In a depressed economic climate, student loan debts are being put aside just to pay the bills; this causes many loans to go into default. Do not be a victim of high education debt! With hard work and excellent time management skills, you can graduate from college without student loans.

While the full-ride scholarship is rare, there are many partial and specialized scholarships available. The college itself often has many different scholarships available for everything from sports to academic majors. Some high schools have scholarships contributed by various alumni and can be based on scholastic merit or activity.

Various organizations and charities also provide scholarships. If you are or a parent is a member of veterans, social or other organizations, you can check to see if they have scholarships. A scholarship doesn’t have to be paid back and can be as little as fifty to several thousand dollars. Attending the school where your parents attended may also give you access to alumni scholarships.

You may be able to pay your way through college using monthly payments. This requires having a job while you are enrolled, and it can be challenging to work and study simultaneously, but many students find the right balance. You can also save money by only going to college half-time or by starting at a community college. Most financial aid offices offer monthly payment plans to help you manage the cost. You can spend a few years flipping burgers during college and go into your corporate job debt free.

For some, delaying college and working prior to attending, to save up money for tuition, might be the right choice. You can even work during high school. Many high schools partner with local community colleges so that students can earn college credit at a much lower price. Exploring these options, as well as taking AP classes that grant college credit when you successfully pass the AP test can also reduce your overall student debt burden.

While these tips won’t help those currently straddled with the heavy burden of student debt, these tips can help those who are just beginning to consider college:

• Attend a state school instead of a private school, to benefit from lower tuition rates
• Rent books instead of buying them, to save hundreds of dollars each semester
• Get hired by a company that offers a tuition reimbursement program
• Live at home instead of in dorms and save $5,000 – $8,000 a semester or more

If you want to graduate with no student loans, then you need to exhaust every cost saving measure before and during your college career.

There are several reasons why an individual may be forced into either a short sale or a foreclosure. Unemployment, a nasty divorce, or lack of funds for whatever reason can lead you to such a point. Regrettably, it’s a difficult situation to stop once it has started; the lender tends to notice pretty quickly when payments have stopped coming in. Law requires that you get a warning of some sort, but by that point, your options are limited.

Foreclosure occurs when the bank takes back the property. This means that you have failed to make payments on your mortgage, and as collateral, the lender strips you of all property rights and takes the home from you. The long-term effects of foreclosure can be painful as well, affecting your credit and preventing you from purchasing another home for five to seven years. It is not uncommon for prospective employers to run credit checks as well, and a foreclosure on your record may cost you a much needed job opportunity.

A short sale, when possible, is a much better alternative. A short sale is when you sell the home for less than what you owe. The lender must approve the short sale, but because there are so many properties in foreclosure and programs supported by the government to help you through the short sale process, this can be a positive alternative.  You are still forced to sell your home, but at least this way, it is on your terms.

Keep in mind that the lender has to agree to it first, and you may owe any deficits, depending on the agreement. This a better option than foreclosure, in that as long as you were never behind on your payments, you can purchase another home immediately. Although your credit scores will still drop, the term “short sale” will never appear on your credit report the same way a foreclosure would.

It sounds like a catch-22 but when forced into such a situation, you have to choose the lesser of two evils. Although a short sale will still hurt your credit score, there are ways to recover. It might take a few years, but with the right strategies, you can rid yourself of debt, raise your credit score, ensure that you are in never in such a position again and buy a new home much sooner.

A wage garnishment is a court order that instructs an employer to withhold a certain amount of your wages in order to repay a debt. For those of us who are seeking court assistance in the payment of a debt, or for those of us who are at risk of having wages or other monetary assets garnished, we may want to know in advance whether or not Social Security benefits are at risk of garnishment. Can creditors seek relief from the courts by garnishing social security benefits?

Ironically, the government agency that will defend you and protect your Social Security benefits from creditors will turn around and take legal action against you, garnishing those same benefits in a number of circumstances.

According to information provided by the U.S. Social Security Administration, creditors cannot garnish your Social Security benefits. For example, credit card companies, mortgage companies, or automobile loan companies cannot tap your Social Security benefits to satisfy a debt. Supplemental Security Income (SSI) benefits are likewise resistant to related garnishments. The Federal government, however, does indeed have license to garnish Social Security benefits to enforce payment of alimony or child support, to collect unpaid federal taxes, and other similar liabilities.

