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It may not be a well-know fact, but the truth is a lot of financially-responsible people are turned down for loans because they have NO history of recent borrowing. None.
This may be because the person saves up and pays for purchases without financing, or because they have not bothered to start building a new credit history by borrowing (and showing on-time payments) after a major financial event such as a bankruptcy or foreclosure.
After a bankruptcy discharge, a debtor needs to make sure that, after his or her case closes, there is a new credit history being reported with either new lines of credit that are opened, or old lines that were maintained and still being used.
Many of these individuals are credit-worthy but the current credit reporting and scoring system is not set up to evaluate this.
To get at this problem, Fair Issac Corp, also known by the acronym “FICO,” announced this week it is launching a pilot program to provide credit scores using alternative data including payment history on utility bills, cable bills and cellphone bills as well as other information in the public record such as the number of addresses the person has had in the recent past (an indicator of stability).
Right now some 53 million Americans don’t have FICO scores. Under the new system, it is estimated some 15 million will now be scorable for credit application purposes.
The program is not without it’s critics. Some consumer advocates are afraid that the new system will add more sources of possible negative information which could be problematic for consumers living in extreme climates where utility bills can sometimes spike causing the customer to fall behind on a payment.
And of course the new program is being encouraged by lenders to open up credit markets for more people.

It may not be a well-know fact, but the truth is a lot of financially-responsible people are turned down for loans because they have NO history of recent borrowing. None.
This may be because the person saves up and pays for purchases without financing, or because they have not bothered to start building a new credit history by borrowing (and showing on-time payments) after a major financial event such as a bankruptcy or foreclosure.
After a bankruptcy discharge, a debtor needs to make sure that, after his or her case closes, there is a new credit history being reported with either new lines of credit that are opened, or old lines that were maintained and still being used.
Many of these individuals are credit-worthy but the current credit reporting and scoring system is not set up to evaluate this.
To get at this problem, Fair Issac Corp, also known by the acronym “FICO,” announced this week it is launching a pilot program to provide credit scores using alternative data including payment history on utility bills, cable bills and cellphone bills as well as other information in the public record such as the number of addresses the person has had in the recent past (an indicator of stability).
Right now some 53 million Americans don’t have FICO scores. Under the new system, it is estimated some 15 million will now be scorable for credit application purposes.
The program is not without it’s critics. Some consumer advocates are afraid that the new system will add more sources of possible negative information which could be problematic for consumers living in extreme climates where utility bills can sometimes spike causing the customer to fall behind on a payment.
And of course the new program is being encouraged by lenders to open up credit markets for more people.

When you fall behind on your federal student loan repayment, it feels as if there’s no good news. Collectors call day and night, and the threat of wage garnishment looms large.
Each month, the payment amount due soars. Finally, you throw up your hands and figure there’s no sense in fighting the federal student loan monster.
Once you’re past due 270 days, your federal student loan slips into default. And with that, the government ramps up collection efforts.
The IRS sends your tax refund to the US Department of Education. Your employer withholds part of your income and sends it to the student loan people too.
Then you find out about rehabilitation, and how it can fix the default on your federal student loans. You feel the weight lift from your shoulders as you realize there’s hope for your student loan troubles.
But you get only one shot at rehabilitation, so make sure your don’t screw it up.
Make one mistake and you’ll find that your federal student loans fall back into default. Here are some tips to help make your rehabilitation a successful one.
Enter Into a Verbal Rehabilitation Agreement
When you decide to rehabilitate your federal student loans, the debt collector will likely try to get you to agree to it over the phone.
That’s a huge mistake because if there’s a disagreement later, you’ve got the old, “he said, she said,” problem.
The US Department of Education has a written application used by all the student loan collectors. Use it to make sure you keep the lines of communication clear between you and the debt collector.
Make Mistakes on Your Written Application
The rehabilitation application is just a few pages long, and it seems pretty simple. You may think you can breeze through it.
That wouldn’t be a good idea.
The application determines how much money you’ll pay each month for your rehabilitation. Make a careless mistake and you could find yourself with a failed rehabilitation.
Accept The Payment Amount Without A Fight
By law, your monthly rehabilitation payment has to be set at a reasonable and affordable amount. That’s usually the same as the amount you’d pay under one of the federal income dependent repayment plans, but not always.
For example, if you’ve recently experienced a change in your income or expenses you need to let the collector know.
Use the application as a starting point, but don’t accept the payment amount if you can’t afford it.
Fail To Review The Collection Costs In Advance
Federal regulations allow collection agencies to add their collection costs to the loan amount. But the regulations don’t force the collector to add them.
In fact, you may have some leverage when it comes to negotiating collection costs on your federal student loans.
When you rehabilitate your loans it counts towards the collector’s performance ratings. It also means the collector has one less person to call for money each month.
If you negotiate with the collector before your rehabilitation, you may get them to lower the collection costs.
Keep Incomplete Records
Under federal guidelines you need to make 9 monthly payments under your rehabilitation agreement. If you do then your loan comes out of default and the government brings it back into good standing.
If you miss a payment or make a late payment then the money will be gone but your loan will still be in default.
The collection agency can also make a mistake by not crediting your account the right way. If that happens, you won’t get the benefit of the doubt – your loan will sink back into default and the money you’ve spent will be gone.
The simple fix is for you to keep copies of your cancelled checks or bank statements showing the payments. If there’s ever any doubt about your payments, you can breathe easy because you’ve got the paper trail.
Make Fewer Payments Than Required
Under the federal student loan rehabilitation guidelines, you must make 9 monthly agreed-upon payments.
You’ve got to make those payments on time.
If you don’t follow the rules then your loans will remain in default. Your rehabilitation will fail, and that’s a shame.
Make all your payments on time. Period.
Ignore Your Credit Report
One of the major benefits of rehabilitation is the fact that your credit report will get cleaned up. The government will remove the default, and it will be as if you were never past due.
But mistakes happen, and it would be terrible to find out about it after a creditor denies you a mortgage or a car loan because of the default.
Take the time to pull your credit reports every six month to make sure that there are no errors. And if you find an error, don’t panic – just use the process to have it investigated and fixed.
Elect Standard Repayment After Rehabilitation
The Department of Education will transfer your loan to a new servicer when you finish your rehabilitation. When that happens, you’ll have the option to choose a repayment option.
If you choose not to select a repayment option then the servicer will place you into the standard 10-year plan.
You should look into the other options, including income dependent plans, that may save you money each month. Those programs may also set you up for a discharge of your unpaid balance after a period of time.
If you’re lazy and go with the standard repayment plan then you’ll end up costing yourself more money each month.
Miss Payments After Rehabilitation
You get one shot at rehabilitation during the life of the loan.
If you miss payments after your rehabilitation then you may go back into default.
Your only option for getting out of default a second time is consolidation under the Direct Loan Program. If you’ve already consolidated, that’s off the table as well.
If you go into default a second time then you’re at increased risk of wage garnishment, tax refund offset, and more.
If you think you’re going to miss a payment on your federal student loans then you need to look into your options fast. But if you do the hard work, you won’t have to worry about that ever again.
The post 9 Ways to Screw Up Your Federal Student Loan Rehabilitation appeared first on Bankruptcy and Student Loan Lawyers - 866.787.8078.

