jetscarbie

Watching myself explode (super stressed) Advice needed

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Yes, I need some advice...or maybe just somebody to confirm what I already know.

I use to have bad bad credit. Fixed and have pretty excellent credit now. The one good thing about bad credit...you don't have to worry about getting new credit. haha

Anyway, when our credit was being repaired..we got tons of credit cards. Some low limits, some high limits. Some good interest, some bad. We were not picky by any means.

The first thing we bought was a home. Then a truck, then a car. Then we would charge a little here, a little there. Hubby went nuts and opened more cards....I think b/c he felt so good to be able to be approved anywhere.

My problem now....we have so many cards. It's almost impossible to keep track when everything is due. I had things set up for automatic payment through the bank.....but that got screwed big time.

We have a citi loan that is due on the 19th of every month. I had the bank paying it on the 18. Well guess what? Citi changed the day to the 17 (they said that the days do change) Late fee was charged. So that basically messed up my automatic payment thing....b/c now I have to double check every bill that comes in with the date that I have it set up.

We've been thinking about consolidating our debt into one single payment. Any advice on what would be a good card to do that with? We talked about trying the credit union....doing credit cards and auto loans both. Is that a good step to try? We also have some medical bills that we are paying on. Should I include them?

And the biggest stress of all.....college. My daughter will be going next year. The school is already pushing about filling this out, and this out. I have absolutely no idea how any of this stuff works at all.

any advice??

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"And the biggest stress of all.....college. My daughter will be going next year. The school is already pushing about filling this. I have absolutely no idea how any of this works at all.."

Depends on the school but usually

The College Will Have Various Payment Options,

Choose the plan that best fits your needs For example, f nd out whether the college offers a deferred payment plan. You can use this option if you feel you'll have trouble meeting the cost of an entire semester.

Some colleges offer creative financing plans, such as prepayment of four years plans or paying on a monthly basis.

Monthly plans usually give you the most time to pay. If the college charges a fee for its extended payment plan, weigh the extra cost against what you would earn by holding onto your money for a longer period of time.

If Your College Doesn't Offer a Monthly Option...

If such a monthly option isn't available, ask for a recommendation for a commercial plan.

Be Prepared for Non-Billable Costs...

Non-billable costs are college expenses on top of the amount you're billed. Be prepared to pay for books and supplies, personal items, and travel. Plus, if you don't live and eat on-campus, you'll have to handle those costs separately.

There are a variety of financing options available for families who are concerned about their ability to meet their family share of costs.

These alternative sources of aid, most often in the form of loans, can help families cover financial aid gaps, or unmet needs in a financial aid package.

Student Loans

If you meet certain criteria, you could qualify to borrow an additional student loan such as an unsubsidized Stafford Loan or a private education loan. Note these loans tend to be more expensive than need-based loans.

Federal Unsubsidized Loans

Students who don't demonstrate need, or need to borrow more than the subsidized loan amount, can borrow unsubsidized Stafford loans.

Unlike subsidized loans you are responsible for paying interest on the loan while in school.

Private Student Loans

There are a number of privately-funded (non-government) loans available to students to help meet the family share. These loans are also known as alternative loans or supplemental loans.

Parent Loans

Parents can also take on loans to help cover the expected family contribution. Certain rules—such as demonstrating good credit— will apply, depending on the loan. Parent loan options include federal PLUS loans.

Federal PLUS Loans

Federal Plus Loans are the most popular amoung parents.

ependent undergraduate students. Parents can borrow up to the full cost of education, minus any financial aid.

Federal Grad PLUS Loans

Graduate students can borrow up to the full cost of education minus any financial aid. Students receive an automatic deferment while in school. There is no grace period, however, students may request up to a 6 month forbearance after leaving school

Home Equity Loans

If parents are homeowners, it's likely that they can borrow against their home. Parents may be eligible to borrow*a percentage of*their equity, which is the difference between the market value of their house and how much is owed on the mortgage. This money can be used to pay for education costs. The rate is comparable to other borrowing options.

An advantage of a home equity loan is that the interest paid may be deductible on the parents' federal tax return.

A disadvantage is that they may have to pay a fee for this type of loan

IRA Withdrawals

An IRA is a savings account designed to put aside money for retirement. The main options are the Traditional IRA and the Roth IRA.

IRA Under either plan, you can be charged a 10 percent fee if you withdraw money before you reach age 59 1/2. If the money is used to pay for college expenses, the 10 percent fee is waived. However, you may be required to pay federal and state income tax on your withdrawals.

Tuition Tax Credits

A tax credit is an amount of money you can subtract from your federal tax bill. It is a dollar-for-dollar reduction of the amount you owe. If you have family members in college, and your income doesn't exceed certain limits, you may apply for a tax*credit.

Obviously some options are better than others, I think its important that you have all the information so that you can make a decision for yourself.

As with any loan make sure you understand all the terms before signing.

