Prenuptial agreements can be a great tool for protecting assets for married couples who ultimately end up divorcing. But what happens when you don’t have a prenup? Or if you wanted one but your spouse refused to sign and you decided it wasn’t worth the aggravation? Can you still protect your assets? The answer, as is so often the case in law, is that it depends. Certain assets can absolutely be protected. Others not so much. Here is the list of ways you can protect (at least some of) your money and assets without a prenup.
1. Keep your own funds separate.
The word “commingling” is often synonymous with “lottery winnings” to one spouse; and “gambling losses” to the other. If you have an account that has funds in it that you either 1) owned prior to the marriage; or 2) received during the marriage as inheritance or a non-marital gift; and then mixed in your earnings from your pay, or joint funds from another bank account – then poof! The entire account becomes marital. Why? Because the courts consider money to be “fungible” meaning that once that marital dollar goes in, you can’t tell which dollar is coming back out. So Rule #1 – Keep your separate funds separate!
2. Keep your own real estate separate.
Many people own a home prior to getting married. Oftentimes, especially if that home becomes the home for the married couple, the homeowner decides to throw the other person’s name onto the deed. What harm could that be? Right? I mean what happens if the owner died – wouldn’t you want your spouse to have it? The answer is that once the non-owning spouse’s name is on that deed, even if it is removed again down the road, the result is that the court will presume that you have given half the value to that spouse as a gift. And yes, you can sit on the stand and testify that it was only done for “estate planning” purposes, but most times that kind of testimony just comes off as self-serving and falls flat. So, you can always create a will or trust that leaves your property to your spouse. Rule #2 – do not put your spouse’s name on the deed unless you are prepared to hand over half the value of it in a divorce.
3. Use non–marital funds to maintain non-marital property.
Here’s where the waters get murkier. It is easy enough to decide to keep your own property in your own name. The rub comes when it comes to maintaining that property. This is where the couple is using their paychecks to pay the mortgage on that property, or to make renovations or improvements to that property. Now the court is going to be faced with trying to carve out which part of the value of the property might be marital and which part of the value has remained non-marital – a tedious and tortuous task. To keep it all clean, just use your funds from your premarital or inherited account to maintain your non-marital property, too.
4. Keep bank statements for retirement accounts issued at the date of marriage.
Unlike other accounts that are commingled, if you have retirement account assets at the date of marriage, and at the time of divorce, you can produce a statement that shows what you had in that account, then the court may let you carve off that amount and divide the rest. The challenge is finding those statements sometimes. Make sure you keep statements that show if the custodian changes.
5. Get a valuation of your business around the date of the marriage.
Also unlike bank accounts that are commingled, the court has the ability to potentially carve off the appreciated value of a non-marital business. So for example, if your business was worth $1 million on the date of your marriage and worth $2 million on the date of your divorce, your spouse would be entitled to the one half of the difference or $500,000. (Or you could have just had the spouse sign a prenuptial agreement that waived any and all appreciation — but assuming you didn’t, this is the next best option).
While a prenuptial agreement is the ideal way for specifying how assets are to be divided should there be a dissolution of marriage, all is not lost if there isn’t one. By following these five steps, you can still protect some, if not all, of your premarital or non-marital assets.
Take a good look at your server the next time you’re dining out, because if someone you don’t recognize comes to take your credit card at the end of your meal, you may not want to hand it over.
A man who was eating at a restaurant in Santa Fe, N.M., said a woman he thought to be a waitress took his credit card and never came back with it, allegedly going to a nearby store and spending hundreds of dollars with the card.
According to a news story from KRQE in Albuquerque, video surveillance shows the suspect at a Target near the restaurant, where she reportedly spent $200 before driving elsewhere. The alleged victim canceled the card before any additional purchases could be made.
It’s not unheard of to have a restaurant worker other than your server collect the check, but it’s odd that a woman who didn’t work at this place was able to walk away with a patron’s credit card. Then again, legitimate restaurant employees all over the place have been known to commit fraud with a patron’s credit card, because it’s customary that servers will take your card out of sight, providing an opportunity to copy the information.