Walworth County Real Estate Attorney, Shannon Wynn, wants you to know about some important real estate tax breaks you can claim on your Federal and State income tax returns. With income tax returns due in the next couple weeks, there is no time like the present to make sure you have claimed all your deductions and credits. To take advantage of real estate tax deductions, you will have to itemize your deductions. For most Walworth County residents, itemizing your deductions is always well worth the effort. However, to be sure, compare your itemized deduction amount to the standard deduction amount and always choose the option providing you with the larger deduction.
When itemizing your deductions, refer to this list of homeowner tax breaks. Below we have detailed some of the best Walworth County real estate tax deductions.
1. Mortgage Interest. This is one of the biggest real estate tax breaks for Walworth County homeowners. For most homeowners, especially if you just recently purchased your home, the majority of your mortgage payment is going to interest. All of your mortgage interest is tax deductible. There are only interest deduction limits if you own a multi-million dollar residence. Therefore, as long as your mortgage is less than one million dollars, you can fully deduct every penny of your mortgage interest. Your financial lender should have sent you a statement in the mail indicating the amount of mortgage interest you paid in the previous year.
Some special notes about real estate mortgage tax breaks:
     a. If you refinanced or took out a home equity line of credit, you can normally also deduct these amounts as long as the amount is less than $100,000.
     b. You can also deduct the mortgage interest on your second home, vacation property, RV, or houseboat, as long as the “second home” has cooking, sleeping, and bathroom facilities.
     c. You can rent your second home and still deduct the mortgage interest. However, you must spend time at the second home yourself (14 days, or more than 10% of the total rental days).
2. Mortgage Points. If your credit was not perfect, you may have paid “points”. Paying points means that you paid money to buy down your mortgage interest rate. Pull out your closing documents and look for the mortgage points paid. There are qualification requirements in order to deduct your mortgage points, such as the mortgage must be for your primary residence, paying points is a common practice in your area, and some other rules. Please check with your Walworth County real estate attorney or CPA to see if your mortgage points are tax deductible.
Some special notes about real estate mortgage points:
     a. If you have a refinanced loan, a second home mortgage, or a home equity loan, you can deduct points, but the points usually have to be deducted over the life of the loan. See your Walworth County Real Estate Attorney or CPA for details.
3. Walworth County Real Estate Taxes. Homeowners can deduct their Walworth County real estate taxes. If you escrow, you will find the amount on the statement you received from your financial institution at the end of the year. If you don’t escrow or do not have your end-of-year mortgage statement, you can refer to your Walworth County property tax bill. You can deduct your Walworth County real estate taxes every year for as long as you own your home.
Some special notes about Walworth County real estate taxes:
     a. If this is the first year in your home and you moved into your new home mid-year (not January 1st), you will need to pull out your closing documents. The buyer and seller of the real estate property most likely each paid their portion of the year’s real estate taxes. Your portion is fully deductible.
These three Walworth County real estate tax breaks for homeowners carry the largest deductible amounts. This is not a full list of real estate deductions available. Please, consult with the IRS or your Walworth County real estate attorney for a complete list of deductions available to homeowners. Remember, it may take longer to itemize deductions on your tax return, but the benefits are well worth the effort. Always compare your itemized deduction amount to the standard deduction amount in order to get the biggest tax break.
 
Contact Our Walworth County Real Estate Attorney
If you have questions regarding tax deductions, foreclosures, or any other real estate matter, please feel free to contact our Walworth County Real Estate Attorney. We are more than happy to schedule an appointment with you to discuss your real estate matter. Wynn at Law, LLC conveniently has offices located in Lake Geneva, Delavan, and Salem, Wisconsin. You can reach our Walworth County Real Estate Attorney by phone at 262-725-0175 or by email via our website’s contact page.
 

 
 
*The content and material on this web page is for informational purposes only and does not constitute legal advice.