Ask MetaFilter questions tagged with debt

Exchange rate for repaying debts?

Weng — Mon, 21 Dec 2009 16:41:42 -0800

FinanciallyCluelessFilter: If I borrowed money from a friend in British pounds (when I was in the UK) and am now repaying him in Australian dollars, should I be repaying him at the current exchange rate, or the historical exchange rate at the time of the loan? I'm guessing the latter, but I'm interested to know other people's opinions / if there is a standard practice. I just noticed that the difference between the current exchange rate and that of a few years ago, would make a couple of thousand dollars difference in the total of the debt repayment. (On a related point, should I/he be factoring in the actual fees for currency exchange?)

What does one say to a generous gift from a dentist?

neewom — Mon, 07 Dec 2009 13:35:56 -0800

How do I thank my dentist for going above and beyond? My dentist has given me an extremely generous gift - not only has he fixed a number of dental problems, but he has shown amazing empathy and care, and has decided to clear my $5000+ debt.

Due to a string of unfortunate events this year, including losing my job and then losing UI benefits, I have been struggling to pay my bills while I continue to look for a job. This afternoon, I got a voicemail saying simply, "Call the office... I have talked things over with Dr. ___ and, Merry Christmas, we have decided to clear what you owe." When I called back, I was close to tears (and I don't normally cry outside extreme circumstances).

I consider him and his staff to be more family than mere dental pros, but saying that in a letter... Everything I can come up with to say in a letter sounds trite to me, and unsuitable.
I do plan to write a letter but also plan to show up and give the man and his staff huge hugs... but what can I say? I suck at letters anyway, but this is extremely important to me. Will a simple "thank you" be enough? What sort of things should I avoid?

Help! Credit card elimination or consolidation?

antipode12 — Sun, 06 Dec 2009 09:31:20 -0800

Help! -- My credit debt is nearly $50,000, my mortgage is upside down by 25% and my fiancee walked out the door a month ago. I can't make my bills. I'm trying to sort out which route to go with the credit cards. A service like CCCS? Or some other route like Credit Elimination? Please help me understand this. Thanks

Financial crisis in the family, what can we do?

jrdnbaade — Fri, 04 Dec 2009 04:06:46 -0800

My mom was diagnosed earlier this year with diabetes, and thats where things started getting really bad. The insurance we have won't cover anything she's needed for it. She's doing tremendously better now, but it's been replaced by a deep depression because the extra costs are just too much.

She resorted to using credit cards to pay for her medication and supplies, and now that those are maxed we're even worse off because of those bills. She's been trying so hard to find some help but theres been nothing out there.

We applied for food stamps, but got turned down. She's looked for different insurance companies, but none will cover her because of the diabetes. She's been denied for loans to try and consolidate her debt. Even the debt consolidation companies she called won't help because theres no money to pay their fees. We can't even get a first mortgage because we don't have the money to pay for the application.

It's really hard seeing her so upset, and blaming herself for everything. I've gotten her to agree with my helping her budget to try and keep some safety nets, but that doesn't really help us until we get out of this hole.

She's a pretty timid person and I don't know if she's not being aggressive enough with the people she's been in contact with for help or what. She's been trying to find a new job too on top of all that because her boss has been treating her pretty badly and has recently cut her hours. It's been pretty rough in Michigan though as far as jobs come.

I thought I'd come here to seek out any suggestions to try to get us out of this mess. Any information on insurance companies that won't deny us for preexisting illnesses, any advice on getting ourselves out of this debt, even some budgeting tips for when we're in the clear would be greatly appreciated.

What is the best way for me to try to get a debt consolidation loan?

drjimmy11 — Thu, 03 Dec 2009 22:17:49 -0800

What is the best way for me to try to get a debt consolidation loan? I have around $20k of credit card deb. The interest rates vary, some are quite high and some are decent. I have a decent salary and I could pay it off in a few years, but I would prefer to get a debt consolidation loan and pay that instead.

The issues:
1. My credit score isn't very good, around 650 at the moment. When the financial crisis hit, a bunch of my cards closed my account or lowered the credit limit right down to the balance I was carrying. Ratio of debt to available credit is the main thing holding my score down- prior to the crisis it was up around 700.

2. I have one debt consolidation loan from my credit union already. This will be paid off in about 3 more payments. This was a "special offer" they had and I'm not sure they offer any specific debt consolidation loan right now. I also owe my bank about $3500 on a Visa card they issue. I've had an account there for about 9 years now and in general they've been great.

