Blogs
According to an article in the Wall Street Journal, Money Beat, a new FICO credit score designed by Fair Isaac Corp.FICO +1.65% (FICO XD) is intended for those who have not been able to access financing due to their traditional credit score. This could those new to the credit system, like new graduates. The score will use data from: timely payment of cable, cellphone and utility bills. A full roll-out of this new credit scoring system is expected early in 2016.
New data not yet published by FICO show that the new score, called FICO XD, could help more consumers get approved for credit cards than the company previously thought. FICO found that 55% to 60% of credit-card applicants it reviewed now have the new XD score even though they were previously unscorable. FICO had estimated earlier that only about one-third of the credit-card applicants would get the new score.
Why this new credit scoring system? Because the lenders want to encourage as many people as possible to use credit, even if it extends that person beyond their means.
There are a few reasons for this new scoring system. This will allow those who have had a foreclosure or bankruptcy the ability to build credit. It will also open the door for new entrants to the credit system – students and those moving into the job market.
Between 35% to 50% of credit-card applicants who are now scorable have an XD score higher than 620, a minimum threshold that some credit-card issuers require for approval. The XD score runs from 300 to 850, the same range as traditional FICO scores, and a 620 on the XD scale equals a traditional FICO score of 620, says Jim Wehmann, executive vice president of scores at FICO.
Borrowers with an XD score who receive a credit card and pay their bills on time for at least six months will then receive regular FICO scores, making it easier to get other types of loans including mortgages.
Credit is like a medication. It is beneficial if used properly, but it is disastrous if used improperly. High schools and families rarely teach the young how to use credit. Instead, most of us leave the young to swim without a life preserver. They do their best, but do not realize that the lenders are like sharks, waiting 
in the shallows to pray on the innocent and naive. TV teaches our young that success equals fancy possessions, like overpriced cars and houses. No one teaches the goal of financial security.
Enough of my soap box. I challenge each of you to learn how “to use credit rather than credit using you”. Go forth and learn. Trust your common sense and not someone who is poised to make money from your innocent mistakes (over draft bank fees, late fees for loans, excessive interest on credit cards).
The post New FICO Score Opens Door for Many Could Not Qualify in the Past appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
According to an article in the Wall Street Journal, Money Beat, a new FICO credit score designed by Fair Isaac Corp.FICO +1.65% (FICO XD) is intended for those who have not been able to access financing due to their traditional credit score. This could those new to the credit system, like new graduates. The score will use data from: timely payment of cable, cellphone and utility bills. A full roll-out of this new credit scoring system is expected early in 2016.
New data not yet published by FICO show that the new score, called FICO XD, could help more consumers get approved for credit cards than the company previously thought. FICO found that 55% to 60% of credit-card applicants it reviewed now have the new XD score even though they were previously unscorable. FICO had estimated earlier that only about one-third of the credit-card applicants would get the new score.
Why this new credit scoring system? Because the lenders want to encourage as many people as possible to use credit, even if it extends that person beyond their means.
There are a few reasons for this new scoring system. This will allow those who have had a foreclosure or bankruptcy the ability to build credit. It will also open the door for new entrants to the credit system – students and those moving into the job market.
Between 35% to 50% of credit-card applicants who are now scorable have an XD score higher than 620, a minimum threshold that some credit-card issuers require for approval. The XD score runs from 300 to 850, the same range as traditional FICO scores, and a 620 on the XD scale equals a traditional FICO score of 620, says Jim Wehmann, executive vice president of scores at FICO.
Borrowers with an XD score who receive a credit card and pay their bills on time for at least six months will then receive regular FICO scores, making it easier to get other types of loans including mortgages.
Credit is like a medication. It is beneficial if used properly, but it is disastrous if used improperly. High schools and families rarely teach the young how to use credit. Instead, most of us leave the young to swim without a life preserver. They do their best, but do not realize that the lenders are like sharks, waiting 
in the shallows to pray on the innocent and naive. TV teaches our young that success equals fancy possessions, like overpriced cars and houses. No one teaches the goal of financial security.
Enough of my soap box. I challenge each of you to learn how “to use credit rather than credit using you”. Go forth and learn. Trust your common sense and not someone who is poised to make money from your innocent mistakes (over draft bank fees, late fees for loans, excessive interest on credit cards).