Make sure to shop around, research any type of loan for pros and cons, compare any loan offers and then make a decision.

BE WARY OF "MICKEY MOUSE" LOANS!

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Be very, very careful with student loans. They are lions in sheeps clothing.

It is too easy to get in waaaayyyy over your head with student loans - too easy for the parent and too easy for the student.

Remember, school loans are not dischargeable in bankruptcy and too many people are actually pushed into bankruptcy BECAUSE of their student loans ($50k, $100k, and more!). So, if you know at the beginning you are going to need help getting through collage (helping your daughter). The best thing to do is start with a PLAN. Start right now since she is already a jr in high school.

You may want to check into those pre-paid plans - although it is a little late - you get a very good return if your daughter goes to your state school. There are also pre-paid plans for out of state schools - check your options.

I put $10k lump sum in a pre-paid plan for my youngest when she was either a sophmore or jr in high school)and it has paid her collage (at a state school) for the last 3 yrs and will pay all the way through her senior yr of collage. There are other expenses as stated above and surprise expenses like 'local tax' which is much higher than what it sounds like, make sure you check into that.

I would check into that pre-paid plan first - it has saved me many, many thousands. And we did not have to borrow for any student loans.

As to the rest of your cards, get on a written budget. Do not consolidate. Start paying them off in a snowball method (a la Dave Ramsey). JMO.

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Jetscarbie

Denita and ditaloca offer some good advice...

I have a 24yr old daughter in Texas going to school (paying on her own). Also a 14yr son (going through growing pains), says he wants to go to college.

At the age of 47 - it seems every 5 to 7 yrs to make myself more marketable with the changing economy, been going back to school to learn a new trade. (I don't know what I want to be when I grow up......:mrgreen:)

2yrs ago learned that not all school loans are the same. Enrolled in a computer trade school for a MSCE certification. At first the councilor made everything sound so easy, paying back a $17k loan. I would not have to pay until six months until I completed my class. I finished my 1st class, started my 2nd class, then started to get bills for the loan. I had to start paying my loan back six months after my 1st class ended.

Found out they enrolled me into an unsecured loan with a 9.74% adjustable interest rate. I was not happy which caused me to cancel my remaining classes with that school. There was mainly another reason, was not happy with the instructors.

Ended up at another school for CISCO, a friend told me of a state program that would cover the course. Completed 5 classes - didn't have to pay anything.

You should look at what programs your state has.

Good Luck....:)

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Student loans are not dischargeable in bankruptcy unless you can show that your loan payment imposes an "undue hardship" on you, your family, and your dependents. Non dischargeable debts are those debts that you cannot totally eliminate when you file for bankruptcy and will have to be paid by you It is almost impossible to show an undue hardship unless you are physically unable to work and the chances of your obtaining any type of gainful employment in the future are non-existent.

Chapter 13 Although you may not totally eliminate student loans in bankruptcy, you can consolidate them, with your other bills, in a Chapter 13 proceeding. Under this chapter, you can propose a repayment plan in which to pay your creditors over three to five years. For a Chapter 13 bankruptcy, you'll need a stable income with disposable income and must have no more than $1,010,650 in secured debt (debt involving property that your creditor might take if you don't make your payments) and $336,900 in unsecured debt. These amounts are adjusted periodically to reflect changes in the consumer price index Chapter 13 will also stop collection action against you If you include your student loans in a Chapter 13 repayment plan, depending on certain factors such as the size of the loan, the number and amount of your other debts, and the amount of your disposable income, you might be able to make a dent in the loan balance over the life of your plan However, you will still owe whatever student loan debt remains when you complete your plan.

Which brings us to; Challenging the Loan Balance

Often, a student loan has been transferred between lenders many times, and it's not clear just how much is owed or whether any charges in addition to the principal amount of the loan are in accordance with law In a Chapter 13 bankruptcy, you can use an objection to the claim of the holder of a student loan to get a court's determination of your rights. Once a judge decides what is properly owed, the bankruptcy court decision is binding on the lender even if the repayment period on the loan stretch beyond the end of the bankruptcy plan.

The Higher Education Technical Amendments of 199(HEA) eliminated all statutes of limitations for any collection action by a school, guaranty agency, or the United States under a federal loan program. The amendments also eliminated all limitation periods for tax intercepts, wage garnishments, and other collection efforts If you're not able to discharge your student loans in bankruptcy or establish a repayment plan in a Chapter 13 proceeding, the federal Department of Education has the right to

Tack collection fees of 25% and collection agency "commission" fees of approximately 28% onto the principal, interest and penalties you already owe

Take your federal income tax refund until all your defaulted student loans have been paid

Garnish up to 15 percent of your wages, without suing you first

Take as much as $750 per month (up to 15 percent of your income) in federal benefits to which you might be entitled, including social security retirement and social security disability income, and apply that amount toward your outstanding defaulted student loan debt

Sue you for your outstanding student loan debt and place liens on your property!

