Friday’s need-to-know money news

Today’s top story: 6 ways the tax plan could change homeownership. Also in the news: What the Fed rate hike means for student loans, what it means for your CDs, and how Donald Trump is shrinking your paycheck.

6 Ways Tax Plan Could Change Homeownership
Analyzing the impact.

Fed Rate Hike: What It Means for Student Loans
Checking your rates.

December 2017 Fed Rate Hike: What It Means for Your CDs
Impacting your savings.

Here’s How Donald Trump Is Shrinking Your Paycheck
Looking at the nuances of the tax plan.

Monday’s need-to-know money news

Today’s top story: What doesn’t affect your credit score. Also in the news: A crash course for first-time Black Friday shoppers, how far your money will stretch on Black Friday, and how to pick a college that won’t break the bank.

What Doesn’t Affect Your Credit Score
Focusing on the important factors.

A Crash Course for First-Time Black Friday Shoppers
Tips for rookies.

See How Far Your Money Will Stretch on Black Friday
Getting the most for your money.

How to pick a college that won’t break the bank
Avoiding years of student loan repayment.

Q&A: Should grandma sue over the student loan she co-signed?

Dear Liz: You recently answered a letter from a grandmother who co-signed a student loan for a granddaughter who isn’t paying the debt. Although you did not suggest it, a very viable option would be for the grandmother to contact an attorney and sue her daughter and her granddaughter for the debt owed.

It doesn’t appear that they care for the grandmother anyway, so why feel bad about holding their feet to the fire? The grandmother may not have a legal leg to stand on with the daughter, but surely the granddaughter received the benefit of the loan and should ante up.

Answer: Suing a family member is a pretty drastic step that many people are reluctant to consider. If the grandmother is in fact “judgment proof” — if creditors who sue her wouldn’t be allowed to garnish her income or seize her property — then the lender might start focusing its collection actions on the granddaughter. The grandmother wouldn’t have to go to the expense of suing the young woman or trying to collect on a judgment.

Either way, the bankruptcy attorney I suggested she consult to help determine if she’s judgment proof also would be able to advise her about filing such a lawsuit.

To reiterate, student loans typically can’t be discharged in bankruptcy, but bankruptcy attorneys understand the credit laws of their states and can help people assess how vulnerable they are to lawsuits and other collection actions.

Tuesday’s need-to-know money news

Today’s top story: The scariest thing to find on your credit report. Also in the news: How to spend your day when you’re unemployed, advocates praise student loan scam crackdown, and how to get your student loans back on course.

The Scariest Thing to Find on Your Credit Reports
Beware of surprises.

How to Spend Your Day When You’re Unemployed
Getting off the couch is a good start.

Advocates Praise Student Loan Scam Crackdown, Demand More
The tip of the iceberg.

Ask Brianna: How do I get my student loans back on course?
Course correction.

Tuesday’s need-to-know money news

Today’s top story: 7 signs you’ve gone from frugal to cheap. Also in the news: 7 ways to avoid becoming a scary student loan statistic, following the lead of Millennials to save more for retirement, and retirement community fees that can be deducted as medical expenses.

7 Signs You’ve Gone From Frugal to Cheap
A slippery slope.

7 Ways to Avoid Becoming a Scary Student Loan Stat
Don’t become a statistic.

To Save More for Retirement, Follow These Millennials’ Lead

You can deduct these retirement community fees as medical expenses
Unexpected savings.

Q&A: How student loans can follow you to the grave

Dear Liz: Several years ago, my daughter called in tears asking if I could help because my granddaughter, who was halfway through her first year of college, would have to drop out if she didn’t immediately finish paying her tuition. I agreed to co-sign a loan, thinking after she got through that semester, they could see how things went.

Well, unbeknownst to me, she took out a loan that also covered the next semester. She dropped out of school in her second year. Now several years later, I’m being hounded by the lender because neither my granddaughter or daughter seem to think they should have to do anything about this. I sometimes get up to four calls a day, seven days a week. I have returned calls but gotten nowhere.

Meanwhile, my granddaughter recently got a brand-new car and posts pictures of herself enjoying partying with friends. I tried to get her to talk to me about it, thinking if she, along with her mom and myself, could each manage to pay a little each month we could work on getting this taken care of, but I got no response from either of them.