I'd like to get a loan to pay off some or all of the debt. A good interest rate would be nice, but I realize that's probably not going to happen in the current climate and with my crummy credit score. My main goal is get the debt off my credit cards and get my credit score back up.

So my questions are:

What's the best way to approach my bank about this? I don't want to just randomly start applying for loans without knowing if I'll be accepted. I'd like to get a little more insight into the process they use:
-Will I help my chances if I pay off the credit card they issue first? -Will it significantly help my chances if I finish paying my current loan before asking for another one?
-How much of a factor is the amount I ask for? I would be happy even being able to borrow $10k or so. When asking for these kind of loans, does it make sense to just ask for a high amount, and then they will meet you with what they're willing to lend, rather than just saying "no?" I think that's how it happened last time.
-Does it hurt my credit score to apply for and be turned down for a loan?
-If anyone has insight into the inner workings of giving loans, I'd be curious to hear an estimate of what kind of credit score is generally needed to get a loan like this.

Finally, is there any website that would help me find other banks that might be willing to give me this loan? Or are there any other novel solutions to revive my credit score I'm missing? I realize no one is lending much money right now, so the only answer may well be "just pay it off yourself."

Other data:
-I don't want to go into debt consolidation or bankruptcy.
-I rent and lack many other valuable assets. My car is old and beat up.
-I am in California.

This is not a referendum on the wisdom of my past financial decisions. Thank you.

Time to pay the piper, but I'm still paying a DIFFERENT piper.

Anonymous — Wed, 25 Nov 2009 13:58:15 -0800

I'm a graduate student who has been in school continuously in Canada for 10 years now. Now the student loan people want to make me pay. What can I do? I'm a graduate student who began university in 1999 in British Columbia. In my first year of undergrad, I applied for, and received, a government student loan amounting to a colossal $260. After that, I did not apply for any further funding until I began my graduate education in an MA program, also in BC. I received student loans for three years as a result of this. I finished my MA, and went on to do PhD work in another province.

I have diligently sent in my forms indicating that I am still a university student and have never had a problem. Yesterday, though, I came home after being out of town for the weekend to find a letter saying I am to begin re-payment as I have used up my 520 months of grace period, even though I am still enrolled in a Canadian (non-BC) university as a PhD student.

This threw me for a loop as I had, a month previous, received a letter confirming that they had received my proof of enrollment and I was still okay to not pay anything just yet, being covered until the end of the semester after my proof of enrollment indicated (I have to do the proof of enrollment each semester). They want me to begin payment on the entirety of my student loans, not just the $260 I borrowed ten years ago.

I spoke with the student loan people on the phone today and they said that all I can do is apply for interest relief, principal deferment, or extended amortization (all of which are described here) and that there are absolutely no appeals available.

I'm totally at a loss as to what to do. I offered to just pay off the $260 from 10 years ago but that won't do anything, apparently. I really can't afford to start paying my student loans back right now being, still, a poor graduate student. I don't know what my options are beyond those three things above. Can anyone offer any advice (and I fully recognize that you are not my lawyer, accountant, banker, financial advisor, or anything similar).

Will My Dept Sink Me With A Prospective Employer?

Anonymous — Tue, 24 Nov 2009 08:46:00 -0800

Will a prospective employer not hire me when they find out I'm repaying money to the IRS? I'm in the running for a job I very much want, and in the course of my research on the company discovered that they run routine credit and background checks on prospective employees.

I have minimal outstanding credit card debt and no collection agency reports on outstanding bills. My concern is this: although I've filed my taxes every year, due to a drop in my income, I didn't have enough money to pay what I owed for tax year 2008.

Since I'm currently a freelancer, it was a substantial amount ($4000). I worked out a payment plan with the IRS immediately, and the debt is being deducted bit by bit from my bank account every month, but I assume that it will show up on a credit check.

However, I don't want to give any reason for my prospective employers to not hire me. Would this give them pause? Should I try to find a way to clear the debt immediately, say, by asking a family member for a loan to pay the IRS?

I also would appreciate any information on when these checks are usually conducted. For example, are they conducted during the interview process, or after they make a tentative offer subject to the results of these checks? I haven't signed any authorizations to make these checks, but I'm not sure if they need my permission to do them.

Thanks for your help.

Should I pay off one debt with another?

ThaBombShelterSmith — Tue, 27 Oct 2009 12:54:25 -0800

StudentLoanFilter: Should I use my student loan money to pay off my last credit card? long-ish explanation of my situation inside. I'm going back to school in January (for a teaching cert after already receiving a bachelor's degree) and I've qualified for more loans than my tuition. I know I'll need some money to cover textbooks and other school supplies, but I'll still have about 5-6K left over (if I take it).

