How to Qualify for Public Service Loan Forgiveness

While student loan forgiveness may be up in the air, the administration has taken steps to reform debt relief programs that already exist. The Department of Education revamped the Public Service Loan Forgiveness (PSLF) program, which was started under the Bush administration in 2007. The program is designed to reduce student debt for graduates who go on to work in a range of government, nonprofit and healthcare jobs; see below for a list and more details.

Announced last October, the new rules include a limited requirement-waiver that allows eligible borrowers to have payments that were previously excluded counted toward loan forgiveness. The waiver ends October 31 of this year. To see if you qualify, go to to use the PSLF Help Tool, which will generate the form you need. And make sure to have your old W-2 forms on hand. To see if your employers—past and present—qualify as an eligible or ineligible employer you will have to enter the employer’s tax identification number which is in box b of your W-2. For more information on the tool and how to use it, go to

The waiver seems to have worked as it’s supposed to for at least one now-former debtor. Ricardo Maldonado of New York City recently tweeted how roughly $139,000 worth of his federal student loans (connected to a graduate degree) was forgiven thanks to the PSLF waiver. Maldonado applied for forgiveness back in November 2021. After applying he got letters updating him about the process and received official notice of forgiveness on May 31, 2022.  

Maldonado says that the PSLF form was easy to manage for himself thanks to having one employer for the past 15 years, but more importantly “[It] was useful seeing folks say that [forgiveness] was possible,” he said via a direct message on Twitter.

What Went Wrong with Public Service Loan Forgiveness?

People with student loans who work in qualifying non-profit or government jobs may have their loans forgiven after ten years of qualifying payments to a qualifying loan program. These payments may be adjusted in consideration of the borrowers’ income level. 

The first borrowers would have been eligible for forgiveness in October 2017 (remember, the program was launched in 2007). But four months before that, the Consumer Financial Protection Bureau reported problems: “Borrowers report that servicers delay or deny access to loan forgiveness through wrong information about their loans, flawed payment processing, and bungled job certifications.”

One major complication involves how federal student loans originated. Prior to 2010, federally backed student loans were issued by financial institutions and not directly by the federal government. PSLF applies only to direct student loans, or those issued by the federal government. Earlier loans could be consolidated into direct loans, and payments made after that consolidation would apply toward PSLF.

Who Qualifies for Public Service Loan Forgiveness?

The PSLF program covers a wide range of jobs, including virtually all direct government employment (whether federal, state, local or tribal). Many jobs at nonprofits as well as public health work also qualify. Some exceptions include Labor unions or partisan political organizations. Members of Congress are also specifically excluded. The program also has provisions that work must be full time (at least 30 hours a week), though this can be through multiple jobs with qualified employers.

Positions include:

  • Emergency management
  • Military service: service on behalf of the U.S. armed forces or the National Guard
  • Public safety
  • Law enforcement: crime prevention, control or reduction of crime, or the enforcement of criminal law
  • Public interest law services: legal services provided by an organization that is funded in whole or in part by a local, state, federal, or tribal government
  • Early childhood education including licensed or regulated child care, Head Start, and state-funded prekindergarten
  • Public service for individuals with disabilities and the elderly
  • Public health including:
  • Nurses
  • Nurse practitioners
  • Nurses in a clinical setting
  • Full-time professionals engaged in health care practitioner occupations, health support occupations, and counselors, social workers, and other community and social service specialist occupations as such terms are defined by the Bureau of Labor Statistics
  • Public library services
  • School library or other school-based services

More detail is available at:


Dear Penny: Can I Get My Ex-Husband’s Social Security Before He’s Eligible?

Dear Penny,

I was married to a man for almost 19 years when he decided (unbeknownst to me) that he wanted a divorce. I felt that we had a happy marriage the majority of those years. We only had the occasional disagreement, as most marriages do. 

In fact, he didn’t tell me until after the divorce was finalized his reasons for leaving me. He is the father of our two children. It was very devastating for me as well as our children when he left, although he has tried to be a good dad since the divorce and is very involved in their lives. I am 10 years 8 months older than him and am now 60 years old. He has remarried twice in the nine years since our divorce.