The post New FICO Score Opens Door for Many Could Not Qualify in the Past appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
The Ninth Circuit has now held that a debtor who sues for damages with respect to a violation of the automatic stay may recover the reasonable fees it incurs prosecuting the action, even after the stay violation is cured.
The Section 362 of the Bankruptcy Code’s includes a fee recovery clause: “An individual injured by any willful violation of a stay provided by this section shall recmover actual damages, including costs and attorneys’ fees.” Up until now, the 9th Circuit, in contrast to every other court held that section 362(k) allowed a debtor to recover only those fees incurred to end the stay violation itself, not the fees incurred to prosecute an action for damages. Of course this rule was of little help in combatting stay violations because most attorney fees for stay violations are incurred after the stay violation has ended. Debtors who wished to hold creditors accountable were forced to foot the bill. Now, at long last, debtors who previously lacked any real financial incentive to pursue damages for stay violations may now be more willing to bring those actions.
Please contact our office immediately, if you feel that your protections under the automatic stay provision has been violated.
The original post is titled Practical Improvement to Automatic Stay for Oregon and Washington Debtors , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .
So what is a Zombie home? Have you seen homes sitting empty and abandoned for months or years? You have probably seen a Zombie home. The owner made a very difficult decision to abandon the home. The mortgages on the property far exceed its fair market value; meaning there is no equity in the home. In many situations the owner cannot afford to keep the mortgages current or maintain the property to keep it in good condition. The owner may abandon the home and move to another property or to live in the property until the lender forecloses. Even if the lender will agree to take less than the debt it is still impossible to sell the property because of the condition. End result – Zombie home.
Even though the owner abandons the home this does not relieve them of personal liability. The owner may have personal liability to someone who is injured on their property. The owner can be cited by the local municipality for failure to maintain the property. If there is a homeowner’s association the owner is most likely personally liable for homeowner’s dues and assessments.
Lenders may not start a timely foreclosure for many reasons. They may have too many properties in foreclosure in that area and are reluctant to put another property into foreclosure. The lender may be concerned about taking on the ownership responsibility of an abandoned home in poor condition. Detroit and other cities are faced with entire neighborhoods that are abandoned. These properties become areas of increased crime which add to the burden of the city’s public resources.
Recently there has been a move to use the bankruptcy process to take a run at this problem. A few creative bankruptcy attorneys are using the chapter 13 process to transfer ownership of the property to the secured lender with the confirmation of the chapter 13 plan. See In Re Stewart, 2015 Bankr. LEXIS 2948; 536 B.R. 273. Minnesota); In Re Zair, 235 B.R. 15 (E.D. N.Y. 2015), In re Rosa, 495 B.R. 522.)
This is a creative idea, but as of this writing has not been dealt with at the 9th Circuit. These cases profile courts’ frustration with lender’s failure to take reasonable and timely action to either foreclose on the property or forgive the secured debts.
Excerpts from Nebraska Debt and Bankruptcy Blog, By Sam Turco on October 6, 2015 Posted in Chapter 13 Foreclosure
The post Zombie Homes – Abandoned, Pre-Foreclosure Properties appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
You’ve heard about certain jobs that allow you to qualify for student loan forgiveness after a period of repayment. But how about just having the federal government pay your federal student loans for you?
No joke. Under a little known program called the Federal Student Loan Repayment Program, some agencies will actually pay your loans for you as a way to get you to take a job or remain in a particular position.
In fact, in 2014 there were 33 Federal agencies that provided 8,469 employees with a total of more than $58.7 million in student loan repayment benefits. That’s an average of $6,931 paid per employee.
Eligibility for the Program
Under federal law, agencies are allowed to set up their own student loan repayment programs to attract or retain highly qualified employees.
Any employee is eligible to participate in the Federal Student Loan Repayment Program, except those occupying a position excepted from the competitive civil service because of their confidential, policy-determining, policy-making, or policy-advocating nature.
Though the law says that the program is for, “highly qualified employees,” each agency gets to decide what that means. There’s no specific type of academic degree necessary, and every agency tailor their plans accordingly.
Therefore, an agency may specify the types of degrees and levels necessary to attain this goal.
How the Program Works
Each agency establishes its own plan authorizes a department or person to review and approve offers of student loan repayment benefits.
Though you may be eligible to participate, you aren’t automatically entitled to a student loan repayment just because they’re in a particular job. Each agency has discretionary authority to repay certain types of federally insured student loans as a recruitment or retention incentive.