A little background: I had been working through a debt snowball when I was making about twice as much as I am now, and managed to pay off 4 of my 5 cards, leaving me with my highest balance card left. It's currently at a balance of ~5K at an interest rate of 19.99%. My minimum payment is around 150/mo.

I'm now netting about 14K a year working full time and this 150/mo is really starting to take a toll.

As far as other debt is concerned, I have 13K in federal subsidized loans locked in at a rate of about 4% from my bachelor's degree that I have a deferment for, which will be active until I'm done with my teaching certificate. I'll probably have between 33K and 38K in loans by the time I get my certificate (which should be doable based on the "don't take out more than you expect to make in the first year of work" advice). I also have an 8K auto loan at 7%, which is about 200/mo.

My financial aid award is for 5500 in federal subsidized loan at 5% and 6100 in federal unsubsidized loan at 6.8%. From what the financial aid office told me, as a returning student, I'll qualify for enough subsidized loans to pay for tuition each semester, so I will only be accepting this extra 6100 once and then I'll decline it each semester after this one.

Is this a stupid thing to do? Is it allowed? Does anyone care? The way I figure, I'm basically swapping a 5K balance at 20% for a 5K loan at 6.8%. I know I'll accrue interest in the next two years while I'm in school, but I'm guessing the extra $150 dollars I'll have each month will more than make up for it. (I might actually be able to save again!)

Any help or advice would be greatly appreciated.

Best way to pay debt collectors?

Loto — Thu, 15 Oct 2009 17:41:58 -0800

Now that I am able, I would like to pay the debts I have accrued over the past few years. When confronted with debt collectors, what is the best way to deal with them so that this positively impacts my credit report? Young and dumb, I didn't pay a number of bills that I should have when I was in school and just after I graduated. I would like to pay these off now. It isn't a huge sum of money, in total, but it is a black mark on my credit report. I've paid the original creditors when I've could but I have a number of debt collection agencies calling me about other debts. These are legitimate debts so I am not worried about that but with the horror stories I've heard about collection agencies I want to make sure that I do this right. It doesn't help that I have been ignoring the problem for a long time; in most cases I have never even spoken to these agencies.

When trying to pay a debt through a collection agency, how should I proceed? Should I request a bill in writing and then cut a check? Pay over the phone with a credit card? How do I ensure that the debts are marked as "paid" in my credit report?

Being Sued by a Debt Collection Firm

WRivera125 — Thu, 15 Oct 2009 10:10:22 -0800

I have gotten two collection letters from law firms, one of which I found out is suing me. I am with a debt settlement firm and I would like to settle but they will not talk with my debt settlement firm. What are my options? I do not want to go to court and would like to settle these debts. One is for $9K and another for $1.7K

I'm in huge debt and have no idea what to do with my life.

alternateuniverse — Mon, 05 Oct 2009 06:13:50 -0800

Just graduated from a top business school in the United States (H/S/W/K/M, etc.). I am $130k in debt, with payments of $1200 per month staring at me from 6 months away. I'm still not sure what I want to do with my life. Help! I was an entrepreneur, then went to business school because I wasn't sure what I wanted to do next but thought the credential would be helpful. I hated b-school, but kept at it. Now I'm in crazy debt, and not sure what I want to do. I HATE corporate environments. I love:

- small collegial companies
- startups
- the idea of finance, but not the culture
- microfinance
- hippie, do-gooder stuff
- international travel
- product design
- writing
- product management is okay
- liberal cities (Portland, Seattle, SF, Boston, Amsterdam, London, etc.)

My b-school has a a loan forgiveness program if I choose to work at a nonprofit. They'll pay the minimum on my loans, so in TEN years (!) I'll be free.

My resume: short stints at a consulting firm, an investment bank, and a technology company, some entrepreneurial stuff. Used to work as a model/entertainer. Also, some paid photography gigs. I didn't like consulting or finance: too corporate, too hierarchical. The technology company was okay.

I'm in my mid- to late-30s. Single. Female. Wanting to find a partner and have a family, so no desire to work at a 80-100/hour week job to pay off my debts quickly. Would love to live and work internationally. I was born abroad and have EU/US citizenship.

Prone to depression and anxiety and on meds. Don't like high stress environments, but smart enough to fake it a lot of the time and have things turn out okay.