Because we don’t always pay close attention to who is serving us at restaurants or have the ability to oversee someone in possession of our credit cards, fraud like this is difficult to prevent. Still, there are plenty of ways to minimize the potential damage something like this could cause. (If the man had been using a debit card, for example, he would have been out $200 from his bank account, perhaps for a few days, until the fraud had been resolved.) One thing you can do is set up transaction monitoring and alerts for your accounts, so you receive notice of transactions over a certain dollar amount (or for all transactions), and you’ll immediately know whether it was you who made that purchase. Additionally, it’s a good idea to check your account activity daily, so any unauthorized transactions can be quickly identified and reversed.
Credit card fraud can hurt your credit score if it goes on undetected, because a thief could max out your credit card, or get close to doing so, which has a seriously negative impact on your credit standing. Even though the fraudulent data should be corrected, it could be a time-consuming fix, and that can cause problems for you, particularly if you’re planning to apply for new credit. You can check your credit scores for free every month on Credit.com to see where you stand.
Ron Milman of Alpharetta, Ga., refinanced his mortgage in early 2015. He says he saved money, closed quickly, and except for one quick trip to a local bank to meet a local attorney to finalize paperwork, he never left his home office. Working strictly online and by phone, he says getting his mortgage online was a painless process for him. “I really don’t like going into an office,” he says. “It’s so much wasted time and effort.”
If you’re in the market for a home loan, whether for a purchase or refinance, you may have toyed with the idea of using an online lender. But you may be wondering what’s getting a mortgage online like? How is the process different?
“The Internet provides the most convenient way for consumers to compare mortgage service offerings; as a result, a growing portion of mortgage originations are anticipated to be completed online in the years to come,” according to Stephen Hoopes, an analyst with research firm IBISWorld.
It’s important to first understand that shopping for a mortgage online can be different than getting a mortgage online. In the first scenario you may be using a service that doesn’t actually make loans but helps connect you to lenders. In the latter case, you actually apply for and complete the process largely online.
With that in mind, here are some of the differences when you get an online mortgage:
The Internet Holds Answers
Aren’t sure about a mortgage term? Need help deciding which type of loan to get, or whether to go for a longer- or shorter-term loan? You can take a break to research it before you decide, without giving a loan officer a blank stare, or feeling like you are being put on the spot. Not that you can’t do that before you shop for a mortgage anyway, but apparently quite a few consumers don’t fully educate themselves on all their options when getting the largest loan of their lives.
A recent report by the CFPB found that almost half of borrowers seriously consider only a single lender or broker before deciding where to apply. The CFPB also says that most borrowers rely heavily on those who have a financial stake in the transaction, and less than half get a lot of their information from outside sources such as websites, financial and housing counselors, or friends, relatives or co-workers.
Of course, researching online can be a double-edged sword. You need to make sure you are getting information from reliable sources, such as independent educational websites. The CFPB is one source of free education through its Owning a Home initiative.
Do It On Your Own Time
Need to dig up a bank statement for your lender? Want to check on the status of your appraisal? With an online lender you can usually take care of those things whenever it’s convenient for you. Information about the status of your loan will be available to view online, and if you have a question, employees may be available to review your loan file and answer questions outside of the standard banking hours. “You can see (your information) 24/7 and you are not locked into business hours getting a hold of your loan officer or processor,” says Bob Walters, chief economist at Quicken Loans.
While virtually the entire process can take place online, you aren’t tied to your computer. If you have to provide documentation and don’t have a fax machine or scanner, you should be able to overnight bank statements, tax returns or other documents to the lender. Certain documents will have to be notarized, and the notary will come to you or meet you in a convenient location, such as a local coffee shop. Most closings for purchase transactions take place at a title company, while closings for refinance transactions can take place anywhere you choose.
Some Things Never Change
Of course, whether you decide to work with a local lender or an online mortgage company, certain things don’t change. You will want to get your free annual credit reports to make sure they are accurate. Do this at least six weeks before you plan to apply, or longer if possible, to give yourself time to correct mistakes. In addition, getting a free credit score will help you understand whether your credit is excellent, fair or poor. (You can get two of your credit scores for free on Credit.com.) While you are at it, if you hope to buy a home, it’s a good idea to get pre-approved for a mortgage.
