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Debt Financial

Where Can I Find The Best Debt Consolidation Company?

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In these tough economic times many Americans are faced with significant credit card debt and are looking for help reducing their monthly payments. Debt consolidation allows you to combine numerous debt obligations into one and streamlines the repayment process for credit cards, loans, and other bills. Debt consolidation usually includes lower monthly payments and a repayment plan that saves money and resolves debt faster than you could on your own.

It can be hard to decide on what debt consolidation company or website to use. We have done the research and we are providing you with our top picks for debt consolidation and loan options.

3 Major Benefits of Debt Consolidation

1. Track debt repayment
Once you consolidate your debts, regardless of which method you use, you will have one bill to pay. This can help you stay on top of your finances and set an attainable goal for your debt repayment plan.

2. Save money on interest
Ideally, you will use a financial product with a lower interest rate and fewer fees than what is charged on your current debts. This reduction in interest will help you save money you’d have been required to pay had you not consolidated.

3. Build your credit score
Paying off credit card debt with a loan can have an immediate effect on your credit score by lowering your credit utilization ratio. This is the total amount of credit available to you versus the amount of credit card debt you have.

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Career & Education Education Financial Loans

Will This Type of Student Loan Forgiveness Be Next?

Could This Type of Student Loan Forgiveness Be Next?

A group of over one hundred organizations representing student loan borrowers recently wrote an open letter calling on the Education Department to overhaul its income-driven repayment program. The goal of an income-driven repayment plan is to make payments more affordable and give borrowing who have already been paying for 20 to 25 years a way out. However, these plans are so poorly designed that only 32 people have qualified for forgiveness as of the beginning of 2021.

According to the National Consumer Law Center, a consumer advocacy group, the government made a promise to borrowers that federal student loan payments would be affordable and would not be a lifetime burden. Unfortunately, the Education Department’s income-driven repayment program has “failed to deliver on every aspect of that promise.”

What is an income-driven repayment plan?

An income-driven repayment plan sets your monthly student loan payment to an affordable amount based on your income and family size. There are several different income-driven repayment plans, but they all generally require borrowers to pay between 10 and 20% of their discretionary income for 20 or 25 years.

What are the downsides to this type of student loan?

Although income-driven repayment plans exist to help low-income borrowers, they come with several downsides as well.

You might not qualify

Most private student loans don’t offer income-driven repayment plans, so you will likely only qualify if you’re a federal student loan borrower. The qualifications can be confusing though: Federal Parent PLUS loans are not directly eligible for this type of repayment plan but may become eligible by including the loans in a Federal Direct Consolidation Loan.

Your loan balance might increase

It’s also possible for student loans to be negatively amortized under this type of repayment plan, which means the loan payments you are making are less than the interest that accrues each month. This results in a higher loan balance which can feel like you’re making zero progress when paying down your debt.

Married borrowers might have a higher payment

Some income-driven repayment plan payments may increase if the borrower gets married and their spouse has a job. This is typically seen as a marriage penalty and can result in a much higher payment than you’re used to due to your joint income.

Student Loan Forgiveness takes a long time

If you’re seeking forgiveness of your student loan debt, you won’t see it until after 20 or 25 years of payment on an income-driven repayment plan. This can feel like you’re in debt forever since you’ll owe money for longer than the standard repayment plan and will end up paying more interest in the long run.

What’s next for student loans?

Advocates are calling for massive reform to the income-driven repayment program since the current program is too complicated, requires too much paperwork, and is poorly managed by the loan servicing companies that run them. Only about 34% of borrowers manage to recertify every year, which is a dismal amount considering these repayment plans are supposed to be helpful.

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Debt Financial

Investing When You’re Living Paycheck To Paycheck

How To Invest When You're Living Paycheck To Paycheck

High living costs and stagnant wages leave millions of people left with nothing but a small amount every month. Do you have a lot of expenses like bills, travel expenses, saving for retirement, grocery, and a lot more? Many people who are living paycheck to paycheck think they cannot invest some money for the future. Well, that’s not the case, as you can make some investment by using your money wisely.

So, here are some realistic approaches to invest when you are living paycheck to paycheck.

1. Consider Micro Investing

If you find it hard to spare some amount and save in your account, Micro investing is a good idea.

Start an investment account with the least amount of money that you can save monthly. You can also use an easy app like Robinhood, Acorns, Public.com, and many more. Then you can link the app account to your bank account. Thus, whenever you buy anything, your change will automatically get invested in your account. 

