Tackling Your Student Loan Debt

student loan debtOne of the worst graduation gifts we receive following graduation is our student loan debt. This will come within 6 months after graduation and will catch you off guard if you’re not prepared.

College is a lot of work and it’s difficult to not want to relax when it’s all over. But quickly following graduation, you’ll want to establish responsible financial habits and find your first “big kid job”.

When it comes to your student loan payments, graduates should be proactive. The first step, of course, is finding a stable source of income. The economy is turning around and allowing companies to offer more hiring opportunities. While it’s still not a time to be picky, you need to have a job that will allow you to pay off debts without accruing more.

Job searching is a full time job in itself and it’s important to put in a lot of effort. Your first job will likely not be your dream job; it’s common for graduates to change jobs 2-4 times before finding a long term career to settle into.


So once you’ve landed your first job out of school, we recommend the following debt strategies:

Gain Knowledge- Although it’s not going to be fun, you need to know your total debt amount. By having this number in your head, you’ll know what it’s going to take to pay it back. This is also going to allow you to formulate a plan.

Begin Strategizing- It is important that you budget your finances to ensure your dedication to paying back your student loans. Avoid using a credit card to pay other debts and expenses during this time because this could lead to high debt balances.

Start Saving- It’s certainly exciting to begin receiving paychecks and real income. Now is the time to save and do the spending you’ve been wanting to. Take advantage of the grace period that follows graduation and do the spending you need to. Just be careful and fully aware that these loan payments are just around the corner.

Graduating college is a very exciting time and you should celebrate this big accomplishment. We wish you luck in your job search and encourage consistent financial wisdom in paying off your student loan debt.

Three Things You Might Not Know About Bankruptcy

In 2011 there were over almost a million and an half personal bankruptcies, 70 percent of which were Chapter 7, according to the American Bankruptcy Institute. And while this number is less then the number filed in 2010 it’s still a major factor in the American economy.

But here’s what you might not know about bankruptcy:

  1. Most people file for bankruptcy for one or more of three reasons, none of which was the result of irresponsible behavior: Medical expenses, job loss and divorce. As of April of 2012 more than five million Americans had been unemployed for more than six months. Twenty percent of American families were faced with medical bills they couldn’t pay, and maintaining double households after a divorce is hard even in a good economy.


  2. Bankruptcy doesn’t mean you’ll never get credit again. There are a number of ways to rebuild credit after filing bankruptcy. Secured credit cards can help if you pay your bill on time. Continuing to pay your secured debts such as your house or car also help to rebuild credit.  Keeping a very close eye on your credit report can also help you avoid any misunderstandings about just what debt was discharged and what wasn’t.  Your report may also still be showing a negative report for a debt that was discharged in the bankruptcy.  There are a few companies out there that can help inexpensively repair your credit after bankruptcy.  Feel free to contact us for a referral to an honest and cost effective credit repair company.
  3. Bankruptcy doesn’t solve all your debt problems. Child support, alimony,  or some other court ordered payments such as restitution for a crime cannot be eliminated by filing and successfully completing a bankruptcy proceeding. Issues surrounding private student loan obligations are under review.  This is due to the Fairness for Struggling Students Act which seeks to make private student loans dischargeable in bankruptcy.  Student loans are the largest form of consumer debt, topping $1 trillion nationally, but are not currently eligible for discharge in bankruptcy.

Bankruptcy isn’t always the answer.  There are non-bankruptcy options available in many situations.  Seek the best professional advice you can find to educate yourself regarding what options are available. Fletcher, Rohrbaugh and Chahine, LLP can help you make the smart choice, whether it’s working with creditors or filing Chapter 7 or 13 bankruptcy. We’ll be with you every step of the way.

Avoid Credit Card Debt During The Holidays

As the holidays get closer it can be tempting to buy the shiniest and most expensive gifts to make the people around you happy. After all, it’s the season of giving, of family, and spending time with those you love.

But no one ever said ‘tis the season to jack up your credit cards. So take a few minutes to plan your holiday gift attack so you won’t hate the mailbox come January.

Don’t deck the halls with credit card debt.

-Start a holiday fund. Have a few dollars from your paycheck deposited in a savings account set aside just for Christmas. A cash only Christmas avoids credit card interest.

-Make a written list.  Trying to keep the information in your head while also dealing with the rest of the holiday madness is a recipe for failure.

-Set a spending limit and be firm about it. Know exactly what you can afford to prevent surprises when you finally add it all up. And here’s a little piece of info that may influence your decision: credit cards charge interest. Sometimes lots of interest. Multiply whatever your limit is by your interest rate. If you don’t pay off your credit cards each month this is the extra amount that you can tack on. Yikes!

-Make a firm list of everyone you’re buying for and try not to deviate from it. Add potential gift items to each name and surf the web to estimate prices. Since you know your spending limit you can modify the gifts before you even set out.

-Get gift receipts. If anything you buy turns out to be defective, a duplicate, or just the wrong size, you can aid in returns.

-Keep a running total as you shop to make sure you’re sticking to your budget. Taxes can influence your total so you may need to modify a bit.

-And support your local businesses (we are one, after all) and buy a few items from area stores. Money you spend locally stays local. Plus you’ll likely find a unique gift selection for those really special people in your life.