And be prepared to supply documentation your loan officer may need — including copies of bank statements, tax returns, paystubs etc. Just because you scan documents doesn’t mean you won’t have paperwork! But you may save a few trees — and save yourself a few headaches — this way.
It goes without saying that you should make sure you are dealing with a reputable lender with a secure website. No one should be emailing a copy of your tax return or credit report back and forth to you. The last thing you want is for this kind of sensitive information to fall into the hands of a scammer.
And while rates are very important, Scott Sheldon, a loan officer with Sonoma County Mortgages and a Credit.com contributor, warns that you may get what you pay for. “Internet lenders are priced incredibly thin. Their pricing and rates can be fantastic, but they operate solely off of volume.”
He is concerned that going this route can be especially risky for homebuyers with unique circumstances or a less than “squeaky clean” file. What happens to your home purchase if the “underwriter denies your file because it wasn’t packaged properly upfront by the loan officer whose is also working on 50 other loans simultaneously?” he asks.
For Milman, at least, the process that started with a phone call in December resulted in a closed loan by mid-January. “It makes a whole lot of sense to do this online,” he says.
One in 10 U.S. adults is invisible to much of the American economy because they have no credit report or score, a new report by the Consumer Financial Protection Bureau has found. Those 26 million adults — disproportionately Black or Hispanic — have virtually no chance to borrow money or use credit cards. And another 19 million adults have credit reports so “thin” that they are unscoreable by traditional methods, and also left behind by the credit system.
“Today’s report sheds light on the millions of Americans who are credit invisible,” said CFPB Director Richard Cordray. “A limited credit history can create real barriers for consumers looking to access the credit that is often so essential to meaningful opportunity — to get an education, start a business, or buy a house. Further, some of the most economically vulnerable consumers are more likely to be credit invisible.”
The CFPB found that 188.6 million American adults have credit records that can be scored using traditional models, or 80% of the population.
Most of the Americans left behind by traditional scoring methods are young. Over 10 million of the estimated 26 million credit invisibles are younger than 25, the CFPB found.
Among those with thin files, the CFPB said the group was evenly split between those who have an insufficient credit history and those who lack a recent credit history.
Consumers can have thin files for a variety of reasons. Recent immigrants or young adults might simply not have had the time to build up credit events on their report. Consumers with bankruptcies in their past may have stopped using credit and switched to cash transactions.
Consumers in low-income neighborhoods are more likely to be invisible or unscored, the CFPB said. In poor neighborhoods, nearly one-third of residents are invisible, the CFPB said, compared to 4% in a high-income neighborhood.
Black and Hispanic consumers are considerably more likely to be credit invisible or have unscored credit records than White or Asian consumers, the CFPB said. About 15% of Black and Hispanic consumers are credit invisibles compared to 9% of White consumers. An additional 13% of Black consumers and 12% of Hispanic consumers have unscoreable records, compared to 7% of White consumers.
This analysis was conducted using information from the CFPB’s Consumer Credit Panel, which is a random sample of de-identified credit records purchased from one of the nationwide credit reporting agencies and is representative of the population with credit records.
Every year, hundreds of thousands of Americans file for bankruptcy. Even though it damages the consumer’s credit for years and many people would do almost anything to avoid bankruptcy, it’s sometimes the best and fastest way for a debtor to recover from financial hardship.
It’s not a decision to make lightly, but it’s also an option you don’t want to ignore for too long, because if your situation could be helped by bankruptcy, you only prolong your financial struggle by putting it off. There are many signs bankruptcy might be right for you, like seeing your debt balances grow even though you’re making payments, raiding your retirement savings to make debt payments, struggling with an underwater mortgage, or putting others — such as your family— at risk if you don’t take care of your debt.