I feel so stupid for putting myself into this situation. This may be the worst mistake of my life. What should I do?

Help me figure out what to do with my life!

Protection in a weakening economy

CollectiveMind — Mon, 05 Oct 2009 05:16:04 -0800

Our deficit and our debt are at record levels, even compared to WWII. Then, the debt was financed internally, not by other countries, so the interest we could pay was lower and the money was recycled in the U.S. Now, the debt and deficit are mostly financed by other countries through bond offerings and the like. And as they grow, those debtor countries will want higher interest rates on repayments, which drains money out of the U.S. Does anyone know of, or can anyone suggest a position to take in-case our national financial fortunes deteriorate slowly? A crash, understandably, wouldn't offer much safety for anyone except the very rich. And I'd expect social unrest would threaten even them at that point. But in general and for the average investor, are there any suggestions for investment or money/asset movement strategies that can protect one in an economy with (a) increasing foreign debt payments in the short term, (b) potential significant interest rate increases in the medium term and (c) lessened national economic influence on the international currency markets in the long term? I just can't seem to find any financial wonk willing to speak plainly on this.

Private Student Loans

rossination — Wed, 30 Sep 2009 13:35:30 -0800

Help me figure out my options for a small (~$4000) student loan. First of all -- forgive my noobish questions here. I am new to student loans and this whole process is getting overwhelming. I can't find previous AskMe questions that are particularly relevant, but if there are other pages that will answer my questions, feel free to direct me there.

I'm in my fifth (and final) year of my undergrad degree and have to take out some loans to cover part of my last year. I need about $7000 and I qualified for (and received) $3500 of subsidized Stafford loans, leaving me with another $3500 that I'll need to acquire through a private source.

What are my options for the private loan? I assume that I should be looking at credit unions first. The first one I visited today (WSECU) doesn't offer student loans, and BECU directed me to their online application, which says I'm ineligible for a loan unless I co-sign with my parents, as I make less than $3000 a month.

While I don't have a big problem having my parents co-sign a loan, I would much rather do this without them if possible, for practical and personal reasons. I have a pretty good credit score in the low 700s (no credit cards, one $4000 car loan that is almost completely paid off, always made payments on time, etc).

What this boils down to is: am I likely to run into the same restriction that BECU placed on me if I go to other credit unions? My gut tells me to avoid large banks, but should I be looking at Chase (my main bank) or other large institutions? What about Fannie Mae or other companies that specialize in loans like this?

How do I collect a divorce judgment?

littlegreenboat — Wed, 23 Sep 2009 11:46:30 -0800

I would love any input you might have, even though you are not my lawyer. Four years ago my husband moved out and left me with his unpaid medical bills. Since the debt was incurred while we were married and living together, we were legally considered co-debtors. He told me had worked out a payment plan and I didn't find out otherwise until we were separated and subsequently sued. I was able to settle this debt, but my savings was wiped out (while we were married we had a his, hers, and ours system of money management). As part of the divorce settlement I was granted a judgment totaling $5000 + 10% annual simple interest. He signed off on this and didn't contest the amount. Fast forward to today and he hasn't made any attempts to pay off the judgment. But then again, I haven't made any attempts to collect. I've decided to give it a shot, not just for the money itself, but also because I believe that there is a larger issue of fairness at stake. The problem is, I have no idea how to go about collecting this debt.

For the most part my ex tends to go all ostrichy when unpleasant things arise - he's an amiable and likeable fellow, but avoidant as hell (see above). Maybe he's changed, maybe not. Because the ex that I knew is most likely to ignore a demand letter from me, I would rather not send one without credible and actionable recourse if he does not respond. In short, I won't bluff.

A few facts: I live in Oregon (where the divorce occurred) and ex now lives in Maryland. I am fairly certain he has no real property. I don't know if ex is remarried or not. I am about 85% certain that I have his present address. I have the name of one of his employers, but I doubt that it's current. I think it's safe to assume that he has a job. I have the all the vital stats a (former) spouse would have - previous addresses, SSN, DOB etc.

I've looked into enforcing this judgment myself but the different-sides-of-the-country issue makes it complicated. As one can imagine, trying to do things like proper service/notice, wage garnishments, or transfer of foreign (out of state) judgment from 3000 miles away without representation is damn tricky. I've talked to a few attorneys and their rates tend to be higher than what I can afford to lose if I come up empty handed. I haven't found an lawyer that will take this case on contingency and the few collection agencies I've looked at only buy debts from business, but my search for either certainly hasn't been exhaustive.

And advice would be greatly appreciated!

