans.
On July 1st, the interest rates on federal student loans will increase. Stafford loans for undergrads will rise from 3.86% to 4.66% and PLUS loans will increase from 6.41% to 7.21%. If you have a large balance in student loans and other debt, the increased payment could significantly affect your budget.
Bankruptcy will not help eliminate your student loans. But, you could eliminate the rest of your debt to make the loans affordable. When there is substantial other debt (i.e. credit cards, payday loans, etc), something has to give. Whatever is not paid, can go into collections and ultimately into a lawsuit.
Take the long weekend and make a budget. You can use a Geraci Law version by clicking here. If you have more going out then coming in, give us a call to see if bankruptcy can help!
The Consumer Financial Protection Bureau released a report analyzing the effect of medical bills on credit scores. Findings show unpaid medical bills carry the same weight as unpaid rent when calculating scores. Medical debt and credit scores
Many people do not realize they owe medical bills. After a hospital stay or doctor’s visit, it’s easy to assume insurance covers 100% of the cost. If unpaid, a bill can go to collections and start negatively affecting a credit score.
Debt is reported to credit bureaus in two ways – from the original creditor (i.e. doctor, hospital) or from a collection agency. Majority (close to 99.4% according to Consumer Financial Protection Bureau) is reported by collection agencies.
Most medical bills are caused by expensive and unexpected procedures – i.e. emergency surgeries, hospital stays, and emergency room visits. Insurance may pay part but not the entire bill. You could easily find yourself owing thousands for an emergency room visit.
Bankruptcy is an option. If you have a tremendous amount of medical bills, filing a bankruptcy will alleviate the stress that comes with owing. I spoke with a man from Illinois who was diagnosed as a diabetic. He was uninsured and spent three days in the hospital. In the end, the bills amounted to over $80,000. Without a bankruptcy option, he would spend the rest of his life trying to pay down a three day visit.
Retirement should mean enjoying golden years and relaxation. It shouldn’t mean stress and sleepless nights trying to figure out a way to juggle debt. When most people retire, most live off a pension or Social Security benefits. Trying to pay debt, prescriptions and other expenses is difficult when you have other expenses.
Last year, people receiving Social Security benefits received a cost of living increase. Around the same time, the cost of Medicare and Medicaid increased, many retirees lost income. Many need to pay for supplemental insurance adding another expense to a fixed budget.
Increases in living costs can be disastrous for a fixed income. Monthly fixed expenses easy to pay when you are working are budgeted for when you retire. According to the Bureau of Labor Statistics, the cost of a gallon of milk increased 50 to 60 cents per gallon since January 2014. A gallon of milk could be a luxury for someone on a fixed income!
If you are about to retire and have debt; consider bankruptcy so you can retire debt-free! By eliminating the minimum payments on your unsecured debt, you can readjust your budget to afford the rising costs of things like milk.
Financing a vehicle with bad or no credit usually means high interest and large car payments. If the car is repossessed, the financer will auction off the vehicle for pennies. You will be responsible for the difference and could be sued for a car you do not have anymore.
You can file a bankruptcy with Geraci Law to handle the debt. If your car was repossessed and has not been sold, we file a Chapter 13 to stop the auction. Otherwise, Geraci Law attorneys can file a Chapter 7 to eliminate your obligation to the deficiency.
After your bankruptcy is discharged, you can rebuild credit by financing a vehicle. A way to shop for a new vehicle is to try to get a preapproval letter. Using a preapproval forces you to use a budget – if the preapproval letter approves you for a $25,000 vehicle; you know your limits.
Most people need a vehicle to get around. If you just filed a bankruptcy or have a high interest car loan, you have options to find an affordable vehicle. Step one is handling the bad debt with Geraci Law and step two is creating an affordable plan.
Below are tips for filing a successful Chapter 13 bankruptcy. A Chapter 13 is a repayment plan for 3-5 years. The most important advice I can give is to find a great attorney to represent you for the next few years.
- Stay in contact with your attorney! If your income or expenses change, call your attorney. A Chapter 13 success relies on timely payments to your bankruptcy trustee. If you are unable to make a payment, you have options! Not every attorney is the same. You want a live person on the phone not a voicemail. Geraci Law attorneys are available Monday-Saturday to handle your payment issues. We have a solution for almost every Chapter 13 problem.
- If you are not on payroll control, you are responsible for making payments to the bankruptcy trustee every month. Some trustees offer online debit payments but most require certified funds mailed. If the payment comes from your payroll check, you do not have to remember to send in the payment or go to the bank once a month to pick up certified funds. Geraci Law will handle your payroll request if you choose this payment method. It’s hassle free!
- Read your mail. It sounds simple but you will receive correspondence from the bankruptcy court from by mail. Some law firms will not call if there is a problem on your case and leave you to make sense of complicated information from the bankruptcy court. If you hire Geraci Law, we are representing you from the first meeting until discharge. Geraci Law clients are free to call with questions or concerns.