A bankruptcy can remain on your credit reports for up to 10 years from the date it was filed, though you might be able to have it removed earlier. Once you file for bankruptcy, you want to start practicing good credit habits, like making any remaining debt payments on time and keeping credit balances very low. You could use a secured credit card to rebuild your credit, (here are some of the best secured credit cards out there) and you’ll also want to make sure you stay on top of other financial obligations, so unpaid bills don’t get sent to a debt collector and end up damaging your already-shaky credit standing. You can also track your credit rebuilding progress by getting a free credit report summary every 30 days on Credit.com.
In 2014, there were 898,970 non-business bankruptcy filings in the 50 states and the District of Columbia, coming out to a bankruptcy rate of 2.8 people in bankruptcy per 1,000 people. In a few parts of the country, bankruptcy is much more common, according to bankruptcy data from the Administrative Office of the U.S. Courts and 2014 population estimates from the U.S. Census Bureau. Here are the states with the highest bankruptcy rates last year.
2014 bankruptcy rate: 3.62 bankruptcies per 1,000 people
Bankruptcy rate: 3.71 per 1,000
Bankruptcy rate: 3.78 per 1,000
Bankruptcy rate: 3.79 per 1,000
Bankruptcy rate: 4.36 per 1,000
Bankruptcy rate: 4.59 per 1,000
Bankruptcy rate: 4.68 per 1,000
Bankruptcy rate: 5.1314 per 1,000
Bankruptcy rate: 5.1316 per 1,000
Bankruptcy rate: 5.89 per 1,000
Bankruptcy is a worthwhile consideration for anyone who struggling with debts they can’t expect to repay over the course of a few years, but it’s not a get-out-of-debt-free strategy. Filing for bankruptcy takes a huge toll on your credit, and you generally can’t discharge student loans in bankruptcy. Consult a bankruptcy attorney to find out if it’s the best option for you.
This is the fourth and final installment in a series of pieces for people who find themselves unable to continue to meet the minimum payments on credit cards and other bills, and who want to learn about what I sometimes refer to as “debt intervention” options. Don’t worry; this is not one of those interventions where friends, family and co-workers confront your budget. This is an effort to confront the issues yourself, and is mostly about getting informed enough to feel confident in your decisions to eliminate debt.
This series is largely based on my five-day email exchange with an actual reader, Beth (not her real name), who submitted detailed personal information.
This final piece focuses on all three of the options to resolve debt that I have discussed in the three previous articles with her so far — credit card consolidation, negotiating debts for less and bankruptcy. It is in this final piece that she makes her decision.
Weighing the Options
Here’s Beth’s email:
Michael, I can’t thank you enough for your answers. I spent the whole weekend reading your articles.
[Card issuer 1] brought up the blp (balance liquidation plan) and settlement in my 2nd and 3rd calls, and I haven’t called [card issuer 2] and [card issuer 3] to see what they say. My payments are all due this week but I want to save the money for the settlement and not pay another outrageous interest fee, however if I were to settle now I wouldn’t be able to make the payments in 90 days, I need 5-6 months, with that being said I’m seriously considering not making my payments this month, what are your thoughts?
I’ve never been late my whole life, but it seems a step back I need to take in order to move forward. I feel stuck in this situation where I can’t settle now and pay in 3 months but I also don’t want to make another payment paying interest when I could save the money towards the settlement. That leaves me with 1 option I didn’t want and that’s the no payment/late payment.
I’m still looking into the Chapter 7 bankruptcy, but finding a good attorney is an issue, also I just moved from Utah to Florida 2 months ago and spent many months overseas in the last 2 years when I was unemployed and I was making the minimum payment, so when it comes time to meet with a judge I don’t know if that would be an issue.
My reply back to Beth:
Your credit card interest rates are not all that outrageous. I see them regularly at twice the 13% average you have. But they are flat-out unaffordable given your current circumstances and the temporary income situation.
I would be a little surprised if you were able to get a good settlement from the card issuers in the early months of having missed payments. You say you need 5 to 6 months to be able to fund settlements. That is currently the amount of time suggested to go (when your credit card payments are not being made), to get to the most reasonable and flexible bank policies and targets for negotiating your debt.
It is not for me to tell you to stop paying your credit cards. I can say that you generally will not reach favorable settlement outcomes when you are current, or only barely behind with payments.
