2011 June 10 by jesse
If you’ve filed for bankruptcy or are contemplating it, you may be wondering how it will affect your ability to get student loans and other financial aid. The good news is that there are still options available for borrowing money after bankruptcy. The bad news is that it’s a bit more complicated with a bankruptcy situation. Here’s the scoop on the different types of financial aid and how they’re affected by bankruptcy.
Federal loans, such as Stafford and PLUS (loans for parents), are the largest providers of financial assistance for higher education. Because the government encourages higher learning at colleges and universities, these programs are still available to those who have filed bankruptcy.
There are two subcategories within the federal assistance bucket – grants and loans. Grants are need-based or merit-based scholarships that don’t have to be repaid. They are based on either a special achievement of some type, such as academic excellence or athletic skill, or based on household income or hardship. Loans have to be repaid, but have lower interest rates and more flexible repayment schedules.
The good news is that bankruptcy is not a factor in receiving grants and loans from the federal government, providing your criminal record is clear. Your credit history and income are not factors in being approved for federal loans. However, if you’ve defaulted on a school loan in the past, this could affect your chances for receiving another loan.
A good place to start seeking federal assistance is filling out a Free Application for Federal Student Aid, or FAFSA. The FAFSA allows the school and the federal government to determine what kind of financial aid you are eligible for.
Unfortunately, private loans may not be an option for financial assistance after a bankruptcy. These programs are not regulated by the government and therefore have stricter criteria for approval. Private lenders typically look at whether there has been a bankruptcy within the past 10 years and may deny based on that.
A few exceptions exist, such as if the bankruptcy was the result of a natural disaster or extraordinary medical costs. And if the parent has filed bankruptcy, this should not affect on their child’s eligibility for private financial assistance (as long as parents are not cosigning).
Lenders also look at payout plans. Borrowers who filed for a Chapter 11 or Chapter 13 and had a payout plan will be more likely to get a private loan than borrowers who filed a Chapter 7. Lenders also look at whether the borrower is able to refile for bankruptcy – making Chapter 7 filers more attractive because they are unable to immediately refile.
Your first phone call should be to the financial aid department of the school you (or your child) plan to attend. It is not uncommon for bankruptcy filers to seek financial assistance and the experts will know the best options for your specific circumstances.
2011 June 10 by jesse
DIANA SCHNEIDER, PRE-FILING PARALEGAL
Tell me about your background before you joined Bankruptcy Law Professionals.
I worked as a church secretary for six years (from 2002 to 2008), then stopped working in August 2008 to marry my love as well as take some time off until April 2009 when I started working as the File and Admin Clerk for Bankruptcy Law Professionals.
What does a typical work day look like for you?
I am currently the Pre-filing Paralegal, which means I work on data entry/case preps. I spend most of my day typing our client’s information into our Bankruptcy Case software, which takes anywhere from three to five hours per case. Mix in phone calls, emails, as well as filing cases and documents electronically for our clients and you’ve got a good picture of a typical day as a Pre-filing Paralegal.
What do you enjoy most about your job?
I love working for Jesse (he’s a super-boss) and I enjoy all my hardworking coworkers. I love the flexibility of what I do and being able to problem-solve and help others out. One of the most satisfying things is to be able to help a client solve a problem and make their day brighter.
What do you like to do in your spare time?
I love interior design and am currently in the process of decorating and remodeling our recently purchased home. Anything DIY or home-project related gets me super excited. I love me a good Before and After. I also have a side-business/hobby of photography; it’s so fun to capture someone’s moment on film!
If you won the lottery today, what would you do?
Hmmm, I think I would use some towards remodeling and paying off our house, give a part to people I know that are in need, a part to my local church/missions, and use the rest to go shopping at IKEA!
2011 June 10 by jesse
Dealing with financial problems is one of the largest stresses in life. In fact, study after study, including the ground-breaking 1967 University of Washington study, have come to the same conclusion – financial issues are the main cause of stress in American life.Stress can affect your physical and mental health, your marriage, your friendships, and more. It can even lead to major physical problems like obesity, diabetes, heart disease, and high blood pressure.But on the positive side, one of the ways you can mitigate stress is through humor. According to the Mayo Clinic, laughter alone has a positive physical affect:
- Stimulates organs. Laughter enhances your intake of oxygen-rich air, stimulates your heart, lungs and muscles, and increases the endorphins that are released by your brain.
- Activates and relieves your stress response. A good laugh fires up and cools down your stress response and increases your heart rate and blood pressure, resulting in a relaxed feeling.
- Soothes tension. Laughter can also stimulate circulation and aid muscle relaxation, both of which help reduce some of the physical symptoms of stress. It can also exercise the diaphragm, contract the abs and get your heart pumping, which can all help you to feel better.
- Improves your immune system. Positive thoughts actually release neuropeptides that help fight stress and potentially more-serious illnesses. And laughter increases the number of antibody-producing cells and enhances the effectiveness of T cells.
- Relieves pain. Laughter may ease pain by causing the body to produce its own natural painkillers.
In addition to the physical effects, laughter and humor can help you cope with problems in a more positive way. If you’re a more positive person, thie makes you easier to be around, helping you connect with people. So seek out some movies, TV shows or books that make you laugh, or go to a comedy club with some friends. Seek out some coworkers who make you laugh and invite them to lunch. Reconnect with an old friend who always told the best jokes. You know what they say — laughter is the best medicine!