How to manage my debt and life as a whole

thegreatcokeolympics — Sat, 19 Sep 2009 12:34:41 -0800

How do I get my life on track with high debt and a chronic medical condition? So i'm 26 years old and have been completely on my own since i was 18. I come from a working class family who lives in a small dying town with no jobs. I knew if I was going to make something of my life in any way, I had to get out of there. Being so young and inexperienced, it's not like I could get a well paying job to support myself. And it's not like my family had any money to give me.
So 5 years ago, I took out many many loans and used that money to move myself across the country to " the big (and expensive) city" to attend college and hopefully start a new life there.

I also used the student loan money to pay for everything I would need to live on (mainly rent because the dorms were more expensive than studio apts, food, and school supplies) and even then it still wasn't enough, so I also worked full time in addition to going to school full time, just to make ends meet.

On top of this, to make matters more complicated, I also have a chronic medical condition. I have had it mildly since I was 10, but never had it addressed, or even diagnosed as to what it was, since my family lacked health insurance.

It was still fairly mild even when I moved here, but through the years got much more serious and I am now in constant daily pain and have some serious breathing issues. I tried to get health insurance on my own, but no plan would cover me due to the pre-existing condition. So I had no choice but to pay out of pocket for all medical expenses. Of course I had no out of pocket money to spare, so I used credit cards to pay all my medical bills.

And I never had enough credit to pay for anything medical that would truly diagnose me, so I resorted to many expensive pain management treatments only to be left with my condition progressively getting worse.

Now flash to present day, 5 years later, and I am $60,000 in debt from school, $10,000 from credit card debt. The job market is scarce and no one is hiring on staff. I've been taking very low pay freelance gigs which don't even amount to half of my expenses.

Currently, my bare minimum expenses amount to $1150 per month.

One of them being a health plan I pay 400 a month for after puting myself on a long waiting list for a government health plan that teams with private insurers to give coverage to high risk people. With this plan I was also able to finally get the tests I needed to diagnose me, only to discover (upon confirmation of 6 different doctor opinions to be sure) that I need a surgery that will cost a minimum of $30,000 depending on where I get it done, while knowing full well my insurance plan will most likely not cover because it is not a common surgery, though results are typically favorable.

I also pay 400 a month to see a physical therapist who I have been seeing for a year and a half and is the only source of pain relief I have found to help me (Insurance only covers 25% of 12 sessions a year, which I have already maxed out) Then pay 300 a month for my credit cards and 50 for my cell phone. And every 3 months, pay 150 forbearance fee for my student loans. That is it.

I had to leave my apartment and move in with a friend who is letting me stay there rent free until I figure something out. They are also fortunate enough to make a decent living and have been loaning me money to help pay my bills, eat their food, and use their computer. If anything, they've almost become my surrogate parent and it makes me feel like shit for puting them in that position, but I simply don't know what else to do.

I would get a second job anywhere I could find, but not only have those jobs even been hard to come by, but my health simply won't allow it at this point. I am extremely distressed, depressed, and hopeless. The biggest issues of all is the health and everything else seems to stem from it to make all the other problems worse. I don't know how much more bare minimum I can get in terms of cutting my budget when I'm already miserable and in so much pain.

I have considered going on disability, but I don't know if I would count since I still have been able to work, so long as the work isn't strenuous and I don't have to be on my feet all day.

I've considered welfare and bankruptcy but I'm not too sure how they work or if I would have to give up making enough money to pay for everything I need just to qualify. Or if bankruptcy will just ruin my credit enough to never be able to rent again.

I want to be responsible and make the best choice that will benefit me in the long run, but I don't know what that is or where to go. I really need some advice or clarity on this, so anything anyone has to say, please I'd love to hear it. Thank you.

Use cash to start a business or for a down payment on a home.

mintchip — Tue, 01 Sep 2009 18:40:50 -0800

Use cash to start a business or for a down payment on a home. I have been interested in having my own business. I have read business magazines for years and have even had a couple of small service-based businesses that I ran part time. No big bucks there but a rewarding experience.

Recently I've been considering trying to start a business for real. I have a small sum of cash (between 10-20k) I've been slowly saving for a home down payment.

It's a tough choice. Since I need a home to live in, buying one would mean an investment in my future and security. However, chances are that I won't get rich working for a private company. In fact, it's quite hard to get ahead nowadays with most of the good middle management positions gone. Meanwhile, most of the people I've known who did quite well for themselves did it by owning their own business.

