http://www.destroydebt.com/blogs/janna.html Janna's Blog www.destroydebt.com Mon, 19 Nov 2007 09:19:06 GMT webmaster@destroydebt.com webmaster@destroydebt.com http://www.destroydebt.com/blogs/janna/9-college-cost-reduction-act-helps-indebted-students.html http://www.destroydebt.com/blogs/janna/9-college-cost-reduction-act-helps-indebted-students.html Mon, 19 Nov 2007 09:19:06 GMT The facts are kind of depressing: of all the four year college graduates in America, nearly two thirds have student loan debt to repay after graduation. The average amount of student loan debt for these graduates is $20,000. Medical and other graduate-level students can owe much more by the time the...
So what does this mean for these young people’s futures? Some take jobs that pay higher wages, even if the job is not a good fit for them. Others work more than one job to make ends meet. Still others have to put off their dreams, such as home ownership, until their debt load is lightened. Those who can’t repay their student loans face bad credit and the garnishment of income tax returns.

Of all the indebted students, the worst of the worst come from New Jersey’s Seton Hall University, where 61% of students owe an average of $37,000. At the other end of the scale is Princeton University, where 26% of graduates owe about $5,000 each.

But there is hope for students everywhere: the federal College Cost Reduction Act will cut interest rates on student loans in half, will place a cap on how much of a graduate’s income can be devoted to federal loan repayment, and will increase the number of grants given to low-income students. Compared to multiple jobs and mounting stress levels, doesn’t a little debt relief sound nice?]]> http://www.destroydebt.com/blogs/janna/8-doctors-defense-contractors-cheated-on-their-taxes.html http://www.destroydebt.com/blogs/janna/8-doctors-defense-contractors-cheated-on-their-taxes.html Mon, 19 Nov 2007 08:58:49 GMT In a truly embarrassing debacle, the Government Accountability Office released its official findings regarding persons who both cheat on their taxes and do business with the government. In particular, the November 14th report shined the spotlight on more than 30,000 Medicaid providers who didn’t pay...
Even more disturbing were findings that the worst violators lived extremely lavish lifestyles, and had abused patients or violated other health care policies. Some even decorated their mansions with chandeliers and fine furnishings while their clinics and nursing homes verged on neglect.

The tax-evading Medicaid providers were spread over seven states, from New York to Texas, Florida to California. The Government Accountability Office found that 5% of Medicaid providers in those states had cheated on their taxes. Also guilty were defense contractors, who owe about $78 million in taxes.

Of course, these health care professionals and contractors are only responsible for a tiny part of the $400 billion or so that has gone uncollected each year since 2003. Where are the inspectors when you need them? It’s been suggested that the president has them on a short leash; but that’s another story entirely.]]> http://www.destroydebt.com/blogs/janna/7-are-subprime-mortgages-hurting-the-automotive-industry.html http://www.destroydebt.com/blogs/janna/7-are-subprime-mortgages-hurting-the-automotive-industry.html Mon, 19 Nov 2007 08:31:06 GMT It seems that the declining housing market is taking the blame for more than just foreclosures. It has been projected that as many as 2.3 million sub prime mortgages will switch to higher interest rates by the end of next year. That’s bad news for home buyers who will face higher monthly payments as...
Wait, what? It’s true: financial analysts have predicted that the increase in mortgage payments will leave less liquidity for the purchase of cars. The numbers seem to bear this out; Ford Motor Credit Co. and GMAC Financial Services had more delinquencies during September and October than they have had in recent years. Another concern is that, as home buyers take hits to their credit scores from delinquencies, foreclosures and bankruptcies, fewer buyers will be approved for car loans. Fewer approvals mean fewer sales and less money for the car companies.

The auto giants aren’t worried – yet. Representatives of both auto companies maintain that higher delinquency rates are normal for the third quarter.