If your agency allows you to participate then you’ll be required to sign a service agreement that spells out the terms of repayment as well as the length of time you’ll need to remain in the job. If you leave the job before completing the period of service required then you’ll have to reimburse the paying agency for the full amount of the loan repayment benefits provided.
The amount paid by the agency on your behalf is considered additional taxable income.
As a practical matter, this would be something you’d discuss with your employer before you take a particular job. As with any fringe benefit it’s something you can negotiate.
Which Loans Are Eligible?
The program allows for the payment of federally made, insured or guaranteed student loans only. You won’t be able to get your private loans repaid by virtue of the program, but getting those federal loans paid will leave you with more money available to use towards the private loans.
Loans eligible for payment are those made, insured, or guaranteed under parts B, D, or E of title IV of the Higher Education Act of 1965 or a health education assistance loan made or insured under part A of title VII or part E of title VIII of the Public Health Service Act.
Loans made or insured under the Higher Education Act of 1965 include the following:
Federal Family Education Loans (FFEL)
- Subsidized Federal Stafford Loans
- Unsubsidized Federal Stafford Loans
- Federal PLUS Loans
- Federal Consolidation Loans
William D. Ford Direct Loan Program (Direct Loans)
- Direct Subsidized Stafford Loans
- Direct Unsubsidized Stafford Loans
- Direct PLUS Loans
- Direct Subsidized Consolidation Loans
- Direct Unsubsidized Consolidation Loans
Federal Perkins Loan Program
- National Defense Student Loans (made before July 1, 1972)
- National Direct Student Loans (made between July 1, 1972, and July 1, 1987)
- Perkins Loans (made after July 1, 1987)
Loans made or insured under the Public Health Service Act include the following:
- Loans for Disadvantaged Students (LDS)
- Primary Care Loans (PCL)
- Nursing Student Loans (NSL)
- Health Professions Student Loans (HPSL)
- Health Education Assistance Loans (HEAL)
How Much of Your Loans Will the Agency Pay?
Remember, we’re not talking about Public Service Loan Forgiveness. This is an actual payment of your federal student loan made by a Federal agency that employs you. Therefore, there’s a limit of how much the agency will pay.
Each agency sets its own rules for repayment of loans through theFederal Student Loan Repayment Program, so it will differ from agency to agency. By law, each agency may made payments of up to a maximum of $10,000 for an employee in a calendar year and a total of not more than $60,000 for any one employee.
An agency may agree to make payments on those student loans taken out prior to the student loan repayment agreement, so any loans you take out once the agreement is signed aren’t going to be paid.
Given the fact that the federal student loan limit is currently set at $57,500 for undergraduates and $138,500 for those who have graduate or professional studies, those repayment limits can come in handy.
How Long You Need to Work
You need to work at the agency for as long as the agreement says – once again, each agency has its own program requirements.
Periods of leave without pay, or other periods during which the employee is not in a pay status, do not count toward completion of the required service period. The service completion date must be extended by the total amount of time spent in non-pay status.
However, federal regulations allows absence because of uniformed service or compensable injury to be considered creditable toward the required service period upon reemployment.
Agencies Offering Student Loan Repayment
According to government reports, here are some of the 33 federal agencies that offer student loan repayment programs:
- Department of Defense (DOD)
- Department of Justice (DOJ)
- Department of State (DOS)
- Securities and Exchange Commission (SEC)
- Department of Veterans Affairs (VA)
- Department of Health and Human Services (HHS)
- Government Accountability Office (GAO)
- Department of the Interior (DOI)
- Department of Housing and Urban Development (HUD)
- Department of Commerce
- Department of Energy
- Department of Transportation
- Department of Treasury
- Federal Energy Regulatory Commission
A Good Argument for Government Employment
Federal government benefits are the best there are, and retirement plans are terrific.
Federal student loans come with Public Service Loan Forgiveness after 10 years of timely payments made while employed full time with the government (among other employers). But if you’ve got $60,000 or less in federal student loans outstanding and can get into this program, your payments effectively go away immediately.
You’ve got to work anyway, so why not consider Uncle Sam as your employer of choice?
The post How to Get the Federal Government to Pay Your Student Loans appeared first on Shaev & Fleischman LLP.
According to a post by Kevin Carey, New York Times, reports that the Education Department released new data suggesting that the student loan system is failing and that, the loan crisis hits hardest at colleges enrolling large numbers of students from low-income backgrounds. Students are not able to find well-paying jobs that allow them to repay the loans, assuming they even graduate.