I'm not saying it's easy. I'm just thinking that owning a business seems like my best shot at getting ahead, and it also happens to be a genuine interest of mine. At the same time, starting a business is a huge risk (I think it's something like 4 out of 5 fail within 5 years) and I could lose the money as well as a lot of time and energy.

I believe I have many of the qualities that would contribute to success in business. But it's hard for me to know if I have all of them.

What's your take? How have those of you who have been in a similar position weighed the pros and cons of such a decision.

Drop and give me 36 (months of consecutive on-time payments)

Anonymous — Wed, 12 Aug 2009 19:01:46 -0800

I'm looking for a financial coach, someone who can help me develop better financial habits. Does such a thing exist? I'm irresponsible with money. I forget to pay my bills, and end up paying them late so that I have late fees and the late payments go on my credit report. Or I just ignore them for a few months, until they get big enough that they're difficult to pay off. I set up budgets and then ignore them. I am cheap as hell with big stuff, and then blow my budget on stupid small things like eating lunch out every day. It's stupid and sort of embarrassing and I want to mend my ways.

I realized that what I need is someone who will look at all my regular bills, as well as my income, and help me set up payment plans and a budget, and then help me stick to it. Kind of like a personal trainer, but for money instead of fitness.

I'm not necessarily looking for a blog or a book that will help me do this. I've already read a bunch of books and blogs (Suze Orman is great) and I always come away with all sorts of good intentions, and then do nothing. I need someone who will help me develop a plan, and then hold me accountable to that plan for a few months while I get it going.

Ideally I would like to see someone locally (I'm in Seattle), in person, because it seems like that would be more effective and secure. I'd really rather not give all my financial info to a stranger on the internet.

I know about the credit counseling services, but it sounds like many of those are scams and even if they aren't, seeing one can adversely affect your credit rating (ah, irony). Internet searches result in a lot of these types of outfits. And it seems like financial planners are more for managing your investments.

How to get rid of credit card debt?

bluehermit — Tue, 04 Aug 2009 16:06:26 -0800

Credit Card debt for teh first time in my life, I'm lost as to what my options are. I have literally no one I can talk to about this and I feel like doors are being slammed in my face when I'm asking for help.

I just graduated in the spring with an Education degree and had virtually no money at the end of the semester. I had to move back to my city (better job opportunities) and some emergency expenses as well as bills starting to pile up. For the first time in my life I racked up my credit card because of that and struggled to pay it off, I'm at about $5400.00 on my credit card. I'm looking for a teaching job right now and in the meantime working at a golf course and tutoring in the side any spare moment I can get in.

I'm almost at my limit and am freaking out because I am living paycheck to paycheck. I have been not approved for balance card transfers from other companies or lines of credit, all say I have too much debt and don't make enough money right now. My last resort was my bank to do a consolidated loan and they submitted the application and I found out today I've been declined :( Same thing, I make too little money for a loan. They refuse to lower the interest on my CC and basically said I have no options....I have no idea what to do, I've had an account there since I was 7 and this this the first time I've ever had problems with debt.

I cut as much as I can for expenses, I have no cable, no land line, never eat out, walk instead of taking my car (unless I have no choice) etc. I've always been good about paying off my card, just times have been very rough for me right now. I feel like I've dug a hole that keeps getting deeper.

I'm so angry, frustrated and sad, I don't know what to do :( I'm bawling here... Any advice or ideas? (I'm in Canada if that makes a difference)

Help me handle my finances during my last month in apartment

lblair — Mon, 03 Aug 2009 10:01:10 -0800

Can I persuade my landlord to let me use my security deposit for my last month's rent? If not, what's my next best option? ( I'm dealing with paying my credit card bills too.) My lease is up on 8/31 and I'm broke. (I'm moving home with my parents to save money.) I have about $1000. That's about how much my rent is. My security deposit was a month and a half's rent. My apartment is in good condition, and with the exception of being a few days late with the rent a couple times, I think I've been a pretty good renter. (Lived here 2 years.)

My problem is that I am also behind on a bunch of (small) credit card bills. Also about $1000 worth of needs-to-be-paid-asap type stuff. So, right now I can either pay my rent and wait and pay the credit cards over the next 1-2 months. (I have a crappy p/t job and I'm trying to find a better one, but til then . . . ) Or, I can try to convince my landlord to let me use the deposit, and put my $1000 towards my credit cards. (I know, I know, being in credit card debt is a whole other story, but I'm moving home so I can work and save money and pay them off.)