You mention being stuck where you cannot settle now and pay in 3 months. But that is what I am saying too. You generally cannot do that. Your payments generally need to be late more than 90 days, and often more than 150 days late, but not yet 180 days late, in order to optimize your results. It is sometimes better to settle certain accounts even later than 180 days.
In other words, it is not only OK that you have to wait several months without paying before you are prepared to settle the credit cards, it is actually how it works best.
I really do like the Chapter 7 option for you. You are fortunate to be in a position to legitimately consider the three mainstream options for resolving problem debts with credit card consolidation, debt negotiation and bankruptcy. I am not sure why you would be having a hard time locating an experienced bankruptcy attorney? You can do a bankruptcy attorney search by city or zip code; or use your local phone book. If it were me, I would not make my final decision to negotiate these bills down until I talked with at least one attorney about Chapter 7 bankruptcy.
Seeking Professional Guidance
Next, Beth commits to do what I find of major importance for virtually everyone I come in contact with whom needs a form of outside intervention to get relief from crushing debt. That is: calling professionals who offer no-cost consultation and who can provide detailed information about their flavor of debt relief.
Beth wrote back to say:
I called the hotline and an attorney is supposed to call me in a couple of days. Bankruptcy makes me feel uncomfortable, the whole thing about the 7-10 years on my report and everything else is intimidating for someone who has always kept payments current and had financial control their whole life up until 2-3 years ago. It sounds like bankruptcy would save me more than the other options and would be life saving, very tempting indeed, however I’m afraid there will be long-lasting consequences. Giving my info over the phone was already intimidating let alone the attorney and the whole process that follows.
I’m not sure if I should call the credit card consolidation counselor in the meantime or wait for the attorney first. I did call [card issuer 2] for the first time today, and they basically “suggested” me to be late at least a month and they would contact me to offer options. So I’ve decided that I’m not going to pay any of my cards this month. They also said to call a consumer credit counselor to see if they can help me.
To which I responded:
I completely understand your being anxious about talking about any of this with a bankruptcy attorney, or a credit counselor. It is normal to feel that way. But I can tell you it is also pretty normal to feel a sense of relief when you do talk things over with a professional from each of the mainstream debt relief options.
You will consult with the bankruptcy attorney, where I am confident you will be able to dispel some of the concerns you have about filing. You may choose not to file chapter 7, but that decision will be an informed one, which is what I believe people in this spot owe themselves.
I would call a credit counselor. The counseling agency you call about consolidating your credit cards is not as important as choosing the right debt negotiator, or attorney. Using a nonprofit agency to consolidate your bills into one lower payment (with lower interest rates and typically less than a five-year payoff plan), is really a matter of what you can qualify for, which all agencies can quote you and get within a couple dollars of each other. I would make that call as soon as possible, and with the mindset that you are gathering information, not enrolling in the debt management plan they will quote.
Working Through the Confusion & Fear
Beth wrote me back a brief message I have not included here because it rehashed much of what we covered in earlier parts of this article series. She admitted she had been reading so much that she was perhaps a little confused about her options.
I have found some confusion to be pretty normal at the beginning of the information gathering process. Especially if you are grabbing information from many different online resources and/or getting feedback from different people in your own circle of influence (friends and family).
Beth has yet to talk with a credit counselor, or a bankruptcy attorney, and also expressed some remaining confusion about the debt settlement process. She also finally fell in line with nearly all early-stage debt intervention consultations I have ever done, where she expressed sincere concerns about her credit scores and reports.
I am including much of my response to Beth, as it will hopefully drive home some important details.
I wrote back and said:
I know you have read so much to date, but I really think you need to read the following carefully.
Start with this article where I answer the question – What is debt settlement? Yes, it is the basics, but this is just the start. It’s part of an entire series on settling with your original creditors.
You have come up with the wrong impression of settling your credit cards in the time frame of being one to two months late. That is not going to happen. You need to wait typically until after your fifth payment has been missed in order to get the deals you need so that you can afford to pay them — or even for some credit card banks’ last-ditch policies to kick in — allowing you to settle at all.
