Category: Financial Stories

Student Loans

Posted on by Jordan Rumanek

Student Loans – Good or Bad?Student Loan in Bankruptcy

In years gone by a student going to university had a part-time job or at least a full-time job during the summer to help finance his tuition and other costs.  If your parents could help, great, if not there were a few scholarships and bursaries that you would try to get.  If a student could not afford to go to university, they would apply to a college or trade school where you could earn some money as an apprentice while you studied.

Times change.  Now, there is a sense that every person is entitled to a university education regardless of whether they can afford it or not.  The Federal and Provincial Government have now set aside hundreds of millions of dollars to assist those students whose ability to pay tuition, even with help from parents, falls short of the actual tuition costs.  That is the good part –  money is available to those who need it.

However, there are those students who apply for and receive Canada or OSAP (Ontario Student Assistance Plan) funds that are more than they need for tuition.  I understand that at age 17-18, there has been little financial training in your life for budgeting and you really want that TV, lap top, Canada Goose jacket or trip to Fort Lauderdale at spring break.  And, hey, the loan is interest free and it is several years until you graduate and have to start paying it back.  That is the trouble.  Over the years at school, you can build up a huge debt so that when you do graduate and find a job, you are saddled with debt payments which will take many years to pay off.  And this is the time when you are building a personal relationship with someone and starting a life career.

We do not advocate taking the loans that you do not need.  We do ask that you consider the long term effect of taking a loan higher than you actually do need.  This is not “play money” like when you were a child.  This is real money that will eventually have to be paid back by yourself with interest.  Decide wisely what is in your long term best interest.

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.  

Credit Reports, Marriage and Divorce

Posted on by Jordan Rumanek

Credit Reports, Marriage and DivorceDivorce Bankruptcy

Marriage:

Many people believe that when they get married or even live common law with a partner that their credit reports merge together and there is now only one credit report for the couple. In fact, each person continues to have his own credit report based on their individual history.

Problems usually arise when one of the partners in a marriage asks the other to guarantee or otherwise co-sign a debt.  This now becomes a joint obligation of both partners.  If payments are late or not made at all, this information shows up on both credit reports.  The result is the bad information reduces the credit score of the spouse who has a good credit record.

Divorce:

Just as when you got married, there was no merging of your credit reports, so it is when you separate and divorce.  Good or bad, your credit report is yours alone.  The problem on separation and divorce is that you might have co-signed a loan, had a joint loan, had a spousal (supplementary) credit card while you were together, etc., all of which will effect your credit report if your ex-spouse does not pay the debt in full after you split.

If you are in the process of separating, or even thinking of it, a little advance planning should be considered.  First, find out which of your partner’s debts you are responsible for.  Obtaining a copy of your own credit report may be helpful in determining this.  Encourage your partner to pay off those debts that you are responsible for, before they pay their own individual debts.  If possible, have them transfer the “joint” debt to a debt that you are not responsible for.  A transfer of a joint debt of a high interest rate credit card to a low interest rate individual credit card may be possible without arousing any suspicions.  The end result is that you will protect your own credit report.

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form, to learn more please visit our YouTube. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.

Student Credit Card Debt

Posted on by Jordan Rumanek

BankruptcyStudent Credit Card Debt

University students will often receive unsolicited and/or pre-approved applications for credit cards. Perhaps financial institutions specifically target students to apply for credit cards? It is a tempting offer for someone on a tight budget who needs the extra cash for books, pub night or a pizza delivery. The cards usually have a low limit of about $1000.00 so it is not a “big deal.”

However, banks are not targeting students to be “nice”. They want to be the one of the few credit cards that you have in your wallet because after you graduate and start your career the card limit can be increased. In the meantime, financial institutions rely on students only making small or minimum monthly payments on balances. Not only do students usually only pay minimum payments, they also don’t usually think about the extra interest they are paying on top of the original balance. In other words, financial institutions make more money from minimum payments each month. Be cautious, look at the interest rate and look beyond the advertised low introductory rate.

We live in a “plastic society.” There is nothing wrong with having a credit card for emergencies and for large cash purchases. Just make sure that you stay financially responsible, pay off your monthly balance every month and use credit wisely. Be financially responsible now and you will reap the financial rewards in the future.

Stay Financially Savvy.

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.

Student Loans and Grants Problems

Posted on by Jordan Rumanek

Student Loans & GrantsAre Student Loans Needed?

It is most often true that the higher your level of education is the higher your income will be in the future. The trouble is that education in Ontario takes time and costs money. If your family pays the education costs, wonderful, but that is not the case for most students. For the student that has to pay for all or part of their education costs in Ontario and do not want to have a significant debt load on graduation there is help available. Prepare a budget showing what your tuition, books and living costs are for the year and then look how to pay for it. Help can be obtained from the school’s financial aid office/the internet or the personal banker at your local bank. If you do get a student loan do not treat it as a piggy bank for vacations, clothes or partying. It was borrowed for education- use it for that purpose. Consider getting a part-time job. Just make sure that you balance the working hours and school hours so that one does not affect the other. Before borrowing the student loan see if there are any grants, bursaries or prizes available for your course. Some companies in Ontario will sponsor you at university and provide summer jobs if you agree to work for them after graduation for a couple of years.

Beware of the credit cards that are mailed to students during the year. They usually have an attractive low introductory interest rate but they also have to be paid each month.

After you graduate the student loans need to be repaid. In Ontario, OSAP loans are repayable starting six months after graduation (12 months if you are working in a not-for-profit job). If it has taken too long to get a job or if you are only able to find a low paying job it is likely you will get into trouble and not be able to make you payments. ASK FOR HELP! Whether you owe student loans, credit cards or bank loans, if you have a problem making the monthly payments, phone the institution involved, explain what is going on and ask if they can help you. In most cases you will be pleasantly surprised that they will set up a reduced repayment plan with you which may even allow for a grace period of “interest only” if you have not yet, reached your income potential.

Contact Rumanek & Company Ltd. for more information on bankruptcy in Ontario and debt solutions. Please fill out the bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt in Ontario for more than 25 years.

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