I think it would be better for me to pay the credit cards and try to negotiate about my rent, simply because the cards will ruin my credit a lot more if I'm late on them. If I'm lucky my landlord will agree to taking my deposit for August rent. If he won't, and I just don't pay it, I'm afraid of legal action or ruining my rental history.

I tried to google for the answer and the impression I got was that using the deposit for last month's rent is generally something that you can't do, but people try to do it anyway- sometimes by talking to their landlord, and sometimes by simply not paying the last month's rent. (I live in IL, if that matters.)

So my question is- what is the best way to persuade my landlord to let me do this? If he says no, then what? How bad are those 'over-30-day' hits on your credit report? (I'm not about to be sent to collections, but I think I have gone over/will soon go over 30 days on some of them.)

Credit card charge off: pay in full or accept settlement?

Nickel — Mon, 03 Aug 2009 00:11:15 -0800

Credit card charge off: pay in full or accept settlement offer? My 23 year old sister racked up some credit card debt during a low point in her life a few years ago and is now looking to tackle it and get her credit back on track. I am in a position where I can help her financially and would like to help her make the best decisions.

All of her credit card debt (~$7000) is charged off and sold to debt collection agencies. The agencies are offering settlement deals for a little less than 50% of the original amount owed.

1. I'm assuming that "charged off - paid in full" looks better than "charged off - paid a settlement" on a credit report. Is that right? Is it a significant difference or should we save the money?

2. How would these options actually be listed on her credit report?

3. If she does settle, can she ask that they remove the information from her credit report as a condition of settling?

4. If she pays in full, can she have the charge off removed from her credit report?

5. If I add her as an authorized user to some of my credit cards, will it raise her credit score? Will it lower mine?

NB. She talked to a credit counselor about a year ago, but couldn't afford the minimum due so they couldn't work with her. If you can personally recommend any counselors in the SF Bay area, I would appreciate it.

Can debt collectors not disclose their identity when calling to harass relatives of a debtor?

ishotjr — Fri, 17 Jul 2009 12:24:01 -0800

Do debt collection agencies have to identify themselves as such when calling relatives of the debtor? I got a call today from a debt collection agency who was looking for a close relative who is on the same cell phone plan with me. Let's say my relative's name is Don Smith. The debt collector started by asking if I was Don Smith, and I told them that I am not. They asked if I know Don Smith. I asked them who they're with, and they said NCO, which sounded like a debt collection agency to me. I said, "if you are a debt collector, don't you need to inform me as such before asking for such information?" They said, "Are you a lawyer? You need to get current on your laws." I told them that it's none of their business if I know that person. They asked again and I said no, which is not true. They then proceeded to be a huge jerk to me when I told them not to call me anymore.
I looked it up, and according to the internet, a debt collector can call just once to ask the whereabouts of a relative. Am I legally required to tell them the truth? They should know my relative's whereabouts as they have had the same phone number and address for over 20 years and aren't exactly in hiding.

I plan on complaining to the company no matter what since the debt collector was exceedingly rude, but I'd like to know whether they have to disclose their identity before asking whether I know the debtor so I can add that to my complaint.

I'm sorry, you are denied!

Anonymous — Mon, 13 Jul 2009 15:45:34 -0800

Will my credit ever recover? I was trying to do better.. got a job, paid on time.. But I got rejected for a credit line increase today. Mind you, my current limit is already only $300! About 5 years ago, when I was a freshman in college I neglected bills and wrote a some bad checks. Awful. I know. About three of these accounts totaling $5k went to collections. I paid about half for a year and then stopped because I was out of work. Today the debt hovers around $3k. I still don't pay these debts.

Despite this I was able to open a checking/savings account with a major bank and was able to get a secured visa w/ a limit of $300 though them in 2006. After a year of good payment history, they refunded my $300 and turned my secured card to an unsecured one. I thought that this was a good sign. I've been using it for little purchases and paying it off every month without a single late payment since 2006. I have an OK job now, but need to return to school soon and will probably need to get loans. Which is why I am worried about my history,

True, I should have paid down those debts ASAP but I went through some personal turmoil for some years and haven't really gotten back on my feet (completely stopped spending, got a steady job, found affordable housing, stopped relying on others for $, and established a real emergency fund) until about a year ago.

What do I do? I really can't ignore the past debts can I? One of my friends suggested just leaving it be since I'm so close to the statute of limitations on them. But that isn't true, is it? Debt doesn't just fall off your report if you hide long enough?! I imagine a lot of dishonest people (like me, I guess) would do this just to avoid bills.

