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Can I Inherit Debt?
When someone passes away leaving debts behind, you might be wondering if you have any personal liability to pay them. If you have aging parents, for instance, you may be worried about having to assume responsibility for their mortgage payments, credit cards or other debts. If youâve asked yourself, âCan I inherit debt?â the answer is typically no, even though those debts donât automatically disappear. But there are situations in which you may have to deal with a loved oneâs creditors after theyâre gone.
How Debts Are Handled When Someone Passes Away
Debts, just like assets, are considered part of a personâs estate. When that person passes away, their estate is responsible for paying any and all remaining debts. The money to pay those debts comes from the asset side of the estate.
In terms of who is responsible for making sure the estateâs debts are paid, this is typically done by an executor. An executor performs a number of duties to wrap up a personâs estate after death, including:
- Getting a copy of the deceased personâs will if they had one and filing it with the probate court
- Notifying creditors and other entities of the personâs death (for example, the Social Security Administration would need to be notified so any Social Security benefits could be stopped)
- Completing an inventory of the deceased personâs assets and their value
- Liquidating those assets as needed to pay off any debts owed by the estate
- Distributing the remaining assets to the people or organizations named in the deceased personâs will if they had one or according to inheritance laws if they did not
In terms of debt repayment, executors are required to give notice to creditors who may have a claim against the estate. Creditors are then giving a certain window of time, according to state laws, in which to make a financial claim against the estateâs assets for repayment of debts.
If a creditor doesnât follow state guidelines for making a claim, then those debts wonât be paid from the estateâs assets. But if creditors are less than reputable, they may try to come after the deceased personâs spouse, children or other family members to collect whatâs owed.
Not all assets in an estate may be used to repay debts owed by a deceased person. Any assets that already have a named beneficiary, such as a life insurance policy, a 401(k), individual retirement account, payable on death accounts or annuity, would be transferred to that beneficiary automatically.
Can I Inherit Debt From My Parents?
This is an important question to ask if your parents are carrying high amounts of debt and youâre worried about having to pay those bills when they pass away. Again, the short answer is usually no. You generally donât inherit debts belonging to someone else the way you might inherit property or other assets from them. So even if a debt collector attempts to request payment from you, thereâd be no legal obligation to pay.
The catch is that any debts left outstanding would be deducted from the estateâs assets. If your parents were substantially in debt when they passed away, repaying them from the estate may leave little or no assets for you to inherit.
But you should know that you can inherit debt that you were already legally responsible for while your parents were alive. For instance, if you cosigned a loan with them or opened a joint credit card account or line of credit, those debts are legally yours just as much as they are your parents. So, once they pass away, youâd be solely responsible for repaying them.
And itâs also important to understand what responsibility you may have for covering long-term care costs incurred by your parents while they were alive. Many states have filial responsibility laws that require children to cover nursing home bills, though they arenât always enforced. Talking to your parents about long-term care planning can help you avoid situations where you may end up with an unexpected debt to pay.
Can I Inherit Debt From My Children?
The same rules that apply to inheriting debt from parents typically apply to inheriting debts from children. Any debts remaining would be paid using assets from their state.
Otherwise, unless you cosigned for the debt, then you wouldnât be obligated to pay. On the other hand, if you cosigned private student loans, a car loan or a mortgage for your adult child who then passed away, as cosigner youâd technically have a legal responsibility to pay them. Federal student loans are an exception.
If your parents took out a PLUS loan to pay for your higher education costs and something happens to you, the Department of Education can discharge that debt due to death. And vice versa, if your parents pass away then any PLUS loans they took out on your behalf could also be discharged.
Can I Inherit Debts From My Spouse?
When marriage and money mix, the lines on inherited debt can get a little blurred. The same basic rule that applies to other situations applies here: if you cosigned or took out a joint loan or line of credit together, then youâre both equally responsible for the debt. If one of you passes away, the surviving spouse would still have to pay.
But what about debts that are in one spouseâs name only? Thatâs where itâs important to understand how living in a community property state can affect your liability for marital debts. If you live in a community property state, debts incurred after the marriage by one spouse can be treated as a shared financial obligation. So if your spouse opened up a credit card or took out a business loan, then passed away you could still be responsible for paying it. On the other hand, debts incurred by either party before the marriage wouldnât be considered community debt.
Consider Getting Help If You Need It
If a parent, spouse, sibling or other family member passes away, it can be helpful to talk to an attorney if youâre being pressured by debt collectors to pay. An attorney who understands debt collection laws and estate planning can help you determine what your responsibilities are for repaying debts and how to handle creditors.
