Loans And Credit

  1. I'm currently completing my pre-req's at a local community college and working part-time. My credit at this point is horrible and I am thinking of filing bankruptcy so that I may have the chance to rebuild it in time for nursing school. I am hoping that I will not have to work while in nursing school and I am afraid my credit may hinder my abililty to obtain student loans. What do you guys think? Is this a bad idea? I am married and have two small children, ages 2 and 7, and we are just making enough to get by. My situation will not be changing at least for another 4 years I HOPE!!
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  2. 17 Comments

  3. by   mvanz9999
    It takes a long time after bankruptcy to rebuild your credit. Years and years, despite what the "bankruptcy credit gurus" are telling you.

    I don't think anyone is going to advise you for or against it. That's something you have to discuss with your family and an attorney. It's something that you WILL feel for many, many years after you file.

    I don't know what kind of loans you are looking for, but I don't believe federal loans consider credit status. You cannot get federal loans forgiven in bankruptcy. You MUST repay federal loans. I'm certain they don't consider any credit scores. To them, you are not a threat, since you cannot get them dismissed in any court, ever.

    Non-federal loans will take into consideration your credit score. I have no idea what minimum limits are, or any of those details.
  4. by   destined2bCRNA
    Direct Loans (federal loans) have nothing to do with your personal credit; they are just based on need. Also, be careful with the bankruptcy (not because they're bad- because they're actually not as bad as people think they are), but because of the timing for when you are to start your program. If your bankruptcy is not discharged at the time you need your aid, it will remain on hold until it is discharged. That is because all creditors have to be listed in the bankruptcy (all though student loans will not actually be covered in the bankruptcy) and so it kind of "freezes" your aid until the bankruptcy is discharged (4-6 months).
  5. by   MereSanity
    Student loans cannot be discharged thru bk...although student loans are a different kind of "debt"...you can get aid according to need, federal loans and scholarships both. If you have filed bk you will be more likely able to qualify for aid and a student loan (who could turn down a persons need to MAKE more money and not file again in the future). Yes, bk is bad...however, sometimes it is necessary. Just be informed...study up on it...here's a WONDERFUL link (not selling anything)...it's the bankruptcy forum...good luck!

    http://chat-cards.com/wwwboard/bankruptcy/messages.html
  6. by   Jules A
    I've also heard that prospective employers look at your credit report but I don't really know the chances of a bad credit report causing someone not to get the job. If you are having financial trouble I don't understand why you would be willing to quit working. Even if you can only work part-time its better than a blank, imo.
  7. by   mvanz9999
    Quote from Jules A
    I've also heard that prospective employers look at your credit report but I don't really know the chances of a bad credit report causing someone not to get the job. If you are having financial trouble I don't understand why you would be willing to quit working. Even if you can only work part-time its better than a blank, imo.
    It's not that you will quit. The theory is that people with bad credit are more likely to steal, accept bribes, or have other financial troubles that will affect job performance. This isn't actually the case - I have read that credit scores are not a good predictor of workplace theft, but don't count on businesses using common sense.

    There has been a law passed that states an employer may not use bankruptcy as a reason not to hire someone. But they can still use bad credit. If the reason you are filing is because of being unable to pay bills, and you have bad credit, then the bankruptcy law is kind of pointless.
    http://www.law.cornell.edu/uscode/ht...5----000-.html

    I also know that bankruptcy laws have changed, and I don't know that you will be able to file Chapter 7. With Chapter 13, I suspect you are better off not filing, or just doing what a Chapter 13 is yourself.
  8. by   xt1
    exactly, you will be able to get loans based on need instead of based on credit... and as a sneaky trick you can take all the extra money that you dont exactly need, place it in a savings account, take a secured loan against, put that money into a checking account, and have the payment automatically drafted from the checking account for the loan. Do this every time you get another loan and by the time you graduate school you'll have taken out and payed back several loans of a peroid of time long enough to bring your credit score up. ;D
  9. by   curlysue82
    Thank you guys for all the advice. Just to clarify some things - I do not have any previous student loans on my credit and I am aware that if I did that they could not be settled through bankruptcy. I just have some credit cards, medical bills, and a repo on a car that I co-signed for an ex-boyfriend (I know..STUPID). My problem was and is that I don't make enough money to cover my living expenses and still make payments on these things. These bills have been outstanding for several years already and I feel by filing bk I can have a better chance to rebuild my credit rather then waiting another 4 years until I am done with school to try and pay-off this old debt along with whatever else I incur in loans while I am in school. Again thank you for the great advice, I will take it all under consideration.
  10. by   jov
    [quote=curlysue82;2045278]
    Curlysue,
    I know you said My problem was and is that I don't make enough money to cover my living expenses and still make payments on these things.... which is not true!! Your problem is you spend more than you make!! LOL!!