Social Security benefits are a resource for retired citizens, disabled individuals, and family survivors. These benefits, while resistant to legal action by creditors, are not entirely exempt from garnishment when the Federal government is involved.  Regardless of your income or those benefits you receive, care should always be used in managing your finances.

Take steps ahead of time to protect your credit rating and to protect your money and investments from the interference of the courts. Pay your bills on time; honor your financial obligations. Keep your fiscal plate clean, and do not let a garnish become something distasteful and unappealing.

Countless late nights, who knows how many unwelcome research papers, and the horrible tasting dorm food that we did not dare think too much about: these were all a part of the experience that hopefully allowed us to acquire a decent occupation.

Of course the college education was worth it.

Only when the mortgage payment, the car payment, the student loan payment and all other assorted bills are due at the same time – and then we get laid off -  do we reach our wit’s end. One option looms in the distance: Is it possible to file bankruptcy on student loans?

Filing bankruptcy on student loans is difficult but not impossible. When filing for bankruptcy, you must also file a petition claiming that repayment of your student loans would cause undue hardship. Once you have filed, your fate is in the court’s hands. They use a certain level of discretion, and each case is treated differently, which makes it hard to accurately predict an outcome. It is up to you to prove that repayment of your student loans would not only cause your wallet pain but distress to you as well.

Unfortunately, the courts are not always as forgiving as we would like them to be, and we may have to defer to another option. If you are denied a discharge of student loans based on hardship, you can also apply for Chapter 13 bankruptcy. This “reorganization” is the next best thing, allowing you to postpone your student loan payments and catch up on any other debts that you may have. The advantage of this is that the payments are court-determined, so there will be no evil collectors knocking at your door.

Be aware, however, that this is not a get-out-of-jail-free card. You will still owe the balance on your student loans, but Chapter 13 bankruptcy gives you precious time to get your affairs in order.

Bankruptcy should never be a first choice, particularly if you are petitioning to discharge your loans. Many courts will want to see that you have exhausted all other options first. Although bankruptcy can put a cap on your debts and keep creditors at bay, it is not an end to your problems. Bankruptcy stays on your credit for seven to ten years, and the stigma attached can make it difficult to obtain credit down the road when you need it. Before things are too out of control, consider exploring the tools and services available from Ovation that can help you manage your debt and protect your credit.

Which is best? As in most things, it depends on your situation and your budget. You have to ask yourself what’s more important: the morale boost of a quick payoff, reduced interest payments, the satisfaction of paying off a large balance, or the stability of a well-defined payoff schedule?

Lowest Balance Paid First is the best choice for a number of reasons.  First, if you’ve run up a large debt across several accounts, you’re likely to be over-extended. And that means that your discretionary cash (money you have remaining after making minimum payments on your debt, paying your monthly bills such as rent or mortgage, utilities, and insurance, and paying for food, incidentals, and entertainment) is likely to be somewhat limited.

However much it is, applying your payment to the lowest balance first has a multiplying effect because it’s a significant percentage of the total owed. That added amount, when combined with the minimum amount, will drive the debt’s balance to zero relatively quickly. Just be careful that you don’t add to that debt or add to your debt in a different account. Sticking to the plan and actually paying off that first card will give you a huge morale boost, as will adding the now freed up money to the next lowest balance.

Suppose your lowest balance debt is $2,000, the interest rate is 14% and the minimum monthly payment is $75. According to the payment schedule on the Tools page, your last payment will be January 2015, and you’ll pay $410 in interest. Now suppose you can pay an additional $50 a month. Your last payment will be October 2013, and you’ll have paid $227 in interest, a reduction of $183. You now have $125 to add to your monthly payment on the lowest balance of your remaining debt, and you haven’t needed to make any additional changes to your budget.  As a bonus, you begin paying that down 15 months sooner.

Lowest Balance Paid First is a great tool for managing your credit debt. Your choice may be different depending on your situation. Whichever tool you choose, keep in mind that your primary focus should always be to eliminate your debt.