Very scary stuff, so you definately do not want to default on a school loan!

The Wall Street Journal has a great new article that evaluates 529 plans, taking into account the current economic meltdown in a study by Morningstar Inc.

http://parentstudentloans.wordpress.com/2009/04/23/the-best-and-worst-of-529-plans/

As stated previously research all options before commiting to one or the other and make sure you have a realistic plan of action.

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Found out they enrolled me into an unsecured loan with a 9.74% adjustable interest rate. I was not happy which caused me to cancel my remaining classes with that school. There was mainly another reason, was not happy with the instructors.

Nitpick, maybe, but I felt that it was important to mention. You signed up for a loan at 9.74% variable APR, not the school. If you failed to review what you were signing or didn't bother doing the math, that is solely your fault.

I am pointing this out not to take a personal swipe at you but because this is a credit repair forum. A very important part about credit repair (and personal finance in general) is taking responsibility for one's choices. You can't simultaneously fix the problem while passing the buck to someone else.

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Thanks for the advice. Yes, I think we are going to try the snowball payment on credit cards first. We really hate the though of consolidating right now.

I am really scared about college...not b/c my child is growing up and moving away....I am more scared b/c I didn't prepare....and didn't realize how much it was. I don't know anything about college.

All I know is my daughter wants to be a doctor. She has wanted to be that since she was 5. And at some point I am going to have to talk to the counselor at school about all this information she is sending me..b/c honestly...I don't know what it means. I am pretty sure we will have to take out some type of loans if she can't get full scholarships or more help. I just don't want to do the wrong thing.,...and tie her to something that she will never be able to handle...and the same thing for me.

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Have her start at Community or Junior College. Just make sure the courses will transfer to a four year state school in you location.

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Also, have her research medical schools. A great number of them do not require a 4 year degree. I have known many docs without an undergrad diploma. Also, she might look into 3+4 programs.

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As someone guilty of filling out college admin and scholorship eligibilty papers at the last minute, PLEASE DO IT NOW!

Its stressful and more time consuming than you'd think it would be. I almost lost out on a scholarship because the assistant principle at my old H.S. didn't finish and send out a recommendation.

Everyone talks about senioritis, if you've waited until the last minute to finish grant and scholarship paperwork your way too busy for senioritis....

Also prepare you daughter for college life, this of course is easier said than done, I'm sure we all remember how we KNEW EVERYTHING ALREADY and how stupid your parents were during the glorious teen years.

Which only adds to the shock when "real life" happens.

You know the moment you realize that you actually have to buy toliet paper (and the consequences of not doing so), the absurd cost of healthy food, the fact that laundry requires detergent and time....etc! The tough choices to maintain your living budget, eat raman noodles all week, turn a/c up to 87 and get a new outift to "go out" in, or eat well, don't suffer heat exhaustion and have nothing to wear... boys are different all I remember them spending money on was food and drinks, I don't know how many guys I knew who had no problem using a credit card to pay for fast food...

I think you get more credit card offers your first week of college than any other time in your life combined.

I had at one point something like 20-30 credit cards, why?

Cause I wanted the freebies vendors were giving away to get you to sign up. What was scary is at some points I had duplicate credit accounts with the same lenders.

(At the time I found this amusing)

I guess I "lucked out", I knew to never get a card that charged any annual fee, or a "no usuage" fee, I didn't ever use the majority of the cards and I still have some of the cards. (The majority are "store" cards)

I remember the girl killing herself over credit card debt was was some urban legend story that would sorta be re-told at opportune times...but of course was never taken seriously.

I remember the majority of people I knew had the "that will never happen to me" sort of attitude - it goes hand in hand with the "I will change the world" attitude.

So I think a good idea might be to sign DD up for a credit union or bank seminar, or community center class on personal finance. (I think its better if it comes from 3rd party because teens are notorious for not believing or listening to parents)

There's no better future you can give your daughter than one that includes financial freedom and security.

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....

So I think a good idea might be to sign DD up for a credit union or bank seminar, or community center class on personal finance. (I think its better if it comes from 3rd party because teens are notorious for not believing or listening to parents)

There's no better future you can give your daughter than one that includes financial freedom and security.

This is so true!

My daughter overloaded herself this past year on cc's and cc debt to the tune of $10k! She works 3 days a week and goes to school full time too. She was afraid to admit that she was charging up her cards. They were given to her they same way you got yours!

She finally came to me and said she was having difficulty...I did not jump in and rescue her because she would not learn the long term lesson. I did help her make hardship arrangements with the creditors (I gave her the process, she made the arrangements and the payments). She is learning that it was too easy to get into debt and a lot harder to pay your way out.

I am now trying to get her to listen to Dave Ramsey...because if she learns this lesson now at 21 yrs old she will be saved decades of financial hardship. But, of course, when it comes from Mom...what do we know??!! :shock:

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