I have known for a long time that I can collect Social Security benefits based on his employment, since it will be much higher than my own benefit. However, I didn’t realize until recently (and wasn’t told by my financial planner) that I can’t start collecting Social Security benefits until HE is at full retirement age and not when I am at full retirement age. That would mean I will be in my 70s.

Please tell me exactly when I can start collecting my Social Security benefits based off his income. And is it based off his income when he retires, or his income when we got divorced? Also, is it possible for me to collect Social Security from my own work record when I am at full retirement age and then switch to his benefits when he is at full retirement age?


Dear S.,

Let’s get the bad news out of the way first: You have to wait until your ex-husband is eligible for Social Security benefits to collect on his record, but you don’t have to wait until he’s reached full retirement age. For anyone born in 1960 or later, full retirement age is 67. That means you’d be eligible for spousal benefits when your ex is 62, not 67.

Of course, that doesn’t do you much good. You’d still be at least 72 by the time you could start spousal benefits.

You can’t take your own benefits and switch to your ex-husband’s benefit later on. That’s an option that’s only available if you were born before Jan. 2, 1954. (The same rule applies for people who want to start with a spousal benefit and then switch to their own benefit later.)

Social Security allows divorced spouse benefits because both spouses contribute economically to a marriage, even if one person earns a lot more. But unfortunately, the rules leave the lower-earning spouse in a bind if they’re significantly older.

I get that all of this is difficult to accept, especially given that you were blindsided by the end of your marriage. But you need to focus on how to maximize your own retirement benefits. Claiming your ex’s benefits simply isn’t viable.

Even though your ex-husband outearned you, don’t assume that you’d collect more if spousal benefits were a possibility. The maximum spousal benefit is 50% of the spouse’s full retirement age benefit — and that’s only for spouses and ex-spouses who wait until their own full retirement age. Spouses who start at age 62 only receive 32.5%.

When you take your own retirement benefits, you can earn 8% delayed retirement credits for each year you hold off past full retirement age until you’re 70. But you can’t earn delayed retirement credits with spousal benefits. You’d collect your maximum benefit at 67, your full retirement age.

Many people will actually get more money taking their own benefit instead of spousal benefits, even when the spouse was the much higher earner. As of April 2022, the average monthly spousal benefit was just $837, compared to $1,666 for retired workers.

Social Security bases benefits on 35 years’ worth of earnings. If you work less than 35 years, your income for the non-working years is entered as zero. The more years you can work, obviously, the bigger your benefit will be.

You’ll probably want to delay benefits for as long as possible, especially if you’re in good health. Starting Social Security at age 70 results in a benefit that’s about 77% higher compared to starting as soon as you’re eligible at 62.

In the meantime, focus on saving as much as possible for retirement. Since you’re over 50, you can contribute $7,000 to a Roth IRA in 2022. The limits for most workplace plans, like 401(k)s and 403(b)s are even higher. You can contribute up to $20,500 plus an extra $6,500 catch-up that’s allowed for people 50 and older.

I’m sorry that you’ve been dealt this most difficult hand. But focus on what you can control.

There’s still a lot you can do to secure the comfortable retirement you deserve.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].

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What Older Adults Should Know about Getting Divorced and (Maybe) Remarried

My Great Aunt Gert was widowed after being happily married to the same husband – my Great Uncle Bob – for more than 50 years. She remarried at age 83 to a man, my Great Uncle John, who was 85. They had 10 good years together before he died at the ripe old age of 95. Their “gray marriage” was a rarity 30 years ago.

So was gray divorce – but it’s on the rise today. Not everyone has the happy ending Gert had. She had one long, happy marriage followed by another.

In the last five years, I have seen more long-term marriages end than ever before. It’s actually a global phenomenon. Most divorces still happen to couples in their 30s and 40s, but more couples in their 50s and 60s – who have been married for 25 years and up – are deciding to split these days.

Their concerns are different than younger couples who divorce. In a more typical divorce, the partners are concerned with the young kids – assuming there are any – being OK. In gray divorce, partners have often accumulated more substantial assets, so there’s more to be divided. There are older kids, possibly grandchildren. There are more stakeholders.

Sometimes, it’s becoming an empty nester that’s the impetus for the split. The kids are 18 or over and gone. And the couple find they’ve grown apart. Sometimes it’s the children who – maybe even unwittingly – have kept their parents together.

