Getting Out of Debt Q&A

Why Scotland Is Far Ahead in Debt Consolidations

There comes a time when money troubles affect all of us, but unfortunately it can all too quickly spiral out of control if you’re not careful. If you have more than one credit card or several different loan agreements in place then keeping track of everything can fast become a nightmare, leaving people wondering how exactly they should be handling their finances in the correct way.

Debt consolidation is one solution that can often help those who have their borrowing all over the place, and when it comes to this method you’ll find that Scotland is a country that takes a lot of stress out of money matters.

That’s because Scotland allows its citizens to take out something called a Scottish Trust Deed when they’re struggling with multiple repayment arrangements. This is a legally binding arrangement between an individual and their creditors, where unaffordable payments are transferred into a single affordable monthly payment. This legal agreement can only be carried out through a licensed Insolvency Practitioner, who then acts as the trustee for your arrangement.

The big advantage to using a Scottish Trust Deed is that you’ll be protected from your creditors. They won’t be able to take legal action against you for not making repayments, and you can also enjoy peace of mind that your home and car are protected against being repossessed.

The repayments are also based on your circumstances, so you will only have to pay what you can reasonably afford. The pressure of unwanted phone calls with creditors is also removed as a trustee will take care of everything for you.

Is it Ever Appropriate to Invest While in Debt?

by Hank Coleman

Should you invest while still in debt? When should you start investing? You may want to start investing despite still being in debt.

Is it ever appropriate to invest while in debt? The presence of the word “ever” in that question should be a hint that the answer is “yes”. If you figured that already, then good for you and right you are.

Is it Ever Appropriate to Invest While in Debt?

But it’s a “yes” with qualifications. Investing while in debt should be the exception to the rule. There are, however, a number of exceptions, some of which we’ll talk about here.

Investments that can be engaged in with skill, like binary options trades through Banc de Binary, are one such exception. These are trades that can be completed in seconds, which have the potential to multiply invested amounts several times over.

For those skilled at this method of trading, it’s a great way to make money, and can be used to gain the funds necessary for total debt cancellation. It’s also a risky proposition and one that should only be taken part in with money that won’t be missed if the investments don’t pan out. But for people who enjoy past paced and fun investment models, this can be a great one to add to your repertoire.

Most of the argument against investing while in debt comes results from a simple concept: debt tends to add up much faster than wealth. Investors hope for 7-9% annual returns from mutual funds and other stock market gains. But high interest credit card debt can accumulate at 25% annually – sometimes even more!

The math is simple. You won’t make money if you’re taking on debt faster than you’re growing wealth. If you have high interest consumer debt, there is almost no good reason to invest until it is paid off.

Don’t Make These Mistakes Marrying Someone With Student Loan Debt!

by Hank Coleman

Student loan debt is something of an elephant in the room for couples nowadays, because it’s not fun or easy admitting just how big the burden is and discussing finances sometimes causes anxiety for both people involved. If you have a small student loan to pay back or you’ve paid off your schooling altogether, it can be tricky navigating issues like marriage when your partner has a significantly higher student loan debt burden.

However, many personal finance experts agree that debt shouldn’t be a make or break issue for a loving relationship.

Mistakes to Avoid with Student Loans and Marriage

While some couples decide to avoid marriage altogether, there are many ways to make student loans and marriage work. And, student loans and marriage can work as long as you avoid the following mistakes:

1) Not Disclosing Finances to Each Other

Lack of communication when it comes to finances can be disastrous for a relationship. It’s not the loans that become the issue; it’s the lack of transparency about the amount and the couple’s approach to paying them off in a timely manner.

To avoid miscommunication or arguing about money before and after marriage, it’s important to lay everything out on the table and organize your finances before the wedding. This may take a few hours or a few weeks; it doesn’t matter how long it takes you as long as you remain open and honest with each other and tackle every detail.

A common problem for the partner with the higher student loan debt load is not knowing exactly how much they have, how much they’ll have to pay, and how they’ll pay it off. The uncertainty can cause stress and resentment for the partner with little to no student loan debt, unless you both have a solid plan for paying it off. Consider these questions during the organizational phase of your engagement:

How much money is owed altogether (both partners)?
How will you pay this money off? Are there income-based repayment plans available to you?
Does one partner make more money and is willing and able to help pay down more of the principal on the student loans?
What are your monthly living expenses together? How much can you both afford to put towards student loan payments each month?
What resources are available if you think you might default on a student loan? If default is inevitable, how can you protect the person in the relationship who has less debt?

2) Having a Lavish Wedding

Did you know the average cost of a wedding is over $31,000? That’s a crazy amount, especially when you do a cost-benefit analysis and realize how much of your student loans you could have paid off with that money. Obviously weddings should be special occasions that will create life-long memories, but you don’t need an expensive wedding to attain those goals.

The Relationship Between Millennials and Credit

by Hank Coleman

Here is a great infographic from the folks at Avant.com discussing the relationship between millennials and credit. Why is their credit score below average? Here’s an interesting look at some of the details between millennials and credit. The Relationship Between Millennials and Credit Where Millennials stack up against the U.S. Credit Score Average U.S. Credit … Read more

How Far Would You Go To Erase Your Student Loan Debt?

by Hank Coleman

With over 44 million Americans holding $1.3 trillion in student loan debt, people have begun to notice how big of an issue it truly is. In 2015, over 7 out of 10 students graduated with student loan debt with the average coming in at more than $35,000!

Recently, a survey was conducted by LendEDU, a student loan refinancing marketplace, to see how far students would go to be released from their student loan repayment obligations. It is amazing how far some students would go to have this burden lifted from their backs! Check out the infographic below to see the results.