- Creditors can file motions with the court and your bankruptcy attorney should attend on your behalf. Many motions only take 5-10 minutes but are important to your case. Geraci Law Attorneys are in court every time it is in session. For any motion, your Geraci Law attorney is available to represent you. Some attorneys handling a few cases per month will ask other attorneys to cover the meetings or not attend at all.
Chapter 13 bankruptcies are complicated. Geraci Law has expert attorneys in Chapter 13 bankruptcy issues. We can help your case be successful.
Congratulations to all 2014 graduates! Many college grads, graduate in debt. Student loans or personal loans help students pay for college. After graduation, the loan debt comes due. Many grads struggle to find jobs and many jobs available barely cover living expenses let alone student loan payments.
According to a recent study by the Pew Research Center, college graduates under 40 with student loan debt have a median net worth of $8,700. This is low because most people with student loan debt have other debts like credit card and car loan payments.
The best gift to give a grad this year could be a bankruptcy. A Chapter 7 bankruptcy can eliminate other debt like credit cards, personal loans, or medical bills. It will be much easier to pay the student loans if there is no other debt to worry about paying. A Chapter 13 plan can help consolidate debt in an interest-free repayment plan. A college grad can start a new job and file a Chapter 13 to make the debt payments affordable.
Geraci Law Attorneys have hundreds of hours of consumer bankruptcy law experience. If you just graduated, your financial situation is about to change. Peter Francis Geraci and Geraci Law can help you get control of your finances!
If you live or drive in Chicago, you know the consequences of parking tickets. A missed ticket payment on will double the fine, a couple of missed payments can equal thousands in additional fees. I talk to many people who let a friend or family member borrow the car and rack up thousands in fines. The car owner then finds a boot on their car and thousands of parking tickets.
When the parking tickets are not paid, the city can suspend your driver’s license. Generally, to get on a payment plan, you need to pay 50% of the debt. If you have $5,000 in parking tickets, you need at least $2,500 to lift a suspension.
If you are working with a suspended driver’s license for parking tickets, you have an option with a Chapter 13 bankruptcy. You can consolidate the parking tickets and other credit cards, medical or other debt. It is an interest-free repayment plan affordable to you!
A Chapter 13 bankruptcy with Peter Francis Geraci and Geraci Law can be filed in as little as one day and for as little as court costs!
Many economists claim unemployment rates are decreasing but wage growth (increases in salaries) is slow. Many jobs are only part-time and many full-time employees are underemployed. When an employee cannot keep up with increased costs of living, there simply is no money available to pay other debt.
A minimum wage in Illinois is $8.25 per hour. An employee working full-time makes $330 per week, before taxes. Average rent (in the United States) for a one-bedroom is approximately $750 per month. If this person has debt, this person has few options.
A bankruptcy will help with the debt. You can eliminate credit cards, payday loans, and other unsecured debt with a Chapter 7. It should be easier job hunting without collection calls or the worry that comes with owing.
Peter Francis Geraci and Geraci Law attorneys offer affordable payment options for Chapter 7 attorney fees. Without salary or pay increases, almost everyone is living paycheck to paycheck. Geraci Law Attorneys in Illinois, Indiana and Wisconsin can help you get out of debt.
A common question is, “how do I rebuild my credit?” The first step to rebuilding is taking care of your past due debt. Every late payment, co-signed mishap and judgment affects your credit. If you leave untreated, you could face a wage garnishment, judgment lien and a large hole to dig out of.
Debt settlement and payment plans do not work for everyone. In order to settle, you usually need savings to do so. Creditors will work with you if you can pay them in full, quickly. You could be better in a bankruptcy with Peter Francis Geraci and Geraci Law.
A Chapter 7 bankruptcy eliminates your debt and a Chapter 13 consolidates. In a Chapter 13, you can pay back what you can afford to pay. Upon discharge (of either Chapter 7 or Chapter 13) you have a fresh start!
What you do with this fresh start can help determine how quickly you rebuild. You should save money, make payments on time (on car notes, mortgages, etc.) and reestablish a payment history. You no longer need to rely on credit and can live within your means.
You can take the first step to becoming debt free by calling us. If you are looking for additional information about credit, please watch the free counseling video by clicking the link below.
A young man wanting to marry his girlfriend came into the Geraci Law Northside office and met with Attorney Laura Caputo. His girlfriend would not marry him until his debt was under control. He was overwhelmed by medical bills, past-due utilities and behind on his car payment.
Originally, he wanted a Chapter 13 repayment plan to stop the repossession of his vehicle. He financed an older model in need of repairs. He fell behind on payments after the birth of his child and could not get current.
Attorney Caputo reviewed the man’s budget and Chapter 13 options. He would pay almost double the car’s value. He decided Chapter 7 debt elimination could give him a fresh start and make his girlfriend happy.
An experienced bankruptcy attorney like Illinois Geraci Law Attorney Caputo provides long-term solutions to problems. A Chapter 13 bankruptcy would stop the repossession but he would be paying thousands on an underwater vehicle. Instead, he is now debt free and able to plan his wedding.