July Financial Household Resiliency Series
*Tuesday, July 2nd 5:30-7:30 pm: Making Ends Meet
*Tuesday, July 9th, 5:30-7:30 pm: Budgeting and Saving
*Tuesday, July 16, 5:30-7:30 pm: Hands-On Banking
*Tuesday, July 23rd, 5:30-7:30 pm: Building, Repairing, and Protecting Credit
|Stay tuned for our next Innovative Connections Issue on:|
BACK TO SCHOOL (SO SOON?!)
|For Past Issues of Innovative Connections|
The "Great Recession" resulted in a rash of bankruptcies. But it doesn't take an global economic meltdown to make people consider bankruptcy as an option. In this issue of Innovative Connections, we'll examine the practical issues and considerations around this controversial topic. First, we will look at some of the reasons why bankruptcy remains stigmatized and why it probably shouldn't be. Then we will go into:
Also, we're are in the process of enrolling new IDA applicants, so come to our last orientation of the summer on June 27th! And, we are excited to announce that we are hiring two Americorps VISTAs for the upcoming year. Read more about that position here and spread the word to help us find great applicants!
|Why Is Bankruptcy So Stigmatized?
For many in America today, bankruptcy is the elephant in the room. Everyone knows it's there. Storied companies like Chrysler and General Motors have experienced it. In Oregon, annual non-business bankruptcy filings more than doubled between 2007 and 2010. Still, few people want to talk about it. Why?
The stigma against bankruptcy isn't new. For centuries, people who have gone bankrupt have been characterized as irresponsible and selfish. In 1542, England passed the Statute of Bankrupts, criticizing bankrupt people for "craftily obtaining" money and not paying it back "against all reason...and good conscience."
On top of this, we live in a society where people believe that hard work will be rewarded. People don't like to say, "I'm struggling financially." If they do, they're often criticized for not having worked hard enough. Declaring bankruptcy, in this light, is seen as a personal failure-for making promises and not doing enough to keep them.
Of course, the reality is more complicated than that. People go bankrupt because they have a medical emergency that their insurance doesn't provide sufficient coverage for. They lose their jobs in a bad economy. An unexpected natural disaster strikes. Those who never thought it would be an option consider filing for bankruptcy just to begin to get their finances back in order.
Bankruptcy is not for everyone, which is why it's important to do your homework. But it's important to remember that filing for bankruptcy is a personal choice. What works for some-whether that means filing for bankruptcy or not-may not work for others.
By Landra Glover and Deanna Oothoudt
|When to Consider Bankruptcy
Anyone considering bankruptcy needs to carefully consider the ramifications. Bankruptcy proceedings require debtors to appear in court: the resulting record is publicly accessible. A bankruptcy stays on a debtor's credit report for 10 years, negatively affecting one's ability to obtain credit, employment, and housing.
That said, under what circumstances should one consider bankruptcy? Consulting a bankruptcy attorney is advisable under the following circumstances:
- Failure of debt management or settlement options: when managing your debt has become too overwhelming and negotiation and communication with creditors has not proven to be successful.
- Foreclosure: a legal process in which the lending institution forces the sale of a collateralized asset to recover monies owed. Foreclosure is typically associated with homes.
- Insolvency: an inability to repay debts due to negative net assets (i.e., liabilities exceed assets).
- Judgments and Lawsuits: a legal action initiated by a debtor to recover monies due. Bankruptcy proceedings may end a collection lawsuit.
The decision to file for bankruptcy demands due consideration. Factors to consider include the current economic climate, personal financial situation, personal goals, and the potential relief provided by bankruptcy.
By Elaine Lord
Chapter What? Deciphering Between the Two Main Types of Bankruptcy
There are two main types of personal bankruptcy out there: Chapter 7 and Chapter 13. They each function very differently, and it's best to talk to a lawyer about what is right for you. Here are some key differences between the two:
- What it is: You are asking the courts to discharge or cancel all eligible debt that you owe.
- Effect on your property: If you have property that is non-exempt, it can be liquidated and sold to pay some of what you owe to creditors. If all your property is exempt, then this is not something you need to worry about. You can read more about what is exempt and non-exempt here.
- Cost and time: The process of filing a Chapter 7 bankruptcy takes four to six months; the filing fee costs $306 in the state of Oregon (plus lawyer costs) and usually takes just one trip to the courthouse.
- What it is: you enter into a payment plan at the court to pay back all or a portion of your debt over time. Your payment amount is based on your income, types of debt, and amount of property that you own.
- Effect on your property: You are not in danger of losing your property in a Chapter 13 because you are slowly repaying your debt.
- Cost and time: The filing fee for a Chapter 13 in Oregon is currently $281, but the process is longer than a Chapter 7 since you are paying debt back over time. This may mean more lawyer costs.
Debt that cannot be discharged in a bankruptcy includes student debt (private and federal), taxes and tax liens, alimony and child support, fines and restitution, and debt incurred through fraud.
By Talia Kahn-Kravis
Photo by Images_of_Money
Affordable Legal Resources for Bankruptcy Help
Lewis & Clark Pro Bono Legal Clinic
Students from Lewis & Clark Law School work under the full-time supervision of practicing attorneys to help clients with issues including filing for bankruptcy.
Not accepting clients for the legal clinic until August 1.
Legal Aid Oregon
A nonprofit organization that provides representation on civil cases to low-income clients throughout Oregon.
Not accepting clients for the legal clinic until August 1.
Lawyer Referral Services
$35 for a consultation visit with an Oregon Bar Attorney, then you negotiate fees with the attorney after that.