Your credit scores take a hit, but recover in quick order (all things considered). I see many credit recoveries within two years of completing your settlements. (You can see how your debts are affecting your credit scores by checking them for free on Credit.com.)
This is not about your credit scores, though. This is about the affordability of your debt. Something has to give, and it will be your credit score. Simply put, you cannot afford to finance anything right now anyway, and when you are back on firm financial ground, credit and financing options will be available, or can be planned for.
Making the Decision
And finally, the last two emails Beth and I exchanged.
I’m going to follow your instructions and read the articles tomorrow just like you said. I understand that in my bad situation I need to focus on getting rid of the debt more than on my credit score.
I just called [card issuer 2] and they offered me 0% for 5 years:
2 cards combined = $11,035 currently min payment = $247, but could become 0% 5 years = $185.
I’m still leaning towards settlement… but the question now is:
• Do I miss payments for about 3-5 months and then negotiate a settlement? And let late payments impact my score, or
• Do I take the 0% for 5 years offer for now and in a few months negotiate a settlement? I would be saving a little and it goes toward my balance but I also understand I’m “wasting” money making payments when in reality my plan is settlement later.
To which I responded:
You could likely get the five-year plans from all three of your particular credit cards at either zero interest, like [card issuer 2] offered, or really close to it. You could enroll in the plans and run a tight budget until your work situation is more stable. But like you pointed out, that is $500 set aside for four months. That is $2,000 ready to deploy toward what could turn out to be the better path, settlement or bankruptcy, a few short months from now.
All of your specific creditors tend to offer hardship and balance liquidation plans for the first 30 to 60 days of nonpayment (even longer from time to time). You do not need to decide on that right away.
Hard Choices May Ultimately Be the Better Ones
Beth is in a financial situation that would be a whole lot different if her employment were reliable. I am encouraging Beth to look more seriously at debt negotiation and bankruptcy than credit card consolidation for two reasons:
Statistically speaking, she would be better suited to one of those options instead.
In more than 20 years, I’m saddened by the people I see who waste money and time on what they perceive to be the better path to take, but whom ultimately never took the time to get informed about any other alternatives.
Hopefully this series drives home that there is a need to research and get informed, and also to reach out and talk to professionals in the different debt relief options out there.
No doubt you’ve heard the news: Corinthian Colleges has flipped the switch, leaving its 16,000 current students in the dark.
The for-profit “career college,” headquartered in Santa Ana, Calif., had been the subject of student and staff complaints, investigations by numerous state attorneys general, the Consumer Financial Protection Bureau and the Securities and Exchange Commission. Most recently, it was also hit with a $30 million fine by the Education Department for misleading students about their post-degree job prospects.
Jobs, however, aren’t among the affected students’ immediate concerns right now.
Like most other higher-education organizations, Corinthian’s business model is predicated on governmental largesse: specifically, the steady supply of easy-to-get student loans, grants and other aid. So when the ED cut off access to all that in 2014, students were left scrambling for alternate means of financing their studies.
The institution’s collapse, however, has left these same students with debts that will be difficult to repay now that the completion of their degrees is even less certain than it was before (for-profit-school graduation rates are roughly one third that of public four-year schools, according to a College Board policy brief).
According to the ED, these consumer-learners have two choices: They can either seek transfers to other institutions that will credit what they’ve accomplished to date or apply for a discharge of the federal student loans they’d undertaken to attend their now-defunct school.
Discharge sounds awfully appealing in a world where student loans are virtually impossible to escape, even in bankruptcy, but selecting that option would also leave them with nothing to show for their time and efforts. On the other hand, given the increasingly challenged educational-value proposition of the programs that career colleges offer, Corinthian students may have no other choice but to transfer their credits to other for-profit institutions, even though some of these also happen to be under investigation.
So it’s no wonder that when the ED urged Corinthian students to consider that course of action, consumer activists and proponents for educational policy reform were stunned by the department’s seeming about-face on the matter.
Clearly, the ED is stuck between a rock and a hard place.