2. Cut down Your Expenses

Set your budget for monthly income and expenses; it always helps. In this case, you can reduce the amount for the less essential and extra expenses. It may not be as easy as it seems; however, it will bring an outcome if you try consistently.

By cutting down some expenses, you will have some amount by the end of the month. Besides, you can choose a cheaper service to get rid of the heaps of expenses.

3. Purchase a Portion of Shares 

Are you keen on investing your money in a company in the form of dividends? Financial investing involves buying a portion of a company’s shares instead of going for the whole. So as the company’s shares fluctuate up and down, you will get your dividend in the same way. 

4. Utilize Any Bonuses or Extra Income for Investing

Here is another idea that sounds beneficial! You can invest extra money and the bonus you get. You could utilize multiple ideas like purchasing the old items and selling them again. Invest in any shop to get a monthly return, and you can also do many more things. 

5. Set up an Emergency Fund

It is the best practice that brings realistic outcomes. Even if you are left with a small amount after cutting down daily expenses, keep it safe in your money-saving jar. You can also set up an emergency fund to deal with unexpected expenses in the future. 

Final Thoughts

It is a stressful and painful experience to live paycheck to paycheck. You can fight against this challenging situation. However, you can build a better and wise strategy to come out of it. The above-discussed ideas are worth trying and do not even require any particular technique. So, choose any idea and start investing today. 

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Bankruptcy Debt Financial Legal

Can I File For Bankruptcy Online in 2021?

Can I File For Bankruptcy Online in 2021?

The internet is the height of convenience. Despite all the complaints we might have about technology, one thing we can admit is that being able to handle all of your expenses from the comfort of your desk is no small luxury. But can you make a big financial like bankruptcy online? Is it possible to file for bankruptcy over the internet?

In this article, we’ll discuss what your options are when considering whether or not you can file for bankruptcy online. By the time we’re done, you’ll hopefully have all the info you need to make the right call.

Can You File For Bankruptcy Online?

For the most part you can file for bankruptcy online. There are a few caveats, as there are with really any big decision, but you likely won’t have trouble finding ways to make such a difficult decision with at least a little bit of comfort and confidence.

With your computer, you can do a number of things related to bankruptcy. For one, you can, in fact, receive bankruptcy filing forms and any local documentation relating to your application for bankruptcy. This takes a lot of the stress of gathering documents and filing papers out of the task.

You will also be notified about the progress of your bankruptcy case over the internet. Your bankruptcy court will send you email updates stating the important facts of your bankruptcy case. This will help you track your financial situation and get a hold on where you are.

After your bankruptcy is filed, you may also be able to check on how your repayment plan through the internet. While this feels more like a chore than a privilege, it will help in the necessary budgeting process that will come during your recovery phase.

You Cannot Do the Actual Filing

Unfortunately, most of us will have to do the actual, physical filing part of filing for bankruptcy in an actual, physical setting.

There may, however, be places where the filing process can be done completely online. This will depend on the district your filing in and the rules and regulations it has decided upon in the past.

If you’re unsure of the rules in your district, it might be good to consult a financial professional. The may be able to help you jump through all the hoops when filing bankruptcy and advise you on recovery afterwards.

Trustees also might not be so hospitable to the idea of going paperless. While many districts have discussed moving in a more electronic direction, the trust that floats around the idea of the hard copy filing process is just too big to overcome for most trustees. This is why hard copies may still be required here.

Any fees related to court filing are also usually not offered on an online basis.

Thus, there’s a lot of the process you can do online, and a lot that you can’t. You will be able to do a lot of the filing documents electronically, but submitting them and onward will be a physical process.

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Debt Financial

Debt-to-Income Ratio: Why Is It Important?

debt-to-income ratio

There are many unintuitive systems and statistics within banking. But above all of those, the most confusing is your “debt-to-income ratio”.

But what is debt-to-income ratio?

Debt-to-income ratio is the result of a math equation: First, take the amount of debt you have to pay every month. This includes house payments, car payments, student loans, medical bills, basic utilities, and rent. Add them all together and you have the “debt” part of the equation.

Then, add together all your monthly income sources. Banks will only care about your “official” sources of income—that is, those which are subject to taxes. That gives you the “income” part of the equation.

Now, divide the “debt” value by the “income”. If your income is greater than your debts, you will get a decimal point. For instance, if you have $3,000 in debt every month, but make $10,000 a month, this will divide into .30.

That .30 means that 30% of your income is tied up in debt. That percentage is your debt-to-income ratio.

But what happens if your debt is greater than your income? Well, to begin with, the number you will get from dividing “debt” by “income” will be above 1. This is a problem as far as banks are concerned.