    These bills have been outstanding for several years already and I feel by filing bk I can have a better chance to rebuild my credit rather then waiting another 4 years until I am done with school to try and pay-off this old debt along with whatever else I incur in loans while I am in school.

    Until you get your spending under control and develop better money management skills, including deferred gratification LOL, neither bankruptcy nor an RN license will fix the problem!! LOL!!
  11. by   destined2bCRNA
    CurlySue, no I don't think you spend more money than you make. I know and understand exactly what you're talking about which is why I gave you the advice that I did. I did stupid things for an ex (worked 70 hours a week to put him through barber college, financed the opening of his barber shop, etc) with the understanding that I was to go to med school after the business got up and running while he watched the kids since he had his own business. Well, to make a long story short, he up and ran with the business, lol. So over the past 4 years I have been struggling and I spend next to NOTHING. I'm wearing the same 1 pair of gym shoes that I've had for 2 years! So it's not my spending now that places me in trouble, it's the ghost from my spending past. Maybe it's not realized to some that these ghosts follow you into the future until they are settled in some manner. They don't go away because you've changed your ways. I feel ya. And, I know that you don't have any loans on your credit as of yet; let me clarify what I was saying in my earlier post. Because I considered the same thing (filing bankruptcy), I was blessed enough to have a caring financial aid director explain to me about the effect it could have on my aid, which is the timing I tried to explain. It has nothing to do with credit or a previous loan on your credit; it just "freezes" the release of your aid until the bankruptcy is discharged. Contact your Financial Aid Administrator. Maybe they can explain it better than me? I'm rootin for ya!
  12. by   destined2bCRNA
    Oh, yeah- listen to XT1- they know what they're talking about!
  13. by   curlysue82
    Thank you so much for your reply. It took me a few days of thinking about what you had said before I got it..LOL. I was only thinking of the aid I would need for a nursing program not what I would need next semester. I totally understand now and am actually scheduled to talk to my financial aid director today. Also, thank you for your understanding. It is definitely not my spending habits; it's the ghosts of my past. In fact I drive a beat up 94 Pontiac grand prix that barely gets me around and still wear clothes that I have from high school 6 years ago. Luckily I can still fit into them I don't think anyone should criticize if they don't know the other persons situation. I was young and stupid and thought this guy would be around to help me the way I helped him. I guess some of us have to learn the hard way and I have. THANKS AGAIN!!
  14. by   destined2bCRNA
    Sounds like we're in the same boat. You almost made me cry curlysue I know how it feels to not have anyone understand and also critisize you. But I'm so happy that you're taking the opportunity to improve your life! We shouldn't be punished forever for earlier stupidity. Stay positive! Stay focused! My nursing program just sent me a "rules & regulation" type packet and in bold type it stipulated that students are not to work over "8-10" hours per week. I have 5 kids of which I get no support for 3 (they can't find him) and a total of $70 per week for the other 2 (the one I exemplified my stupidity with who owns a profitable barber shop). And still I kept my grades up and got accepted to the #1 Nursing College in Illinois- Woohoo!!!! And all this was while being showered with negativity from EVERYONE. Don't worry about what you have to pay back (within reason). Most RN programs include a cost of living into the aid package. This is the only reason that I am able to go to college. They include my living expenses (which cover my rent) as well as transportation, tuition, etc. I've heard about the difficulty of the nursing program and since I plan to pursue my education beyond a BSN (I want to be a Nurse Anesthetist) that requires an almost flawless GPA, I plan to utilize every advantage possible to be able to just concentrate on my studies. It's worth having to pay back what I consider a minute amount of money in comparison to the rewards I will receive in the end. Stay positive girl! And let the negativity roll off your back. You'll be the one laughing in the end.

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