Sadly, it’s impossible to predict how the housing market crash will affect everyone’s daily lives. Analysts claim that it will definitely affect the automotive industry. But how much is anyone’s guess at this point.]]> http://www.destroydebt.com/blogs/janna/6-do-you-know-your-credit-score.html http://www.destroydebt.com/blogs/janna/6-do-you-know-your-credit-score.html Mon, 19 Nov 2007 07:26:19 GMT If you don't, you’re not alone. It’s strange how we know our height, weight, date of birth, and other vital statistics, yet so many of us don’t know the number that defines our place in the financial world. Borrowing money is a fact of life. Few of us have enough liquid assets to go and purchase ho...
Borrowing money is a fact of life. Few of us have enough liquid assets to go and purchase homes and cars outright, not to mention education and other hefty expenses. If you have a low credit score, you’re not only at risk of being denied loans and credit cards, you’re also at risk of being turned down for jobs or housing. Members of the military can’t get top security clearance levels with poor credit. Even if borrowers with low credit manage to get approval for loans, they face exorbitantly high interest rates. When lenders see low credit scores, they assume they’re taking a risk by lending to a sub-prime borrower. They will make up their potential losses through interest.

What is low credit? Scores of 699 and below are considered sub-prime. Scores of 700 to 850 are the highest and most desirable. They will get the best interest rates. The difference is in the details, and what a difference those digits make! A home buyer with a credit score of 699 will pay, on average, $277 more each month than a home buyer with prime credit, according to FICO - a financial model from the Experian credit bureau. How much more gets wasted on sub-prime credit card and loan interest?

To find out your credit score, contact Experian, TransUnion and Equifax. Be sure to request your credit history and your credit score. Then pay off your delinquent balances and dispute any mistakes you find. All this will cost money, but think of it as an investment in your financial future.]]> http://www.destroydebt.com/blogs/janna/5-which-debt-consolidation-solution-is-right-for-you.html http://www.destroydebt.com/blogs/janna/5-which-debt-consolidation-solution-is-right-for-you.html Mon, 19 Nov 2007 07:08:02 GMT Debt consolidation sounds easy: lump all of your monthly debt into one outgoing payment to reduce the amount you spend on interest each month. This can be a life saver for some. A family with unpaid medical bills, a mortgage, a couple of car payments, and a few credit cards can soon find that they’r...
But which consolidation option is best? That depends on the severity of your situation.

If you can pay off your debt in a year or less, 0% interest credit cards would be a good consolidation choice. The debt you owe on high-interest cards is transferred to a card that charges 0% interest for a specified period of time – typically 6 to 14 months.

If your debt is fairly severe, you might want to visit a credit counseling center to get enrolled in a debt management plan, or DMP. For the duration of a DMP, you make a single monthly payment to the credit counseling organization, which then pays your bills. Be choosy when selecting a credit counselor; participating in a DMP can hurt your credit score, and you might not be allowed to use your credit or apply for new credit for the program’s duration.

Debt can also be consolidated by borrowing against home equity, retirement, or life insurance policies. This isn’t advisable except as a last resort. If you fail to repay the new loan, you could lose your home or benefits. Speak with your bank or credit union about a low-interest consolidation loan before putting any hard-earned assets at risk.]]> http://www.destroydebt.com/blogs/janna/4-dont-rush-into-bankruptcy-without-knowing-your-options.html http://www.destroydebt.com/blogs/janna/4-dont-rush-into-bankruptcy-without-knowing-your-options.html Mon, 19 Nov 2007 06:57:20 GMT The sub-prime mortgage crisis and the ensuing interest hikes and foreclosures have left scores of people facing bankruptcy. Even home builders are feeling the squeeze: in early November, three of the nation’s four largest home builders received downgraded credit ratings of “non-investment” or “junk”...
Still, sympathy generally lies with the families who got suckered into the American Dream of owning a home, whether or not they could ultimately afford it. Many of these families have considered bankruptcy in order to stave off foreclosure, but such a move would probably just delay the inevitable. Homes are only safe from foreclosure if a homestead exemption prevents the lender from selling the property. Another tactic is to file for Chapter 13 bankruptcy, which provides a repayment plan (typically 3-4 years in length) that continues regular monthly payments and brings past due payments up to date during the same period. Refinancing might also be an option, with arrearages rolled into a new loan. A quick meeting with a financial planner or attorney can't hurt, and will almost definitely give you valuable information.

Anyone considering bankruptcy should be aware of the scams that have proliferated since the housing crisis began. It’s not recommended to transfer all or part of your title to a third party for any reason. Courts have caught on to this trick. Homeowners who fall for such scams usually end up paying large sums of money to the scammer, but lose their home anyway. If your home is in danger of foreclosure, check out some of the legitimate alternatives before you do anything drastic.]]>