Now that I can help myself a little more, what do I do? If I were to start paying them back today, what would it show on my credit report? Won't it still say that there are collections on them? My current score is a measly 520. How long does it take for my score to reflect repayments? Is it removed when I pay in full or when I start payment?

I feel DEEPLY EMBARRASSED and ASHAMED of this. As I should, but I want to fix things. Can you offer any advice?

By the way, I wasn't trying to up my limit to go on a spending spree. Just trying to up my limit so that I can pay the deposit to rent a truck and move.

Risk-aversion shows I'm qualified, right?

Anonymous — Mon, 13 Jul 2009 11:59:57 -0800

Should I take out a full load of student loans to attend a top-6 law school right now? I just got accepted off the waitlist at the last minute. This is not a "should I go to law school?" question; I'm already excited and fully committed.

The question, rather, is how much risk should I take financially in this economy? I was not offered a grant or scholarship (and might have a better chance at being considered for one next year if I apply very early - I put my applications in very near the deadline instead of in the fall). I currently have a job that pays well enough to put some savings away by next year, let's say at least enough to cover living expenses over all 3 years, and hope to come up with some opportunities to enhance my income given the extra time. I also have some personal projects I could finish up and be satisfied overall with spending another year this way before embarking on a long-term, non-interruptible career path like law. Until this waitlist acceptance, I was perfectly content with reapplying next year.

I am passionate about becoming a lawyer but terrified of becoming a debt slave. I can't seriously consider the possibility of committing to a loan payment plan that lasts longer than 5 years; right now, my 5-year payment plan would be $4,000 monthly starting 6 months after graduation.

On the other hand, schools like Columbia, NYU and Chicago are extremely competitive. As I was waitlisted at all 3 this year, I may not be able to count on getting in next year and they don't give deferrals to waitlisted admittees. After applying to other schools, I am certain that these are the only ones I would seriously consider attending, especially on student loans. I think I might be game for big law, but my freedom to choose is more valuable to me than anything, and I don't want to be stuck with it if I genuinely hate it.

Biglaw isn't even hiring right now, and I certainly don't want to place a $200k bet that they will be by 2012. My loans and interest rates are a certainty; the economy and the effects the recession will have on the legal industry and my ability to thrive or survive as a member of it in the near future are anything but certain. If it becomes clear over the next 12 months that student loans this large would be a death sentence for anyone, I could come up with a plan B and be glad to have escaped such a fate, even if being a lawyer remains my first career choice.

So I could be making the biggest financial mistake of my life (there are suddenly no guarantees of summer associateships and huge starting salaries for anyone at any law school?!) - or throwing away the biggest opportunity of my life (admissions are likely to get even more competitive next year, although I do have competitive numbers and would like to chalk up having been waitlisted to having applied quite late and scoring a 6-point increase on the February LSAT after applying with a lower score from December). If I pass up an opportunity to go to my dream school that might not materialize again next year, I'll always regret it; if I find that my life is essentially over after graduation due to crushing debt obligations, I will probably lose the will to go on after a couple years. Which way to go?

What's my best road out of debt

letstrythis — Sat, 04 Jul 2009 20:22:37 -0800

I am in debt to the tune of about 20,000 in credit card debt. However, I have great credit, (739) which I've finally cleaned up after a horrible year of ID theft. Most of my debt is on one credit card at 12% APR. I make about 35,000 a year, rent, and don't have any equity or a car. At the rate I can afford to pay at this point (450/month) I'll be in debt for about 8 more years. This seems unreasonable. Should I take out a personal loan, sign up for several low APR credit cards that offer no interest for a year, etc... I live off what I make at this point, and look forward to a credit card-free future. Thanks!

How can I get an emergency loan to pay the rent?

Anonymous — Thu, 25 Jun 2009 10:13:24 -0800

How can I get an emergency loan to pay the rent? About a year ago I quit a job to start a business. The business was a website and I correctly assumed that once it was built it would require very little effort to maintain. I figured I was a couple years away from it becoming particularly popular and planned on getting a job (even temping) after it was completed. I had enough money have to be out of work for about nine months after my project was completed. In the first three months I searched for a job and it was pretty hopeless. I got depressed and more or less gave up for a couple months. I, more or less, snapped out of it eventually and have been looking for a job, any job since my needs aren't that great. I just haven't been able to get anything together so far. I don't have any credit cards or any debt. My expenses are low probably just a thousand dollars a month so I don't need a lot and am willing to pay sort of usurious rates if I need to. Calling on friends and family is not an option. What sort of options do I have?