Spring Break
Avoiding a bad credit rating
Communication critical in addressing outstanding debt
Brian Reisinger
Issue date: 3/14/05 Section: Money
Holman, who currently lives on campus, said she understands how tracking finances could become difficult while living off campus, as students must pay rent and buy groceries.
"You're writing out hundred dollar checks or more," she said. "It'd be easy to lose track."
Hertel, who offers legal counsel to Eau Claire students in addition to his private practice, said students in financial trouble should take immediate action to remedy their monetary woes.
One of those steps, he said, is to establish active communication with the person or company owed so an agreement can be worked out.
"The biggest issue probably is communication," Hertel said. "Make it clear you want to take care of the debt."
Sometimes students are able to work out extended payment plans with the people or organizations they owe money to, he said.
Ginger Tinsman of Associated Bank, 806 S. Hastings Way, said counseling services and payment plans are available for students in financial trouble.
"We work with (students) like any client to find a solution," she said.
Darin McFadden, also of Associated Bank, said failure to address a build-up of poor credit could lead to difficulty in receiving loans.
"If we notice delinquency with other creditors, we might not be able to extend credit," he said.
McFadden said in general, Associated Bank makes a concentrated effort to work with students who have various financial situations.
In extreme cases, such as extensive credit card debt with interest rates of 18 to 25 percent, bankruptcy becomes the only viable option, Hertel said.
"In those cases, legal counsel is in order," he said.
There are times when attorneys are able to negotiate payment agreements that may abolish interest, since collectors don't want to risk their debtor filing for bankruptcy, he said.
"Companies don't want to risk losing payment," Hertel said. "Something is better than nothing."
During the bankruptcy process, he said, assets are weighed against debt. If that debt exceeds one's assets, bankruptcy is possible, he said.
A successful bankruptcy can lead to a loss of some assets, although, sometimes savings can be salvaged, Hertel said.
"It's effectively a clean slate," he said.
But Baglien said even bankruptcy can't completely remedy financial woes.
She said bankruptcies are also documented and can affect credit ratings for up to 10 years.
"You're going to pay very high interest rates the closer you are to bankruptcy," she said.
"You're writing out hundred dollar checks or more," she said. "It'd be easy to lose track."
Hertel, who offers legal counsel to Eau Claire students in addition to his private practice, said students in financial trouble should take immediate action to remedy their monetary woes.
One of those steps, he said, is to establish active communication with the person or company owed so an agreement can be worked out.
"The biggest issue probably is communication," Hertel said. "Make it clear you want to take care of the debt."
Sometimes students are able to work out extended payment plans with the people or organizations they owe money to, he said.
Ginger Tinsman of Associated Bank, 806 S. Hastings Way, said counseling services and payment plans are available for students in financial trouble.
"We work with (students) like any client to find a solution," she said.
Darin McFadden, also of Associated Bank, said failure to address a build-up of poor credit could lead to difficulty in receiving loans.
"If we notice delinquency with other creditors, we might not be able to extend credit," he said.
McFadden said in general, Associated Bank makes a concentrated effort to work with students who have various financial situations.
In extreme cases, such as extensive credit card debt with interest rates of 18 to 25 percent, bankruptcy becomes the only viable option, Hertel said.
"In those cases, legal counsel is in order," he said.
There are times when attorneys are able to negotiate payment agreements that may abolish interest, since collectors don't want to risk their debtor filing for bankruptcy, he said.
"Companies don't want to risk losing payment," Hertel said. "Something is better than nothing."
During the bankruptcy process, he said, assets are weighed against debt. If that debt exceeds one's assets, bankruptcy is possible, he said.
A successful bankruptcy can lead to a loss of some assets, although, sometimes savings can be salvaged, Hertel said.
"It's effectively a clean slate," he said.
But Baglien said even bankruptcy can't completely remedy financial woes.
She said bankruptcies are also documented and can affect credit ratings for up to 10 years.
"You're going to pay very high interest rates the closer you are to bankruptcy," she said.
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