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Personal & Financial

Debt, Credit, Student Loans, Buying a House . . . Where Do I Start?

Debt, Credit, Student Loans, Buying a House . . . Where Do I Start?
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The 2020 ABA YLD Law School Student Loan Debt Survey Report examines the issues at the heart of the student loan crisis and offers recommendations. Read the report.

Financial stress is one of the biggest issues facing Americans. The effect financial stress has on workplace productivity, relationships, and health is staggering.

In a 2018 survey, PricewaterhouseCoopers says that companies lost $300 billion a year due to employee financial stress.

According to, between 41 percent and 57 percent of divorces are due to finances.

Finally, 70 percent of illnesses are attributed to stress, with money being the top stressor according to an American Psychological Association 2015 report.

Many young professionals are not able to buy a house or are putting off marriage due to overwhelming debt issues, including student loans, credit cards, and other types of debt.

Much of this stress is for debt that is already owed, so lecturing on financial literacy or implementing financial wellness programs is not helpful in solving the problem and often makes people feel worse for not knowing this information before taking on the debt. People need advice on what they can do with their debt, help in creating a plan, and an understanding of their rights and options. I call it debt and credit strategy, and I have created an entire practice area around advising, consulting, and educating on debt options.

Financial Advisors

For the most part, financial advisors get very little training on options for debt and credit issues. A certified financial planner has about three hours of training on budgeting as part of the curriculum before taking the exam. As budgeting is one of the options available, it tends not to be a comprehensive review of available options and financial advisors cannot give legal advice.

A financial advisor, however, is very useful for planning for the future (life after debt!). Investment strategies, retirement accounts, and saving for large purchases are all areas where a financial advisor is a huge resource. Find a financial advisor who can explain to you exactly what they can help with, what their fees are, and how their process works. Some advisors charge a flat fee to prepare a plan. Other advisors sell insurance products and get paid if they sell you insurance. If you are offered a free plan, chances are the advisor makes money if they convince you to buy various policies from them.

Student Loan Experts and Credit Attorneys

First, if you are like most of us and have student loan debt, make sure you know all your options when it comes to federal loan repayment plans, forgiveness, and defaulting. There are lots of different repayment plans, with varying lengths of payments until the balance is forgiven, and then there are some plans with tax consequences and some that avoid taxing the forgiven amounts. Talk to a student loan expert if you are confused about what you should be doing with your student loans. There are times that just paying it off is the right option and other times where a different strategy should apply. Every situation is different and one slightly different fact may create a whole new strategy for you.

Second, if you have other types of debt, such as credit cards, personal loans, medical bills, or other unsecured debt, get your list of debts together and create a plan. If you can pay it all off as is, great. If you need advice because making minimum payments is all you can afford, talk to a debt and credit attorney to find out about options like consolidation, settlement, bankruptcy, or a combination of solutions. The most common phrase I hear in my office is, “I didn’t know.” As in, “I didn’t know I had any options,” or “I didn’t know that there were ways for me to relieve some of the financial pressure,” or “I wish I would have known about these options a long time ago.”

Choosing Professionals

When finding and choosing professionals to help you deal with debt and credit problems, consider the following:

  • What services are they offering? Check to see what the professional is offering and if that type of service meets your needs.
  • Do they sell products or services? Just a cautionary note that if you sign up for a free consultation, selling you on a product or service is the goal. Whether it is insurance, debt settlement, refinancing, or some other strategy, free consultations are to sell you on whatever they are offering.
  • Are they explaining all your options or only the options they sell? If you are talking to a salesperson on the phone, chances are they have a good script aimed at signing you up for their service, rather than explaining the different routes you can take and the pros and cons of each option.
  • Do they have good reviews? This is a little hard because most people do not want to admit they have debt or credit problems. It can be difficult to find actual reviews from clients because no one wants to admit to the world (and online) that she had to consult with someone about her debt and credit problems.
  • Do you feel pressured? I often hear from clients that they signed up for some program because they felt pressured and did not know how to say no. If the professional is coming on too strong, find out why and ask for a second opinion.

One final piece of advice: If it sounds too good to be true, it probably is. I have very smart clients who have fallen for some of the misleading advertisements for pennies on the dollar to resolve tax and credit card debt. Be careful who you hire, but know that the right professional can make all the difference in your financial future.