The Bottom Line
Whether or not youâll inherit debt from your parents, child, spouse or anyone else largely hinges on whether you cosigned for that debt or live in a community property state in the case of married couples. If youâre concerned about inheriting debts, consider talking to your parents, children or spouse about how those financial obligations would be handled if they were to pass away. Likewise, you can also discuss what financial safety nets you have in place to clear any debts you may leave behind, such as life insurance.
Tips for Estate Planning
- Consider talking to a financial advisor about how to manage and pay off debts you owe or any debts you might inherit from someone else. If you donât have a financial advisor yet, finding one doesnât have to be difficult. SmartAssetâs financial advisor matching tool can help you connect with an advisor in your local area. It takes just a few minutes to get your personalized advisor recommendations online. If youâre ready, get started now.
- The Fair Debt Collection Practices Act caps the statute of limitations for unpaid debt collections at a maximum of six years, although most states specify a much shorter time frame. However, some debt collectors buy so-called zombie debts for pennies on the dollar and then â unscrupulously â try to collect on them. Hereâs how to deal with such operators.
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Source: smartasset.com
The Average Salary of a Pilot
The job of an airline pilot has a certain glamour to it. However, unconventional working hours and plenty of time away from home can be a recipe for stress and burnout. This could be why airline and commercial pilots are compensated fairly well, earning a median annual salary of $115,670. That one number doesnât tell the whole story, though, as it varies depending on whom you fly for and where youâre based.
The Average Salary of a Pilot
According to the Bureau of Labor Statistics (BLS), the median salary of the group the BLS calls airline and commercial pilots was $115,670 per year in May 2018. The BLS also tracks the job outlook for the careers it studies, measuring how many jobs the career will add between 2016 and 2026. The BLS job outlook for Airline and Commercial Pilots is 4%, which is about as fast as the average across all careers. According to the BLS, the U.S. will add 4,400 airline and commercial pilots between 2016 and 2026.
Where Pilots Earn the Most
When it comes to tracking state- and city-level earnings data, the BLS looks at commercial pilots and âairline pilots, copilots and flight engineersâ separately. Letâs take a look at where commercial pilots earn the most.
The mean annual wage for commercial pilots is $96,530 per year. According to BLS data, the top-paying state for commercial pilots is Georgia, where commercial pilots earn a mean annual wage of $130,760. Other high-paying states for commercial pilots are Connecticut, New York, Florida and Maryland. The top-paying metro area for commercial pilots is Hilton Head Island-Bluffton-Beaufort, SC, where the annual mean wage for commercial pilots is $128,600. Other high-paying metro areas for commercial pilots are Savannah, GA; Seattle-Tacoma-Bellevue, WA; Bakersfield, CA; Fayetteville-Springdale-Rogers, AR-MO and Spartanburg, SC.
Now letâs take a look at where airline pilots, copilots, and flight engineers earn the most. The top-paying state in this field is Washington, with a mean annual wage of $237,150. Other high-paying states for this profession are Michigan, Nevada, Oregon and California. Of the metro areas for which the BLS has data, the top-paying metro area for airline pilots, copilots and flight engineers is San Francisco-Oakland-Hayward, CA, with a mean annual wage of $247,120. Other high-paying metro areas for this field are Seattle-Tacoma-Bellevue, WA; Las Vegas-Henderson-Paradise, NV; Denver-Aurora-Lakewood, CO; Tampa-St. Petersburg-Clearwater, FL and Chicago-Naperville-Elgin, IL-IN-WI.
Becoming a Pilot
Typically, itâs easier to become a commercial pilot than an airline pilot. Because of this, many airline pilots start their career as commercial pilots. To be a pilot of any kind, youâll need to have a commercial pilotâs license from the Federal Aviation Administration (FAA). To be an airline pilot, youâll need an additional document known as a Airline Transport Pilot (ATP) certificate. This is also issued by the FAA.
In terms of education, you will need a high school diploma and a commercial pilotâs license to become a commercial pilot. To become an airline pilot, you will likely need a bachelorâs degree, although it can be in any subject.
The typical path to becoming a commercial pilot is to complete an FAA-certified flight training program. These are held both at independent flight schools and through colleges and universities. Once youâve assembled enough flying hours, you can get a job as a commercial pilot.
Regional and major airlines typically require significantly more flight experience for new hires. This is another reason why many people start out as commercial pilots and then move on to working for an airline. According to the BLS, many commercial pilot jobs require a minimum of 500 flying hours, whereas entry-level airline jobs require somewhere around 1,500.
