To pay for college many students borrow money from the federal government or a private lender. Student loans made or guaranteed by the federal government usually offer the best terms. Some payment plans for federal student loans are tied to a borrower’s income and offer forgiveness of the remaining debt after 20-25 years. Federal student loans also offer subsidized interest rates and more options to borrowers who default on their loans. The problem with federal loans is that there isRead more
Credit Scores and Bankruptcy
One of the common concerns people have about filing bankruptcy is what impact it will have on their credit score. Although I think people worry too much about credit scores, there is some legitimate concern about making sure credit reports and credit scores don’t hinder the purchase of a new home. In a 2007 SmartMoney.com article, the author says: “In many cases, the damage done isn’t nearly as bad as expected. Over the long run, obtaining a score high enoughRead more
Iowa Bank of Mom & Dad: Are your kids leaving you broke?
Every day we discuss financial problems with our clients. Usually we start the conversation by asking our clients to give us a brief history—how did they get to the point of needing to discuss a bankruptcy? Most of the time the answers wouldn’t surprise you; job loss, divorce, medical bills, lay-off/mandatory furlough. BUT, it might surprise you to hear how frequently we hear a story that involves financial aid to adult children…ultimately leaving dear ole’ mom & dad flat broke.Read more
Don’t Make Bankruptcy Your Last Resort
The old adage is that consumers in financial stress should look to filing bankruptcy as their last resort. I’m sure the saying was created by lenders and others hoping to keep people from eliminating debt. But waiting to file bankruptcy can be dangerous. That’s why I think people in financial trouble should consider bankruptcy as a first resort instead. Figuring out how bankruptcy might help right from the onset of financial problems will make people better informed. It may helpRead more
What debt collectors CAN’T Do!
What practices are off limits for debt collectors? Harassment They may not harass, oppress, or abuse you or any third parties they contact. For example, they may not: use threats of violence or harm; publish a list of names of people who refuse to pay their debts (but they can give this information to the credit reporting companies); use obscene or profane language; or repeatedly use the phone to annoy someone. False statements Collectors may not lie when they areRead more
Paying Off Credit Card Debt
When trying to decide between filing bankruptcy or paying off credit cards outside of bankruptcy, it’s important to consider how difficult it can be to pay off credit card debt where the balance owed has grown significantly. For example, if you owe $10,000 on credit cards with an interest rate of 15% and pay only a minimum payment of 4% of the balance each month, it will take nearly twenty (20) years to have the debt repaid. And that’s assuming you’reRead more
Foreclosure in Iowa
Foreclosure is a scary word. The prospect of losing your home and having to find somewhere else to live can create a lot of stress. Foreclosure doesn’t have to be as frightening as it sounds if you understand how it works and how Chapter 13 bankruptcy can be used to stop the foreclosure and put you back on the road to keeping your home. Foreclosure Without Redemption The most common method of foreclosure in Iowa is called “foreclosure without redemption.”Read more
Credit Card Collectors Need Evidence of Debt
The Iowa Court of Appeals has laid out some important rules for anyone trying to collect on a credit card debt. The ruling came after Capital One sued two Iowans in small claims court. The cases had been dismissed because Capital One failed to provide documentation showing transactions on the credit cards starting with a zero balance. On appeal, the Iowa Court of Appeals said it wasn’t necessary for there to be documentation going back to a zero balance butRead more
Bankruptcy & the FDCPA
.There are two very important statutes that serve to protect consumers from some of the consequences of too much debt. The first is the United States Bankruptcy Code. The other statute is the Fair Debt Collections Practices Act or FDCPA. Both statutes individually can help consumers. When you combine the two that is when some really good things can happen. United States Bankruptcy Code First, the Bankruptcy Code allows for the discharge of certain types of debt. If you findRead more
How Do You Know If You Should File Bankruptcy?
Many clients wonder whether they are the only ones facing the kind of financial hardships that lead people to file bankruptcy. That’s obviously not the case since millions of people file bankruptcy every year. But it’s good to know what causes most people to have to file bankruptcy. Should You File? A study a few years ago by researchers at Harvard Law School looked at the causes of bankruptcy and found that more than two-thirds of debtors in bankruptcy hadRead more
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