Recent research finding that student loan defaults are heavily concentrated among the most economically marginalized students, the new data suggests that debt is a major financial obstacle for people who already face barriers to opportunity.
Some of the numbers are startling. American National University — a for-profit chain offering degrees in business, health care and information technology, both online and at 30 campuses in six Midwestern states — has an official default rate of 8.5 percent, well below the national average of 11.8 percent. But its five-year nonrepayment rate is 71 percent. Even after seven years, most of the university’s students, the large majority of whom borrow, have failed to pay back a penny of their loans.
Continue reading the main story
Note from Diane: How is this nightmare possible? Colleges learned how to beat the default reporting system which is supposed to hold them accountable. They offer deferments and other short term programs that will allow the default rate to appear lower than it really is. Meanwhile these colleges continue to pull more and more students in with the promise of “free money” for their education. Originally this greed was relegated to for-profit schools, but the reports now show the non-profit (tax payer supported) schools are on the same gravy train.
What are the consequences to the borrowers? Many are faced with a financial burden they can never hope to pay off. Others are taught that you can borrow money and don’t need to pay it back. Still others are just looking for a free ride. Have we become a society that promotes free loaders? I hope not, but wonder where this will stop. I also wonder why a problem has to become so widespread before anyone does something about it (e.g. the mortgage loan crisis). Sometimes the solution is more disastrous than the problem it was designed to solve.
The post Student Loan Defaults Worse Than We Thought appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
There are many ways to treat a vehicle when filing chapter 13 bankruptcy. Not one answer fits every case. In fact, the answer is going to vary depending upon whether or not the debtor is current on the vehicle, whether the vehicle was purchased within the last two and half years, and whether or not+ Read More
The post Should I Pay My Car Inside Or Outside Of My Chapter 13 Bankruptcy Case? appeared first on David M. Siegel.
People have no idea how much they owe on their student loans, and that’s a major reason why default rates as so high.
A December 2014 study released by the Brown Center on Education Policy at Brookings indicates that about half of all students in the U.S. underestimate how much debt they have. 28% of students with federal loans said they had no federal debt, and 14% said they didn’t have any student debt at all.
With just a little organization you’ be in a better position to repay your student loans. But it’s so overwhelming that you don’t know where to start.
Today on The Student Loan Show I go through a 10-step process that will help you get organized and keep things on track.
Resources
- Student Loan Help Facebook Group
- Credit Card Repayment Calculator
- Student Loan Repayment Calculator
- AnnualCreditReport.com
- Experian
Subscribe to The Student Loan Show
If you like what you hear, please subscribe to the podcast on iTunes. You’ll get automatic updates every time a new episode goes live.
http://media.blubrry.com/studentloanshow/p/www.studentloanshow.com/wp-content/uploads/2015/10/032.mp3
The post Get Organized To Keep on Top of Student Loan Payments appeared first on Shaev & Fleischman LLP.
A sophisticated phone scam has been used to target bankruptcy filers in several states. The scammers are using personal information from filings and posing as attorneys to get intended victims to wire funds to satisfy their debts.
If someone calls you, as your bankruptcy attorneys, asking you for an immediate wire transfer to satisfy one of your debts, it is not your bankruptcy attorney, it is a scam artist. Apparently bankruptcy filers in Virginia and Vermont have been receiving spoofed calls where the scammer uses software that enables him to appear to be calling from the debtors’ attorneys offices. Typically, these the calls come late in the evening or during non-business hours to make it difficult for debtors to verify the call by calling their lawyer back.
Consumers receiving this kind of call are advised to hang up and contact their bankruptcy attorney as soon as possible. Do not give any personal or financial account information to the caller. Thankfully there have been no reports of these scammers attempting to take money from Oregon or Washington filers, but you never know.
The original post is titled Bankruptcy Phone Scammers! , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .
Chapter 7 Bankruptcy The Straight Story In my last article I went over for you the basics of bankruptcy and briefly described the two most common types of bankruptcy used by individuals. Now I am going to spend some time focusing on the number one most common type of bankruptcy; the Chapter 7, which is […]
The post Chapter 7 Bankruptcy The Straight Story appeared first on Tucson Bankruptcy Attorney.
Updated daily, this blog will keep you informed on the latest bankruptcy news! 
Learn more about how Bankruptcy works and what you need to know.