Bottom Line
Have you ever flown out of an airport and wondered what it would be like to be a pilot? With an average annual salary of $102,520, pilots earn a good living. Not just anyone can become a pilot, however. Commercial pilots must earn a commercial pilot certificate, while airline pilots, copilots and flight engineers must earn the Federal Air Transport certificate and rating for the specific aircraft type they fly. Being a pilot is also a dangerous job, so itâs not surprising that pilotsâ compensation is high.
Tips for Saving Responsibly
- The median pilot salary is enough to live comfortably in most areas of the country, but itâs still important to make sure youâre saving some of that money for emergencies and retirement.
- A financial advisor can be a big help in managing your money and choosing smart investments that grow your nest egg. Finding the right financial advisor that fits your needs doesnât have to be hard. SmartAssetâs free tool matches you with financial advisors in your area in 5 minutes. If youâre ready to be matched with local advisors that will help you achieve your financial goals, get started now.
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How to Transfer Your 401(k) When Changing to a New Job: 401(k) Rollover Guide
Itâs easy to forget about old 401(k) plans when changing to a new job. Some people simply forget about it because the company that manages it never reminds them. Others didnât forget about their old account, but theyâve been putting off the rollover because it sounds hard.
Many companies donât make the process easy for customers to roll over their 401(k) accounts from previous jobs. But it can be worth the inconvenience.
By not rolling it over, you might be losing some serious cash. Thatâs rightâlosing money, so itâs easy to miss. Here are a few key reasons to prioritize a 401(k) rollover.
3 Reasons to Transfer Your 401(k) to a New Job
There are three main reasons to rollover a 401(k):
1. To reduce fees. If the fees are too high with your previous employerâs 401(k), rolling over a 401(k) can be advantageous.
2. To maximize your money. If you arenât happy with the investment options in your old 401(k) and your new employer accepts rollover 401(k)s, you might be able to save money while investing in a broader range of investment vehicles.
3. To streamline your investments. If you leave your 401(k) where it is, you may not think about it very often. Itâs important to keep tabs on all of your investments so you can make sure they are on track and appropriate for your time horizon and goals.
You May Be Paying Hidden Fees
There are all sorts of fees that go into effect when you open a 401(k), including recordkeeping fees, maintenance fees, and fund fees. Expressed in a percentage, these fees inform the expense ratio of a plan.
Employers may cover those fees until you leave the company. Once youâre gone, that cost might shift to you without you even realizing it.
Fees matter: When you pay a fee on your 401(k), youâre not just losing the cost of the fee; youâre also losing all the compound interest that would grow along with it over time. The sooner you roll your plan over, the more you could potentially save.
You Might Be Missing Out on Better Investments
401(k) accounts grow at different rates depending on which assets you invest in. If the retirement savings plan at your new companyâor an individual retirement plan (IRA)âoffers a selection of stocks and bonds that better aligns with your financial goals, it might be time to initiate a rollover.
The money thatâs sitting in your old 401(k) could potentially grow at a faster rate if you roll it over into a new plan or into an IRAâitâs certainly worth investigating the growth rates of each. Keep in mind that investors can lose money when investing, too, so it always makes sense to consider your personal risk tolerance when deciding how to invest your retirement accounts.
You Could Lose Track of the Account
Itâs not your fault, itâs just logistics. Itâs harder and more time-consuming to juggle multiple retirement accounts than it is to juggle one. Until you retire, youâll be managing two (or more) websites, two usernames and passwords, two investment portfolios, and two growth rates for decades.
And if you leave this next job to go to a third (or a fourth, or a fifth), the 401(k) plans could pile up, creating even more tracking work for you. Plus, when youâre no longer with an employer, you might miss alerts about changes that may occur with an old retirement plan.
What to do With Your 401(k) After Getting a New Job
While itâs generally allowed to leave your account in your former employerâs plan when you switch jobs, there are other options.
• Cash out the account. If you take this route and youâre younger than 59½ years old, you will owe taxes and might also owe early withdrawal penalties depending on how you use the money.
• Roll over the 401(k) account. You could roll the account into your new employerâs retirement plan (if allowed) or into an IRA.
Cashing Out Early
Should you choose to cash out your 401(k), you will have to pay taxes on the money, and perhaps an additional 10% early withdrawal fee.
That said, there are some circumstances when the 10% fee is waived (but not the income tax), such as when the funds will be used for eligible education expenses, certain medical expenses, or expenses related to a first-time home purchase, among other circumstances.
