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Aren't there bankruptcy protections?
There are none for student loans. If you file bankruptcy they're the only kind of debt that you can't discharge.
- Option 1: Avoid getting into debt - Option 2: Pay your bills on time - Option 3: File Bankruptcy If you haven't taken option 1 or option 2 and you start getting court notices - then it's time to start talking to someone about option 3.
It's happened to me with an old student loan. I didn't fight it, they took some of my paycheck, the debt was gone in no time and everybody was happy.
- Option 1: Avoid getting into debt - Option 2: Pay your bills on time - Option 3: File Bankruptcy If you haven't taken option 1 or option 2 and you start getting court notices - then it's time to start talking to someone about option 3.
It's hard to see these "millions of americans" as victims in this matter. It's almost always possible to just _not buy_ something if you can't afford it.
The more I learn about what happens to people who are in debt and fall into hard times, the less I want to buy anything with credit.
Well credit cards are a pretty recent development. The first general purpose card wasn't created until 1966. Sure, you can trace different forms of credit all the way back to the Crusades and the Knights Templar, but credit cards are a recent invention. If you think it about this way, the greatest generation never used credit. They saved until they had the money to buy stuff. My grandparents never had credit cards, a…
The more I learn about what happens to people who are in debt and fall into hard times, the less I want to buy anything with credit.
The more I learn about what happens to people who are in debt and fall into hard times, the less I want to buy anything with credit.
Credit is a trap for the unwary and those that fail to plan ahead. I include myself in that group, as I have credit debt. Don't do - save your money.
In retrospect, I didn't give him good advice. It's not that the overall approach is a bad one, but I didn't understand or emphasize just how important it is to establish a credit history. When you're in college, credit card companies will offer you a line of credit even if you have no previous credit history. If you can charge $10 a month, and pay it on time every month, for several years… I'm not kidding, banks will lend you $750,000 to buy a house at the most favorable rates 5 years later simply based on your demonstrated ability to pay $10 a month reliably and not run up a $10,000 debt just because you can. It's a test, and it's an important one to pass - but if you aren't going to pass, don't take it (yet). You will need to eventually.
If you don't take this test and pass it, banks will at best charge you a higher interest rate that could actually cost you well over 100K over the lifetime of the loan. They might not loan to you at all.
So yeah… if you can't handle credit, don't do it, but be aware of how important it is to establish a credit history.
The more I learn about what happens to people who are in debt and fall into hard times, the less I want to buy anything with credit.
From my point of view, it was absolutely crazy. I tried everything in order to persuade them to let me open an account, such as offering to pay for several months of service in advance, but their policy prohibited anyone with "unknown credit risk" from creating a new account under any circumstances.
All you have to do is get a credit card, buy all your groceries with it, then pay it off every month. Paying it off every month is the most important part. If you suddenly find yourself in a position where you have much less income, resist the temptation to use your credit card as a supplementary income.
The more I learn about what happens to people who are in debt and fall into hard times, the less I want to buy anything with credit.
Credit is a trap for the unwary and those that fail to plan ahead. I include myself in that group, as I have credit debt. Don't do - save your money.