The “rock” is the department’s now-obvious failure of preventing schools from using abundantly available, low-cost higher-education financing and other aid to develop what amounts to specialty degree programs targeted at economically fragile segments of the student population—degrees that may neither be aligned with those that are bestowed by mainstream public and private institutions nor universally accepted at face value by employers.
The “hard place” represents the significant financial and potentially precedent-setting consequences of discharging debts that, according to the National Center for Education Statistics, are undertaken by an average 83% of students at for-profit colleges versus 63% and 53% of students at private nonprofit and public institutions, respectively.
In other words, it’s all about what to do with a bunch of academic outliers who happen to owe a lot of money.
Apparently, the ED’s response is to punt that ugly ball. But does this crisis really begin and end with Corinthian? More important, are we missing an opportunity to turn this blunder into a blessing?
Many would rightly argue that lax oversight and the proliferation of low-rate financing inspired colleges and universities to build excessively, hire indiscriminately and engage in activities that not only distract from the core mission of providing quality higher education but have also led to practically unaffordable tuition prices.
The other side of that argument, however, is equally pointed: When all is said and done, the schools took the money. It’s therefore perfectly reasonable to expect their active participation in solving the problem, willingly or otherwise.
Rather than shunting these students to institutions that, arguably, have the potential to become the next Corinthians, or writing off billions of dollars’ worth of taxpayer-backed loans, the ED should get to work on a plan to mainstream them into traditional two- and four-year programs at the same schools that continue to cash the government’s checks.
Certainly, it would cost less to transition students in need of remedial education than it would to discharge their average unpaid debts. Furthermore, as the decline in higher-educational enrollments persists and private nonprofit and public school administrators resist taking the long overdue steps to reduce costs and improve educational content, it’s also only a matter of time before what we see taking place in the for-profit sector begins to occur elsewhere.
This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its affiliates.
Whether you’ve been rejected for credit in the past or you are just interested in alternative loan methods, it’s nice to know that there are options out there aside form dealing with big banks.
Getting rejected is never fun, and if you have bad credit, you know this all too well. Maybe you are starting or growing a business, need a loan to get out of a tight financial situation or think you have a surefire investment, but bad credit is holding you back. (You can see where you stand by checking your credit scores for free on Credit.com.)
Here are some ways to get a loan on your terms.
1. P2P Lending
P2P or peer-to-peer lending connects people seeking a loan with people looking to invest in others without charging high interest. In place of banks or lending institutions, often third-party intermediary websites can help manage the relationship. Your credit and loan purpose will still be evaluated, but you can get help without being indebted to the banks. Your information will become available to investors and they might ask for more information than banks do, but interest rates are likely to be lower.
Funding a project or business as an Average Joe or Jane has never been easier. Crowdfunding means contributors can give a little or a lot of money through donations, investments or loans through the Internet. Sites like Kickstarter and Indiegogo are just two examples of the many options for rewards-based crowdfunding, where donors give money in exchange for a piece of the company they invest in or early access to a product or service.
3. Microloans From the Government
The government offers microloans to spur small business creation and expansion. The U.S. Small Business Administration (SBA) has a program that can provide up to $50,000. These funds come from local, community-based intermediary organizations. You can find where to apply at your local SBA District Office.
4. Home Equity Line or Second Mortgage
Although it involves the bank, you can use the equity you have built in your home to fund your own new business or venture. You can use the equity you have already built in your home to fund your own new business or venture. This can be risky so it’s important to think carefully about the stipulations of taking out a second mortgage. If you default on the loan, you can put your home in jeopardy and do serious damage to your credit.
5. Loan Against Retirement Plan or Insurance Policy
This is another risky option and one that financial experts discourage, but it offers the chance to access money without borrowing from the bank. If you have either, you can borrow from your retirement fund or even against your life insurance if you have a cash value policy. This is risky because if you can’t pay it back (and in some cases quickly), taking a loan from either source can leave your financial future vulnerable, so plan ahead and do your research.
With the weather warming up and images of travel getaways looking even sweeter than before, you are probably looking forward to (or trying to figure out how to afford) getting some vacation time this summer. Even if your trip seems miles or months away, you can start figuring out how to save for it now. No matter what type of travel you have planned, take a look at these five ways you can pay less and travel more.