Rolling Over a 401(k) to Your New Employerâs Plan
The process of rolling over a 401(k) might seem intimidating or inconvenient at first, especially if youâre moving onto your second job and this is the first time youâll be rolling over a 401(k). In actuality, the actual process of rolling over a 401(k) isnât too complicated once youâve decided where your existing funds are going to go.
Advantages of Rolling Over Your 401(k)
Rolling over your 401(k) to a new plan can be advantageous to your overall financial plan. Here are a few ways this transition might be beneficial to your financial well-being.
One Place for Tax-Deferred Money
Transferring your 401(k) to your new employerâs plan can help consolidate all of your tax-deferred dollars into one account. Keeping track of and managing one account may simplify your money management efforts.
A Streamlined Investment Strategy
Not only does consolidating your previous 401(k) with your new 401(k) make money management easier, it can also streamline your investment strategies.
Financial Service Offerings
Some 401(k) plans offer financial services, such as financial advisor consultations, to help employees achieve their retirement goals. If your previous employer didnât offer this service and your new plan does, taking advantage of this offering may help you achieve an investment plan that meets your exact goals rather than a standardized option.
Access to a Roth Option
An increasing number of employers are offering a Roth 401(k) option in addition to the traditional 401(k) option. With a Roth 401(k), the money you contribute is after-taxâit doesn’t minimize your taxable income. But when you take distributions in retirement, you won’t have to pay taxes on the withdrawal amount. As long as the account has been open for five years and you’re over 59 ½, you can receive tax-free distributions.
A Roth 401(k) option can be appealing if you feel your income in retirement will be higher than your current income. If your new employer offers this benefit and you think it will be advantageous to your financial situation, then rolling over your 401(k) to a Roth 401(k) plan may make sense.
How to Roll Over Your 401(k)
So, how do you transfer your 401(k) to a new job? If you decide to roll your funds into your new employerâs 401(k), youâll most likely need to:
1. Contact the plan administrator to arrange the rollover. You may need to choose the types of investment you would like before you initiate the rollover. If not, you can take a lump-sum transfer and allocate the funds gradually to different investments of your choosing.
2. Complete any forms required by your employer for the rollover.
3. Request that your former plan administrator send the fund via electronic transfer or a check so you can move the funds directly to the administrator of the new plan.
Itâs possible that you might have to wait until your employerâs next open enrollment period to complete the rollover, but you might consider using that time to research the planâs investment options so youâll be ready when the time comes.
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Rolling Over a 401(k) Into an IRA
If you choose to roll your 401(k) funds into an IRA thatâs not employer-sponsored, a direct rollover is the method that takes most of the guesswork out of the transfer. This means that the funds will be taken from your previous account and rolled directly into the new account.
Doing it this way should avoid your previous lender sending you a check and resulting in any unforeseen early withdrawal tax situations.
Opening a new retirement account online is fairly straightforward, but there are some steps to opening an IRA that might be worth reviewing before you start. Once your funds are rolled over, youâll be able to choose the investments that work for your retirement goals.
401(k) Rollover Rules
When requesting a transfer, you may either select a direct and indirect rollover. With a direct rollover, the check is made out to the financial institution (for your benefit). Because the funds are directly deposited into the new account, no taxes are withheld.
With an indirect rollover, the check is payable to you, with 20% withheld for taxes. Youâll have 60 days to roll over the funds (80% of your previous plan) into an IRA or other retirement plan. If you want to contribute the full amount of your previous plan, you can add money to bring the lump contribution back up to the balance before rollover. At that point, youâd be able to count the 20% withheld as taxes paid.
The Takeaway
There are many benefits to rolling over a 401(k) after switching jobs, including streamlining your retirement accounts and directing your money so that it suits your individual financial needs and goals. While some may view it as inconvenient, itâs actually a straightforward process whether you want to roll over a 401(k) into your new employerâs plan, or into an IRA.
Not sure which rollover strategy is right for you? SoFi Invest® offers retirement savings plan options. With a SoFi Roth or Traditional IRA, investors have access to a broad range of investment options, member services, and our robust suite of planning and investment tools.
SoFi Invest®
The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individualâs specific financial needs, goals and risk profile. SoFi canât guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term âSoFi Investâ refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated InvestingâThe Automated Investing platform is owned by SoFi Wealth LLC, an SEC Registered Investment Advisor (âSofi Wealthâ). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (âSofi Securities).
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For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, http://www.sofi.com/legal.
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Check-In: Expecting Couple Struggling with Debt, But Future Looks Bright
When I first connected with Julia and John, the Queens, NY couple was expecting their first child and grappling with some debt, a lack of savings and income prior to the baby’s arrival. The couple was basically living paycheck to paycheck and in need of some advice to break through that cycle.