My daughter and son-in-law still go on cruises and do other traveling, drive newer expensive vehicles and will no longer talk to me.

I am 73 and struggling to live month-to-month on Social Security, which is my only income. I used to have an 800 credit score that has now gone down into the 600s because of this.

Now I am afraid they will start taking this out of my Social Security check. This loan is about 72% of my total annual income! My doctor has upped one of my medications as I have trouble sleeping worrying about this.

What am I to do? The only way I can see out of this would be my death, and then I’m afraid it would even follow me to my grave.

Answer: If you co-signed the loan, then it was likely made by a private lender that won’t be able to take your Social Security check. Federal student loans are a different story. The U.S. Supreme Court has ruled that up to 15% of borrowers’ Social Security benefits can be taken to repay those.

Federal student loans also have no statute of limitations, which means the government can indeed pursue you to the grave. Private student loans, however, do limit how long lenders have to sue you over the debt. The time limit varies by state and is typically three to 10 years, but the limit may be extended in some areas if you make a payment on the debt or even acknowledge that it’s yours.

You should make an appointment to talk to a bankruptcy attorney. Student loans typically can’t be erased in bankruptcy, but an attorney familiar with the credit laws in your state can advise you about how vulnerable you might be to lawsuits and other collection actions.

If Social Security is your only income and you don’t have other assets a creditor can take, you may be “judgment proof.” That means a lender can sue you, but won’t be able to collect anything.

If that’s the case, the attorney may be able to communicate the situation to the lender so that it can redirect its energies to collecting from your irresponsible granddaughter.

Tuesday’s need-to-know money news

Today’s top story: Confusion about overdraft coverage can cost you dearly. Also in the news: 3 reasons why college students need to submit the FAFSA every year, appealing your flood insurance claim denial, and opening a subaccount to save for an epic vacation.

Confusion About Overdraft Coverage Can Cost You Dearly
Don’t pay the bank for access to your own money.

3 Reasons College Students Need to Submit the FAFSA Every Year
Financial circumstances change.

Flood Insurance Claim Denied? Don’t Panic; Appeal
Take a deep breath.

Open a Subaccount to Save for That Epic Vacation
Get the details.

Q&A: Tax implications of parents paying off a child’s loans?

Dear Liz: My wife and I co-signed for student loans for our daughter. My daughter made payments on these loans since she graduated from college four years ago. My wife and I just paid off the loan balance, which was $22,000. Is our payment considered a gift to our daughter?

Answer: Yes, but your gift is within the annual exemption limit, so you won’t have to file a gift tax return. You and your wife can each give your daughter $14,000, or a total $28,000, without having to file a return. Gift taxes aren’t owed until the amounts someone gives away above those annual limits exceeds $5.49 million.

Wednesday’s need to know money news

Today’s top story: How insurers are mobilizing to help Hurricane Harvey victims. Also in the news: How to get relief from college costs after Hurricane Harvey, how small businesses can cope post-Harvey, and how to get a tax break for going back to school.

How Insurers Are Mobilizing to Help Harvey Victims
Covered losses are expected to be more than $1 billion dollars.

How to Get Relief From College Costs After Hurricane Harvey
What current students and student loan holders can do.

Your Small Business’s Post-Harvey Return Starts Now
Steps you can take to start the recovery process.

How to get a tax break for going back to school
Save on taxes while getting an education.

Q&A: What to consider before giving money for law or medical school

Dear Liz: Our daughter is in medical school using scholarships and student loans. We are now in a position to help her out, but worry that financial help might work against her sources of aid. Would it be better to pay some on her outstanding loans, give her money, pay some of her living expenses or put the money into a savings account to give her when she graduates to use towards paying down her debt? The amount we could give her would not be enough to pay for everything each semester, just something to ease her burden. We don’t want to jeopardize her ability to receive aid.

Answer: While nearly all graduate students qualify as independent — which means that parent financial information isn’t required to get aid — some medical and law schools do consider parental assets and income in their calculations.

Your daughter should call her school’s financial aid office anonymously to ask about its policy regarding parental aid, said Lynn O’Shaughnessy, a college financing expert at TheCollegeSolution.com. If your help would hurt, you can use the savings account route but you needn’t wait until she graduates to give her the money. Once she files financial aid forms for her last year, she should be able to accept your largesse without consequence.