We all feel the urge to make purchases that we either do not need or are not financially ready to afford. However, the credit card industry (a willing and able partner of the retail industry) has made it all too easy to drown ourselves in debt. Using a credit card to make large purchases is one of the biggest mistakes people make, yet it happens all the time. The drive for instant gratification often overshadows the practicality of refraining from using the credit card, but there are several reasons as to why paying with cash is the best decision in the long run.

Making large purchases with your credit card only make you more susceptible to the fees and extra costs associated with credit card use. Any time you purchase an item with a credit card, there is interest that must be paid as well, making the item more expensive than it would have been if paid for with cash. That interest only increases with time, and the larger the purchase, the longer it takes to pay it off. A continually high balance on a card can easily ruin your credit and reduce your purchasing power in the future. Large purchases also risk pushing you over your spending limit, and over-the-limit fees are unforgiving.

You can have the items you desire without the mess and stress of credit problems, by simply planning ahead. Making a large purchase with cash not only protects you from any random fees or blows to your credit, but choosing to use cash also gives you the time to research the purchase and make sure you are getting the right model, style or version you need. Paying with cash is also proof that you are financially capable of purchasing the item, because handing over a wad of cash, knowing full well that there are bills to pay and your cupboards are empty, is much harder to do than sliding a piece of plastic through a machine. Cash is tangible and can force you to consider the necessity of your purchases.

Credit can be a powerful tool. However, large purchases enter the danger zone of credit spending. The simplicity of cash creates a platform in which planning and prioritizing can take place. This allows you to curb impulse, stick to your budget and maintain good credit.

If you are considering a large purchase, take the first step and put down the credit card.

In the real world, your credit card has become your emergency fund.

As you consider ways to modify your spending habits, you may find a few extra dollars each month to spare. The desire to establish or maintain an emergency fund clashes with the desire to pay down or pay off your credit card. With a cursory glance at interest rates, the choice to pay down the credit card takes priority over establishing or maintaining an emergency fund.

The use of a credit card demands that you pay the bank for the privilege of having access to the money on your balance. You’ll pay close to 15% interest, even if you have a good credit rating.  On the other hand, interest rates for savings accounts and CDs are minimal compared to the interest rate that you will pay for revolving credit.

When you consider how much extra you will pay a bank for access to their plastic emergency fund compared with how much a bank will pay you to give them access to your savings, the smart money is in paying down your credit card balance.

The money you save in credit card interest over time can be used to maintain an emergency fund on your own terms. Alternatively, you may choose to allocate a larger percentage of your disposable income to paying off your credit card balance, while allocating the smaller percentage to your savings (our tools can help).

As you structure your finances to improve your long-term security, consider other smart money decisions: While you pay down your credit card balance, track your credit card spending, utilizing text messaging and statement features to keep you informed and aware of where, when, and how often you are using your credit card. As well, examine your spending habits in general.

You may be in the habit of purchasing a latté on the way to work each morning. While the daily cost may seem trivial, calculating the weekly and monthly total for this daily indulgence essentially leaves you with an extra monthly bill.  Consider taking a thermos or travel mug with you to work. With that thought in mind, think about packing a lunch instead of ordering a take-out lunch or frequenting the local deli.  The savings will add up in your favor.

You cannot control how the market will respond to economic changes, but you can control your response to economic fluctuations. You cannot control rising prices and interest rates, but you can control your spending habits, and you can make smart choices with your money.

Thinking it will be good to have a credit card for emergencies, you jump through all the hoops, fill out the paperwork and wait expectantly for your shiny, new pre-approved card to come through the mail. Unfortunately, many never receive the card for which they were supposedly pre-approved. It turns out that the credit card company was not as nice as we initially thought; many people get turned down after they apply.  Think of the credit card companies as deep sea fishers: they cast the net as wide as possible in order to pull in as many fish as they can.  You are a fish.

The offer, pre-approved or not, is just that. It’s an offer, not a promise. (There’s fine print that says so, but we often overlook that in the eagerness to take advantage of the great deal they’re offering to help us pay off high-interest debt, at the same time taking a 0% APR cash advance).  Credit card companies simply establish a bandwidth of possible customers and distribute offers based on limited criteria. However, once you apply, the same company takes a more in-depth look at your credit history to decide whether you truly fit the bill.