We reconnected this month to see how they’ve been doing. Julia is now nearing the end of her third trimester. The baby is due to arrive in two months.
I was hoping that with a baby on the way the couple would have found some ways to chisel away their debt or bulk up savings. Unfortunately, fie months later, they’re more or less still in the same money boat.
But they did act upon a couple of my tips and are benefiting from the goodness of New York and their parents, which has their futures looking brighter.
First, John, who lacks a college degree and was struggling to find full-time work, is going back to school. Not to a college or university, but to a 9-month software boot camp in New York that’s going to give him the skills and network to become a software developer. His potential earnings in the first year in the market could be as much as $75,000 (based on some people I know who’ve gone through similar programs in New York.)
The program will be about $15,000, a fraction of what it would cost to earn a bachelor’s degree. John’s parents have agreed to loan him the money. The couple’s decided to place that $15,000 family loan in savings and, instead, take out a small student loan to pay for John’s school. I agree with that strategy, given that their family is about to increase in size and having some cash on hand will be very important.
Once John completes school and finds work, I’d recommend the couple prioritize the credit card debt by paying at least double the minimums each month. Be most aggressive with the highest interest credit card debt first. Their student loan will likely have a smaller interest rate and can be paid over a 10-year period, making the monthly minimums relatively manageable. Automate those payments as soon as possible and benefit from a 0.25% interest rate reduction when they do.
While they’re taking on more debt, I’m okay with it. Investing in John’s education is one of the best ways this couple can get ahead and better secure their finances in the future – so long as they commit to earning more and paying it down.
Ahead of that program starting, John’s also taken on a side hustle (per my advice). He’s been working a few shifts here and there at Julia’s company, working with special needs patients as a social aide, taking them to community and outdoor events.
Some other good news that’s developed since we last spoke is that New York State has enhanced its Family and Medical Leave Act by implementing Paid Family Leave. In the past, certain employers were only required to provide workers with their jobs back after taking a leave of absence for up to 12 weeks. Now, qualifying private employers must provide paid time off and a continuation of health insurance for 8 weeks in 2018.
This came as a surprise bonus for Julia, who was preparing for zero paid time off from her employer.
It would be my recommendation to use part or all of that extra money to pay down their high-interest credit card debt.
Once Julia returns to work after her maternity leave, her mother-in-law will be the go-to caretaker during the day, another huge help.
They’re fortunate to have free childcare from a trusted, loved one. With that very big expense covered and John’s schooling about to start, I feel confident that the couple’s future is a financially bright one.
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Source: mint.intuit.com
Different Types of Debt

Debt comes in all shapes and sizes. You can owe money to utility companies, banks, credit card providers, and the government. Thereâs student loan debt, credit card debt, mortgage debt, and much more. But what are the official categories of debt and how do the payoff strategies for these debts differ?
Categories of Debt
Debt is generally categorized into two simple forms: Secured and Unsecured. The former is secured against an asset, such as a car or loan, and means the lender can seize the asset if you fail to meet your obligations. Unsecured is not secured against anything, reducing the creditorâs control and limiting their options if the repayment terms are not met.
A secured debt provides the lender with some assurances and collateral, which means they are often prepared to provide better interest rates and terms. This is one of the reasons youâre charged astronomical rates for credit cards and short-term loans but are generally offered very favorable rates for home loans and car loans.
If the debtor fails to make payments on an unsecured debt, such as a credit card, then the debtor may file a judgment with the courts or sell it to a collection agency. In the first instance, itâs a lot of hassle without any guarantee. In the second, theyâre selling the debts for cents on the dollar and losing a lot of money. In either case, itâs not ideal, and to offset this they charge much higher interest rates and these rates climb for debtors with a poorer track record.
There is also something known as revolving debt, which can be both unsecured and secured. Revolving debt is anything that offers a continuous cycle of credit and repayment, such as a credit card or a home equity line of credit.Â
Mortgages and federal student loans may also be grouped into separate debts. In the case of mortgages, these are substantial secured loans that use the purchase as collateral. As for federal student loans, they are provided by the government to fund education. They are unsecured and there are many forgiveness programs and options to clear them before the repayment date.
What is a Collection Account?
As discussed above, if payments are missed for several months then the account may be sold to a debt collection agency. This agency will then assume control of the debt, contacting the debtor to try and settle for as much as they can. At this point, the debt can often be settled for a fraction of the amount, as the collection agency likely bought it very cheaply and will make a profit even if it is sold for 30% of its original balance.