Saving your money, setting a spending limit, carefully selecting gifts, and buying only what you can afford can make the holidays a much more relaxing time. A stressful time is putting all your Christmas debt on your credit cards and paying them off over time. It may seem easy and painless to just swipe that credit card and move on, but this is how consumers get into trouble. This debt will stick around long after the gifts you buy have broken, run out, lost their appeal or no longer fit… and who needs that?

What To Consider Before Filing For Bankruptcy

As the recession continues to take its toll on American debt more and more families are considering bankruptcy. Job losses, rising medical costs that leave more responsibility on the family as well as unexpected expenses can force decisions that no one wants to face.

Before considering filing for bankruptcy sit down and take a thorough look at your debts and your options. Getting a second job even for the short term, selling assets or downsizing to a smaller car may help. Contact your mortgage company and see if a loan modification is possible.

Knowing your options can help with financial difficulties.

Reach out to creditors to see if alternative payment plans can be worked out or if the interest rate on credit cards can be lowered. Credit counselors recommend going into counseling to discuss budgeting and financial planning options before debts grow too large.

The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act has made filing for bankruptcy more complicated and restrictive. The attorneys at Fletcher, Rohrbaugh and Chahine advise planning and gathering all the information needed to fully examine your status and options.

Know what your expenses, income and total debts are. Look at what caused the financial problem and how it can be avoided in the future. This may include drastically reducing your present lifestyle. Be wary of any debt relief programs that make false or unrealistic claims.

Get your free credit report. Make an accurate list of all creditors that you owe. If you leave off any debt you owe simply because you think it’s been written off it may not be covered if you file for bankruptcy resolution and you will still owe the debt.

Consider credit counseling. One of the pre-filing requirements involves getting a certificate of completion of counseling with a government approved counseling agency. This needs to be done within six months of filing for bankruptcy. Credit counseling is generally a good idea even if you may not file to examine your habits and how to avoid repeating mistakes.

The bankruptcy laws have become so complex that experts say consumers should not attempt to file by themselves. If filing for bankruptcy seems to be your only option be sure your attorney has experience with bankruptcy and can advise you on the type of bankruptcy that is appropriate for you.

The bankruptcy attorneys at Fletcher, Rohrbaugh and Chahine can thoroughly advise you on all of your options and we can help you develop a clear and realistic plan to examine and restructure your debt, pay off creditors and weigh all of your options including Chapter 7 or Chapter 13 bankruptcy. If you feel helpless or confused let our attorneys help you find your way back from crushing debt and on to a better financial future.

Chapter 13 Or Chapter 7-Which Is Right For You?

As the recession of 2008 made its way across the country and more and more people encountered financial difficulties the number of personal bankruptcies rose as a result. The numbers are frightening; in 2009 the number of filings rose 32% from 2008 and another 8% in 2010 and experts say it’s not over yet. The larger states such as California had the most filings but the smaller states had the greater percentage increase.

If you're considering bankruptcy consider all options.

If you find yourself out of work or underemployed, faced with unexpected healthcare debt or just can’t manage your financial obligations you may be thinking of bankruptcy as a solution. But there are things to know before you file and consulting an attorney is the first thing you should do. You should also educate yourself on how bankruptcy works as well as the different types, Chapter 13 vs. Chapter 7.

Chapter 13

A chapter 13 bankruptcy is also called a “wage earner’s plan”. It allows someone with a regular income to repay all or part of their debts. A primary benefit of a Chapter 13 Bankruptcy filing is that it can prevent foreclosure of your home or repossession of your car. Filing Chapter 13 allows the debtor to prevent collection action by both secured and unsecured creditors by creating a repayment plan. The duration of the bankruptcy repayment plans range from 36 to 60 months.

This plan allows the debtor to spread out payments to get caught up over time and prevents the debtor from having to come up with large sums of money money immediately. Along with a principle benefit of stopping a home foreclosure or the repossession of other types of secured collateral such as a car, a Chapter 13 Bankruptcy can also help eliminate some or even most of your unsecured debt depending on your debt structure and your ability to pay into a plan.

Chapter 7

The primary benefit of a Chapter 7 bankruptcy is the elimination of most or all your unsecured debt. Unsecured debt is debt that is not secured, or attached, to any property. This includes credit card debt, medical bills, payday loans or other similar obligations. Chapter 7 eliminates all of this debt.

Another benefit of Chapter 7 Bankruptcy is that you can obtain relief from your debts in a shorter period of time. It typically takes three to four months from the date you file your Chapter 7 Bankruptcy case with the court until you receive your discharge. Chapter 7 may be a good idea if you can’t pay your debts and face legal action from creditors.

A Chapter 7 is a viable option if your necessary living expenses exceed your ‘take-home’ income.  If you have some disposable income left at the end of each month, then Chapter 13 may be the best choice.

Both of these bankruptcy options are complicated and require careful consideration before any action is taken. It may also be the most difficult decision of your life.  Most people who face this dilemma are honest, hard-working people who never thought this would happen to them. The attorneys at Fletcher, Rohrbaugh and Chahine understand this and can provide the necessary tools to help you make your decision.  We will represent you to ensure your rights are protected and the best outcome is achieved.

Consumer Credit Growth in the United States

In the last two and a half years, our nations outstanding credit card debt decreased by nearly 200 billion dollars, a drop of about 20%.  This marked decline has caused our credit as consumers to grow conversely with the decline.  Please see the article below for an article on the subject.