Most banks will not give loans out to anyone whose debt-to-income ratio is higher than 43%. This includes mortgages, auto loans, and student loans.

Why did they pick that number? No one really knows, but it has been that way since the 80s. Whoever made the calculation that decided 43% was a red flag has long since faded into history.

While the reasoning behind the exact number is unknown, the reasoning behind having any kind of number at all is understandable. After all, banks have to have some method of determining your ability to pay off a loan.

Ratioing your debt with your income is one of banks’ primary methods of determining the viability of giving you loans. This means that it is an important factor in both a person and a business negotiating with their bank.

So, how do you manage such a thing? How do you keep your debt and income in a place where you can get the loans you need to make the moves in life you want to make?

It is easy to think of both your debts and your income as immovable things. This certainly feels true, but it is not always the case.

Remember that “debt” and “income”, in these cases, are both calculated before taxes and other things that might affect that total output of your income.

This means that if you wish to set aside more out of your income to pay your debts, it won’t affect this ratio. Paying your debts off doesn’t actually affect the ratio, but it can affect your bank’s willingness to look past the ratio.

Ultimately, it’s one factor among many in negotiating with your bank. It is not the final word.

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Debt Financial

The Not-So-Secret Strategies To Find Debt Relief

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The early 21st century has found an increase in the debt of individuals in developed, First World countries mostly as a direct result of the American economic recession around 2008. Personal debt rose from $2.71 trillion in 2008 to $3.76 trillion in 2017. Therefore, if you’re one of the many that have some form of personal debt, know that there are means to get help.

There are a lot of different versions of debt depending on who you are and what you owe. In this context, we’re referring to an individual’s debt. The early 21st century has found an increase in the debt of individuals in developed, First World countries mostly as a direct result of the American economic recession around 2008.

Management

Managing debt is where most people have to start. This all comes down to working out a budget plan. Unfortunately, this plan only works best on unsecured debt, like credit cards, personal loans and overdraft fees. The credit counseling and debt management companies can negotiate with the unsecured debt lenders to reduce the total owed or monthly payments, which can be a massive help if you’re living paycheck to paycheck.

There are a lot of different ways to look at debt management, because it basically includes all of the other strategies in one package. Managing the debt begins at the source, with you, and on how you plan to spend your money while making ends meet. Creating a budget plan as early as possible will help you get started with handling debt.

Consolidation

Debt consolidation is one of the first and smartest avenues to seeking out debt relief. If you’re in debt from a few different bills with high interest rates, like multiple loans or a few credit cards, it’s possible to consolidate all of the bills into one lower-interest loan. This option both reduces your overall debt and makes it faster to pay off.

Consolidation isn’t a magic cure-all and won’t work if you’re unwilling to stick to a budget. If the debt is less than 50 percent of your income, your credit isn’t enough to qualify for a zero percent credit card or you’re unable to consistently cover payments, consolidation may not be the best option. Of course, speaking with banks, credit unions, or other loaners may give you a better idea of how to reach consolidation with your personal situation.

Debt Settlement

Debt settlement is risky business. While this means that you can pay less than the original amount owed without fear, this option is still basically a last resort. Debt settlements can ruin your credit and be extremely expensive to reach, not to mention taking years to even establish.

The only way you can be eligible for a settlement is if you’re unable to pay any amount on your debt. Collectors will be willing to take some amount of money rather than nothing but at a strong cost to you. This is only applicable with some types of debt, as houses can be foreclosed and cars repossessed, but debt like student loans can be settled. Options like income-based repayment plans should be considered before deciding on debt settlements.

Tax Debt Relief

Tax debt is a bit different from your average debt. This is money owed to the IRS and can be serious stressor, especially if you have debt accruing from previous years. Every month tax debt is unpaid adds a 0.5 percent interest penalty, so things can add up fast. The IRS even has the power to put a lien or levy on your property, meaning they can take the proceeds if you sell or just take the property and sell it themselves.

There are a lot of companies out there and a lot of scams who say they’ll help you get out of tax debt. One of the best steps that can be made is to speak to a worker at the IRS directly to set up a payment plan. There will be penalties and interest to come with the plan but these are better than not paying at all. You can also seek out an office in compromise or OIC, which is similar to a debt settlement as it’s a way to reduce your payment if you can’t repay at all. As with the settlement option, the IRS suggests you try all payment plan options before considering the OIC.

Getting out of Debt

The idea of debt has been around since ancient historical times, even mentioned in the Book of Leviticus. So long as economy and debt has been around, so has debt forgiveness. Anyone can reach debt relief, but the stress coming with the trouble is a different problem.