Debt collectors are persistent as thatâs their job. They will do everything in their power to collect, whether that means contacting you at work or contacting your family. There are cases when they are not allowed to do this, but in the first instance, they can, especially if theyâre using these methods to track you down and they donât discuss your debts with anyone else.
No one wants the debt collectors after them, but generally, you have more power than they do and unless they sue you, thereâs very little they can do. If this happens to you, we recommend discussing the debts with them and trying to come to an arrangement. Assuming, that is, the debt has not passed the statute of limitations. If it has, then negotiating with them could invalidate that and make you legally responsible for the debt all over again.
Take a look at our guide to the statute of limitations in your state to learn more.
As scary as it can be to have an account in collections, itâs also common. A few years ago, a study found that there are over 70 million accounts in collections, with an average balance of just over $5,000.
Can Bankruptcy Discharge all Debts?
Bankruptcy can help you if you have more debts than you can repay. But itâs not as all-encompassing as many debtors believe.
Chapter 7 bankruptcy will discharge most of your debts, but it wonât touch child support, alimony or tax debt. It also wonât help you with secured debts as the lender will simply repossess or foreclose, taking back their money by cashing in the collateral. Chapter 13 bankruptcy works a little differently and is geared towards repayment as opposed to discharge. You get to keep more of your assets and in exchange you agree to a payment plan that repays your creditors over 3 to 5 years.
However, as with Chapter 7, you canât clear tax debts and you will still need to pay child support and alimony. Most debts, including private student loans, credit card debt, and unsecured loan debt will be discharged with bankruptcy.
Bankruptcy can seriously reduce your credit score in the short term and can remain on your credit report for up to 10 years, so itâs not something to be taken lightly. Your case will also be dismissed if you canât show that you have exhausted all other options.
Differences in Reducing Each Type of Debt
The United States has some of the highest consumer debt in the world. It has become a common part of modern life, but at the same time, we have better options for credit and debt relief, which helps to balance things out a little. Some of the debt relief options at your disposal have been discussed below in relation to each particular type of long-term debt.
The Best Methods for Reducing Loans
If youâre struggling with high-interest loans, debt consolidation can help. A debt consolidation company will provide you with a loan large enough to cover all your debts and in return, they will give you a single long-term debt. This will often have a smaller interest rate and a lower monthly payment, but the term will be much longer, which means youâll pay much more interest overall.
Debt management works in a similar way, only you work directly with a credit union or credit counseling agency and they do all the work for you, before accepting your money and then distributing it to your creditors.
Both forms of debt relief can also help with other unsecured debts. They bring down your debt-to-income ratio, leave you with more disposable income, and allow you to restructure your finances and get your life back on track.
The Best Methods for Reducing Credit Cards
Debt settlement is the ultimate debt relief option and can help you clear all unsecured debt, with many companies specializing in credit card debt.Â
Debt settlement works best when you have lots of derogatory marks and collections, as this is when creditors are more likely to settle. They can negotiate with your creditors for you and clear your debts by an average of 40% to 60%. You just need to pay the full settlement amount and the debt will clear, with the debt settlement company not taking their cut until the entire process has been finalized.
A balance transfer can also help with credit card debt. A balance transfer credit card gives you a 0% APR on all transfers for between 6 and 18 months. Simply move all of your credit card balances into a new balance transfer card and then every cent of your monthly payment will go towards the principal.
The Best Methods for Reducing Secured Debts
Secured debt is a different beast, as your lender can seize the asset if they want to. This makes them much less susceptible to settlement offers and refinancing. However, they will still be keen to avoid the costly foreclosure/repossession process, so contact them as soon as youâre struggling and see if they can offer you anything by way of a grace period or reduced payment.
Most lenders have some form of hardship program and are willing to be flexible if it increases their chances of being repaid in full.
Different Types of Debt is a post from Pocket Your Dollars.
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4 Practical Ways to Leave College Debt-Free
The following is a guest post by Lisa Bigelow, a content writer for Bold.
When it comes to paying for college, the anxiety about how to leave college debt-free starts early. And for thousands of grads who are buckling under the weight of monthly student loan payments that can cost as much as a mortgage, that worry can last for as long as 25 years.
According to EducationData.org and The College Board, the cost of a private school undergraduate education can exceed $200,000 over four years. Think you can avoid a $100k+ price tag by staying in-state? Think againâmany public flagships can cost over $100,000 for residents seeking an undergraduate degree, including room and board. And with financial aid calculators returning eye-poppingly low awards, youâd better not get a second topping on your pizza.