503-684-3763 or toll-free in Oregon at 800-452-7636.
|Building Credit After Bankruptcy
If you've had to declare bankruptcy, there are concrete steps that you can take to get your finances back on track:
Research New Credit
After bankruptcy, many report being bombarded with offers for new credit cards. The good news is that you'll have access to the credit you'll need to begin rebuilding your credit history. The bad news is that many of these offers come with high interest rates, fees, and other negative features. If you decide to take out new lines of credit be sure to ask about interest rates, fees, features, credit limits, and other items that are important to you. Making a chart can help you compare products, and don't be afraid to ask for help!
If you don't qualify for a credit card, consider using a secured credit card. It is very similar to an unsecured credit card, except you provide a deposit up front. The way you use your secured credit card is typically reported to all three credit bureaus, so your hard work can have a big impact on your credit history. Typically, after a year of responsible use, your deposit will be returned to you.
Another option is taking out Innovative Changes' Credit Builder Loan. This is a secured loan that gives you a jumpstart to rebuilding your credit at a low monthly cost. You are eligible to take out a Credit Builder Loan if you have taken all 4 of our Financial Household Resiliency workshops or are referred by a referring partner or a current/past IC$ borrower in good standing. Read more about our Credit Builder Loan here.
Once you have a new line of credit be sure to:
Pay On Time
Paying on time is the most important factor in your credit score. Keeping bill due dates on a calendar or using auto-payment can help you pay on time and stay on budget. If you prefer online tools, Mint and many others have great bill reminder tools.
Keep Balances Low
Thirty percent of your credit score is how much credit you use compared to your available credit. Although every creditor is different, they typically like to see no more than 30 percent of your available credit used. So if your new credit card has a limit of $300, you would want to spend no more than $90.
Check Your Credit Report
Knowing what is on your credit report is important for us all, but it is especially important for those trying to rebuild credit. Continue to get your free reports from annualcreditreport.com, and be sure to dispute any errors. You can always make an appointment to pull and review your free credit report at Innovative Changes by calling: 503-249-5205.
By Cassie Russell Rupar
Last IDA Orientation of the Summer!
We are thrilled to announce that we are opening enrollment for our Individual Development Account (IDA) program this June. The IC$ IDA program offers a 3:1 match for those saving to attend an institution of higher education. Savers must put at least $25 into an account every month, complete financial education requirements and plan to go back to school or already be attending school. Savers can save for themselves or a loved one.
If you are interested in the IDA program, or know someone who may be interested,come to our next orientation which will be:
Register for an orientation here or call Misha at (503)-249-5205. For more information about the IDA program visit our website.
- Thursday, June 27th, 5:30-6:30pm at our office in Suite 2010 of the Lloyd Center.
| We're Hiring Two Americorps VISTAs!
This summer Financial Opportunity Corps VISTAs from ten locations throughout the country will come together to undertake intensive training in financial coaching and return to their communities to develop volunteer coaching programs. Innovative Changes was lucky to be chosen byPoints of Light sponsored by Bank of America as one of the Financial Opportunity Corps host sites. Through this grant, we will be hiring not one, but two AmeriCorps VISTAs!
These year-long AmeriCorps VISTA positions go from August 19, 2013- August 22, 2014. The VISTAs will be responsible for improving our current volunteer training guides and materials, establishing an online portal of resources for coaches and coachees and creating a network of community financial coaches.
The application deadline is June 24th! To find out more about the position and how to apply, click here.
Financial Education Galore
Upcoming Financial Household Resiliency (FHR) Workshops:
July Financial Household Resiliency Series
Tuesday, July 2nd, 5:30-7:30 pm: Making Ends Meet
Tuesday, July 9th, 5:30-7:30 pm: Budgeting and Saving
Tuesday, July 16th 5:30-7:30 pm: Hands-On Banking
Tuesday, July 23rd 5:30-7:30 pm: Building, Repairing and Protecting Credit
These classes will be held at our Lloyd Center office on the 3rd floor of the Lloyd Center Mall (between Nordstroms and the food court), 2010 Lloyd Center.The classes can be taken individually or as a series. They are $5 each and $15 for all four classes. Fee waivers are available for those who qualify. Register here or call or email Misha at (503)-249-5205/ firstname.lastname@example.org.
Teaching Kids About Money
Sunday, July 14th, 3-4pm at the Capitol Hill Library
Tackling Student Loan Debt
Monday, July 15th, 6:30-7:30pm at the Holgate Library
These seminars are free and no registration is required. Visit our website for a description of our seminars.
|For Our Borrowers|Are You Receiving Your Payment Reminders?
If you chose to receive your payment reminders by email, make sure that they are coming to your inbox and not your junk mail. If you would like to change the way that you receive reminders (by mail, by email, or by phone call) let us know! Call Misha at 503-249-5205
. How to Make Your Loan Payment
- You can mail your payment by check or money order to Innovative Changes, 2010 Lloyd Center, Portland, OR 97232.
- You can sign up for us to automatically deduct your payment from your bank account each month. Contact us if you would like to do this at 503-249-5205.
- You can drop off your payment (check, money order, or cash) at the Lloyd Center, 3rd Floor, Suite 2010 (2010 Lloyd Center Mall, Portland, OR 97232) Mon-Fri, 9 am-5 pm, or drop it through our mail slot on other days/times.
- You can also pay via PayPal by following directions on our website here. Please note, it asks you to fill in a donation amount, but this is not a donation, it will go towards your loan payment.
We Are Here to Help!
Are you having trouble making your payment this month, or afraid that it might be a little late? Let us know! We understand that unexpected events and expenses can make it hard to keep your finances on track, and Innovative Changes wants to be there for you in such cases. Innovative Changes is flexible and willing to work with our borrowers to satisfy loan obligations, and in return we ask for honest and timely communication. Remember, if you know your payment is going to be late, let us know ahead of time and we might be able to avoid charging a late fee or sending out a late notice.