For those who are always a day or two late on payments, applying for more credit cards can seriously hurt your credit and make you a less desirable candidate for future financing. A high balance on a card can hurt as well, and although the balance does not have to be at zero, you should try to keep the balance at less than 50%. Maxing out the credit card every month does not bode well for your credit history. Another thing that can hurt your credit report is a history of repeated rejections. If you are not getting accepted for a pre-approved credit card after multiple tries, take the hint and refrain from damaging your credit further.

As much as we all want to believe that we are special enough for credit card companies to select us for their pre-approved card, we are nothing more than another address that met the preliminary marketing criteria. As depressing as a rejection from a credit card company is, it is a good reminder to take a look into our credit report and make sure all is well. If you are getting rejected, there is a reason for it, and it is wise to know the details of your history so you can make corrections as quickly as possible. Fixing any problems now can save you headaches in the future, and you can aspire to finally receive that pre-approved offer that has eluded you in the past.

The first thing to keep in mind is that you are allowed, by law, to obtain a free copy of your credit report from the three major reporting agencies every year. At minimum, you should review your credit report for discrepancies or to discover any accounts that you did not open. If you’ve recently picked up your free annual credit report and have started to look it over, you may feel like they left out the secret decoder ring!

Understanding what all of that credit lingo means can be difficult. What is the difference between revolving and installment accounts? How does your rating affects your present and future financial well-being? What do you do if there is a problem with your report? Worse yet, how do you handle it if you discover someone has stolen your identity?

They say that our greatest fear is that of the unknown, but you can make that fear a thing of the past by requesting a copy of your credit report and getting to know what the major credit agencies are reporting about you. Knowing how to understand and manage your credit report can help you keep your credit score in a place that gives you better purchasing power and lower interest rates on everything you finance.

If you are confused about the information contained in your credit report, we invite you to speak with our credit specialists, who can help you decipher your credit report and provide you with a no-charge consultation. What to expect from your consultation:

• A thorough review of your credit reports.
• Learn about negative accounts, such as items in collections.
• Learn about positive accounts, like those in good standing.
• A discussion about how it all ties together & what affects your score. Who has requested your score, public records, new vs. established credit accounts and much more are all in the mix.

Learn:

• How long can negative items affect your rating?
• How can you improve your credit standing moving forward?

We also offer a variety of tools that can help you manage your finances and keep your credit under control. Whether you’re trying to pay down debt quickly or figure out which credit card to pay off first, our tools can help you decide what will be the best approach.

You can schedule a consultation with one of our specialists by calling 866-639-3426. Take control of your credit today!

An improved or repaired credit rating means more options for you. How are you planning to spend your return? Approximately 84% of Americans are planning to invest their check from Uncle Sam this year in assets that add to their worth – cars and other major purchases.

Due to recent home market trends, more people are renting houses. A good credit score can put you in a position to buy a home – either for yourself or as a way to create extra income by renting it out to others. Great deals on homes can be found all across the country these days, and a healthy down payment can increase your monthly returns by making payments more manageable.

Using your tax return to purchase an automobile may be an option as well. Most car dealers salivate over the opportunities tax time presents, even offering to do your taxes right there at the showroom so that you can use the refund to make your down payment.

Using your tax refund to make down payments on large purchases provides you with two possible benefits: a lower and more manageable monthly payment, or the ability to buy more than you would have been able to afford otherwise.

A down payment will not, however, affect the interest rate you are able to get for the items you finance.

Your credit score is what determines the interest rate on the loans you obtain. That single number can have more to do with your overall purchasing power than any other number. The credit report will directly affect how much you will ultimately spend on interest. Can a down payment improve the amount that you pay in interest, too? Yes. While it will not lower your interest rate, it can significantly cut the total amount that you have to finance.

A down payment is basically discretionary funds used to pay on the principle of a loan up front. When coupled with a good credit score, it can put you in a position to make some seriously good choices for your life. If you’re credit is suffering or in need of repair, you’re often wise to wait on the purchase and use your tax refund to pay down your credit debt so that you can improve your score.