In fact, youâd better hope that you can graduate on time.
The good news is that you can maintain financial health and get a great education at the same time. You wonât have to enroll as a full-time student and work 40 hours a week, eitherâeach of the methods suggested are attainable for anyone who makes it a priority to leave college debt-free.
Here are four practical ways you can leave college debt-free (and still get that second pizza topping).
1. Cut the upfront sticker price
Donât visit schools until you are certain you can afford them. Instead, prioritize the cost of attendance and how much you can afford to pay. Staying in-state is one easy way to do this. But if you have wanderlust and want to explore colleges outside state lines, an often-overlooked method of cutting the upfront cost is the regional tuition discount. Many US states participate in some form of tuition reciprocity or exchange programs. You can explore the full list of options at the National Association for Student Financial Aid Administrators website.
Letâs explore how this works. As a resident of a New England state, for example, you can study at another New England stateâs public university at a greatly reduced cost if your home stateâs public schools donât offer the degree you want. So, for example, if you live in Maine but want to go to film school, you can attend the University of Rhode Island and major in film using the regional tuition discount.
Some universities offer different types of regional discounts and scholarships that appear somewhat arbitrary. The University of Louisville (in Kentucky) includes Connecticut in its regional scholars program. And at the University of Nebraska, out-of-state admitted applicants are eligible for several thousand dollars in renewable scholarship money if they meet modest academic standards.
If you already have your heart set on an expensive school and youâre not likely to qualify for reciprocity, financial help, or merit aid, live at home and complete your first two years at your local community college.
Hereâs another fun fact: in some places, graduating from community college with a minimum GPA gives you automatic acceptance to the state flagship university.
2. Leverage dual enrollment and âtesting outâ
When you enroll in a four-year college itâs pretty likely that youâll spend the first two years completing general education requirements and taking electives. Why not further reduce the cost of your education by completing some of those credits at your local community college, or by testing out?
Community college per-credit tuition is usually much cheaper than at four-year colleges, so take advantage of the lower rate in high school and over the summer after youâre enrolled in your four-year college.
But beware: youâll probably need at least a C to transfer the credits, so read your institutionâs rules first. Also, plan to take general education and low-level elective classes, because youâll want to take courses in your major at your four-year school.
If youâve been given the opportunity to take Advanced Placement courses, study hard for your year-end exams. Many colleges will accept a score of 3 or higher for credit, although some require at least a 4 (and others none at all). Take four or five AP classes in high school, score well on the exams, and guess what? Youâve just saved yourself a semester of tuition.
3. Take advantage of financial aid opportunities
After taking steps one and two, you probably have a good idea of what the leftover expense will be if you want to leave college debt-free. Your next job is to figure out how to cut that total even more by using financial aid. There are four types to consider.
The first is called need-based aid. This is what youâll apply for when you complete your Free Application for Federal Student Aid. Known as the FAFSA, this is where youâll enter detailed financial information, and youâll need at least an hour the first time you complete this form. Hint: apply for aid as soon as the form opens in the fall. It is not a bottomless pot of money.
There is also medical-based financial aid. If you have a condition that could make employment difficult after graduating from college, you may be eligible, and qualifying is separate and apart from financial need and academic considerations.
The third type of aid relates to merit and is offered directly by colleges. Some schools automatically consider all accepted applicants for merit scholarships, which could relate to academics or community service or, in the case of recruited athletes, athletics. At other universities, youâll need to submit a separate scholarship application after youâve been admitted. Some merit awards are renewable for four years and others are only for one year.
If you didnât get need-based or merit-based aid then you still may qualify for a private scholarship. Some require essays, some donât, and some are offered by local community organizations such as rotary clubs, womenâs organizations, and the like. Donât turn your nose up at small-dollar awards, either, because they add up quickly and can cover budget-busting expenses such as travel and books.
4. Find easy money
Small-dollar awards really add up when you make finding easy money a priority. Consider using the following resources to help leave college debt-free:
- Returns from micro-investing apps like Acorns
- Tax return refunds
- Browser add-ons that give you cashback for shopping online
- Rewards credit cards (apply for a travel rewards credit card if youâre studying out of state)
- Asking for money at the holidays and on your birthday
- Working part-time by capitalizing on a special talent, such as tutoring, photography, or freelance writing
Leave College Debt-Free
Finally, if you have to take out a student loan, you may be able to have it forgiven if you agree to serve your community after graduation. The Peace Corps is one such way to serve, but if you have a specialized degree such as nursing, you can work in an underserved community and reap the rewards of loan forgiveness.
