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Private College Loans and Filing for Bankruptcy
Are you a recent college graduate drowning in student loan and credit card debt? A recently proposed bill that will allow consumers to include their private student loans in bankruptcy has been passed by the House Judiciary Subcommittee on Commercial and Administrative Law, which is the first step in the process. Follow the progress of the bill through the Govtrack.us.
What does this mean for you?
Filing for bankruptcy might seem like a viable option for someone with a lot of student loan debt, but you have to examine all of the impacts. It will tarnish your credit report, which will have an effect on your ability to get a mortgage and your job search. More and more employers are looking at credit reports and if you have bankruptcy on your report it could eliminate your from consideration.
Decline in Credit Card Debt
You may not realize it, but there has been a steady decline in credit card debt over the last several years. This is being attributed to several factors, one of them being the record amount of bankruptcies this year. As bankruptcy courts become increasingly busy, outstanding credit card debt continues to drop as the big banks write-off record amounts. Furthermore, some consumers have chosen a path of frugality. This in turn, elevates the cash cushion so if any unexpected emergency expense comes along, such as car repairs, consumers would turn to savings rather than plastic.
What does this mean for you?
Those factors causing a drop in credit card debt have impacted other areas of the consumer finance arena as well. The rapid decline in outstanding credit card debt is already being felt by card issuers. As card issuers lose revenues obtained from traditional interest fees, they must rework their business model to produce profit. Consequently, card issuers have turned to a fee-based revenue generation model, and consumers have noticed a steep increase in the amount and types of credit card fees - from late payments to non-usage to over-limit fees.
Military Security Clearance Denied Because of Delinquent Debt
Take a guess at what is the No. 1 reason military personnel lose security clearance?
Treason, a run-in with the law, mental illness? Believe it or not, it’s personal finances. Astonishing huh?
What does this mean for you?
According to a recent study compiled by InsideArm.com, the No. 1 reason people lose security clearance with the U.S. government/military is delinquent debt. Amazingly, the total cost of military personnel getting a security clearance revoked is estimated above $200,000. This may seem high, but keep in mind that included in that estimate is the years of training provided to the person and the training of a replacement (4). As a result, with the current economic environment in flux, this is a grave concern for the U.S. government and taxpayers.