1. Know Your Style & Budget
Everyone travels differently, so it’s a good idea to identify what type of vacation or travel you want to have before you hit the road. Whether you are in the mood for beach time, big city exploration or extreme outdoors, it’s important to evaluate locations based on what you enjoy. Next comes creating a budget you can stick to for the place itself (staying in a hotel in the middle of New York City will likely be more expensive than camping at a national park) and your goals for your time there.
2. Research — & Let the Deal Inspire You
It’s important to schedule some research time ahead of your trip. There are tons of deals websites out there where you can find discounted prices on travel, accommodations and activities. This can be especially helpful if you know what you want to get out of the vacation (relaxation, beach time or city exploration) but aren’t tied to a specific location. Even if you can’t find a vacation package that interests you, look for coupons for certain aspects of the trip you do want. Thorough research can help you save time and money and avoid “tourist traps.”
3. Know When to Buy Airfare
Speaking of research, it’s a good idea to find out the best time to book your travel. Online resources can be great tools to finding the cheapest travel ideas. Use multiple sources to price out your travel and look for the value in non-peak travel times if you are able to schedule it. Even if you have to travel during a busy time, you can save big just by flying mid-week or buying your flight or hotel at the right time. Tuesday and Wednesday afternoons are usually best for securing discount rates and booking about eight weeks in advance seems to be the sweet spot.
4. Rent From the Owner
Think outside the hotel box. Whether you look into hostels or search Airbnb to find local hosts that will rent out their extra space or property, you can save big by avoiding the hotel. These options are often in good locations to give you an authentic experience. Many even have kitchens that can help you cut down on dining-out costs as well.
5. Maximize Rewards
Whether it is with your credit card or through a vacation and travel points program, you can save big if you take the time to understand your rewards. It’s important to make sure you are spending and using wisely along the way to help stock up for and make the most of your summer experience.
Many of us love to travel to take a break from the norm, but money can be a deterring factor. This summer, make sure you get the adventure or relaxation you crave without setting yourself back financially. You don’t want to go into debt that you could potentially be paying for months after your vacation is over. And you certainly don’t want to acquire so much debt that it has a negative impact on your credit score. If you do find yourself carrying a balance as a result of your summer fun, it can help to come up with a plan to pay it off (this credit card payoff calculator can help you do that). You may also want to get into the habit of checking your credit scores regularly so you can become more aware of how your debts affect your credit. You can get two of your credit scores for free, updated every month on Credit.com.
Thousands of employees at U.S. car dealerships will have the opportunity to get a free college degree as part of a program announced today by Fiat Chrysler Automobiles and Strayer University. Employees at Chrysler, Jeep, Dodge, Ram Truck and Fiat dealerships across the country will have the opportunity to get associate’s, bachelor’s or master’s degrees in disciplines including business administration, accounting, education and information systems, among other things, according to a news release from FCA US.
Employees at dealerships in Florida, Georgia, South Carolina, North Carolina, Alabama and Tennessee can now enroll in courses for the summer and fall terms, either online or at one of Strayer’s campuses. Strayer University is a four-year, private, for-profit institution with an enrollment of about 40,000. There are 80 campuses in 24 states, but degrees can be completed entirely online. Dealerships in those six states (FCA US’s Southeast Business Center) are the first to offer the program, but nationwide enrollment at Fiat Chrysler’s 2,630 U.S. dealers is planned for the third quarter of this year. More than 118,000 people are employed at Fiat Chrysler dealerships in the U.S.
Dealers will pay a flat fee to opt into the program, no matter how many employees take advantage of the opportunity, and workers who enroll will have the cost of their tuition, fees and books covered, said John Fox, director of dealer training at FCA US. Strayer’s website lists total tuition and fees for a bachelor’s degree at $58,250.
Employees pay nothing out of pocket, Fox said, and employees are not limited in their education goals, meaning they can choose to take a single class, earn a certificate, study for a bachelor’s degree and so on. Fox said the goal is to improve retention among dealership employees, and both existing and new employees will be eligible to participate (new employees are eligible after 30 days of work).