Lisa Bigelow writes for Bold and is an award-winning content creator, personal finance expert, and mom of three fantastic almost-adults. In addition to Credit.com, Lisa has contributed to The Tokenist, OnEntrepreneur, College Money Tips, Finovate, Finance Buzz, Life and Money by Citi, MagnifyMoney, Well + Good, Smarter With Gartner, and Popular Science. She lives with her family in Connecticut.
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The Average Salary of a Surgeon
Surgery is a prestigious field that requires a high degree of skill, dedication and hard work of its members. Not surprisingly, surgeonsâ compensation reflects this fact, as the average salary of a surgeon was $255,110 in 2018. This figure can vary slightly depending on where you live and the type of institution at which you work. Moreover, the path to becoming a surgeon is long and involves a substantial amount of schooling, which might result in student loan debt.
Average Salary of a Surgeon: The Basics
According to the Bureau of Labor Statistics (BLS), the average salary of a surgeon was $255,110 per year in 2018. That comes out to an hourly wage of $122.65 per hour assuming a 40-hour work week â though the typical surgeon works longer hours than that. Even the lowest-paid 10% of surgeons earn $94,960 per year, so the chances are high that becoming a surgeon will result in a six-figure salary. The average salary of a surgeon is higher than the average salary of other doctors, with the exception of anesthesiologists, who earn roughly as much as surgeons.
The top-paying state for surgeons is Nebraska, with a mean annual salary of $287,890. Following Nebraska is Maine, New Jersey, Maryland and Kansas. Top-paying metro area for surgeons include Cincinnati, OH-KY-IN; Winchester, WV-VA; Albany-Schenectady-Troy, NY; New Orleans-Metairie, LA; and Bowling Green, KY.
Where Surgeons Work
According to BLS data, most of the surgeons in the U.S. work in physiciansâ offices, where the mean annual wage for surgeons is $265,920. Second to physiciansâ offices for the highest concentration of surgeons are General Medical and Surgical Hospitals, where the mean annual wage for surgeons is $225,700. Colleges, universities and professional schools are next up. There, surgeons earn an annual mean wage of $175,410. A smaller number of surgeons are employed in outpatient Care Centers, where the mean annual wage for surgeons is $277,670. Last up are special hospitals. There, the mean annual wage for surgeons is $235,770.
Becoming a Surgeon
You may have heard that the cost of becoming a doctor, including the cost of medical school and other expenses, has soared. Aspiring surgeons must first get a bachelorâs degree from an accredited college, preferably in a scientific field like biology.
Then comes the Medical College Acceptance Test (MCAT) and applications to medical schools. The application process can get expensive quickly, as many schools require in-person interviews without reimbursing applicants for travel expenses.
If accepted, youâll then spend four years in medical school earning your M.D. Once youâve accomplished that, youâll almost certainly enter a residency program at a hospital. According to a 2018 survey by Medscape, the average medical resident earns a salary of $59,300, up $2,100 from the previous year. General surgery residents earned slightly less ($58,800), but more specialized residents like those practicing neurological surgery earned more ($61,800).
According to the American College of Surgeons, surgical residency programs last five years for general surgery. But some residency programs are longer than five years. For example, thoracic surgery and pediatric surgery both require residents to complete the five-year general surgery residency, plus two additional years of field-specific surgical residency.
Surgeons must also be licensed and certified. The fees for the licensing exam are the same regardless as specialty, but the application and exam fees for board certification vary by specialty. Maintenance of certification is also required. Itâs not a set-it-and-forget-it qualification. The American Board of Surgery requires continuing education, as well as an exam at 10-year intervals.
Bottom Line
Surgeons earn some of the highest salaries in the country. However, the costs associated with becoming a surgeon are high, and student debt may eat into surgeonsâ high salaries for years. The costs of maintaining certification and professional insurance are significant ongoing costs associated with being a surgeon.
Tips for Forging a Career Path
- Your salary dictates a lot of your financial life, such as how much you can afford to pay in rent and the slice of your paycheck that goes to taxes. However, there are some principles that apply no matter your income bracket, like the importance of an emergency fund and a well-funded retirement account.
- Whether youâre earning a six-figure surgeonâs salary or living on a more modest income, itâs smart to work with a financial advisor to manage your money. Finding the right financial advisor that fits your needs doesnât have to be hard. SmartAssetâs free tool matches you with financial advisors in your area in 5 minutes. If youâre ready to be matched with local advisors that will help you achieve your financial goals, get started now.
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