No matter what age the kids are, they still need to be taken into consideration. If they’re in college, the soon-to-be-exes must figure out if college tuition and expenses will be split and if so, how. When the grown children get married, will Mom and Dad still fund the wedding or a portion of it? How?

If there are grandchildren, the uncoupling couple may be paying for private school tuition, summer camps, music lessons. Will Grandma and Grandpa keep paying for those things? And if so, how will those expenses be paid?

In gray divorces, there can be a lot of intertwined interests that have to be unraveled and divided. Vacation homes. Rental property. A family business. Family foundations. I know former couples who continue to operate as business partners or jointly oversee a foundation and its assets. Still others continue to share vacation homes. Just not at the same time – unless it’s an unusually amicable split.

For anyone considering getting out of a long-term marriage, here are a few points to keep in mind.

Divide and conquer

Have you and your soon-to-be-ex shared the same financial planner and estate planning attorney? Probably. Now, you each must have your own set of advisers. It’s cleaner and easier for one spouse to stick with the existing advisors – and for one spouse to get new ones. Plus, ethically speaking an adviser can’t serve each of you.

So, maybe Spouse A keeps the existing attorney and finds a new financial planner, while Spouse B keeps the existing financial planner and finds a new attorney. Each person gets to keep one provider who has the historical perspective. Or maybe one of you wants a fresh start all around, and that works too.

Consolidate and conquer

If the couple are retired, they have likely already consolidated their nest egg, which makes divorce and splitting up assets easier. If they haven’t done this yet, doing so will again make it easier. Move it all over to one financial institution. That makes it a lot easier to track and a lot less stressful.

If the couple haven’t done that yet, it can be part of the negotiations. For smaller accounts – however you determine “smaller” –  close them out and move them to bigger accounts.

When the daughter (or son) says ‘I do’

Who will pay for the wedding(s) of your child or children? That’s often part of divorce negotiations.

It’s cleaner to get this settled at the time of the uncoupling, rather than waiting until much later.

Heir(s) apparent

Any previous estate planning documents that left everything to the surviving spouse may need to be updated with a new beneficiary or beneficiaries. If I’m the adult child of divorcing parents, it’s clear to me that whatever my inheritance originally was going to be, it may now be diluted. Especially if I have siblings.

Talk to your adult child or children about any provisions you’re making. Let them know their needs and interests are being factored in to the agreement.  

Who has the power?

Splitting spouses were probably each other’s power of attorney and healthcare power of attorney. Now what? The responsibility – for one or both parents – may now go to an adult child. These are conversations you’ll need to have at the time of the split.

Who has the (Social) Security?

There is a maze of laws surrounding Social Security (yes, you can collect Social Security from an ex-spouse) and remarriage. Make sure you know them. For example, your 60th birthday is crucial. Get married one day before you turn 60, and you could lose benefits you were entitled to – or may have even already been receiving.

Saying ‘I do’ (again)

If you get remarried, you will want prenups. A prenup gives you – and your adult children and grandchildren – some measure of security. It also reduces any risk of – it must be said – fraud. You’ll also want to update any health insurance and life insurance policies. You may again need to update your power of attorney and healthcare power of attorney – just as you did when you divorced, this time appointing your new spouse.

When you get married, there are a lot of inherent and invisible rights. And responsibilities. You may want to spell out – legally – that your children are not financially responsible for their stepmother or stepfather, should she or he require long-term hospitalization or in-home healthcare. This is where estate planning and financial planning come into play, as well.

Great Aunt Gert, who died in 2018, got lucky. Don’t leave your nest egg or your children’s and grandchildren’s futures to fate. Plan ahead, and have peace of mind.

Founder, GraserSmith, PLLC

Tonya Graser Smith is a Board Certified Specialist in Family Law, licensed North Carolina attorney and founder of GraserSmith, PLLC, in Charlotte, N.C. She focuses her practice on divorce, child custody, child support, alimony, equitable distribution, prenuptial agreements and other family law matters.


Guide to Refinancing Your Student Loans After Marriage

After getting married, you’ll start to merge your life, your home, and possibly your finances with your partner. As you plan for the future, it’s helpful to consider the implications of student loans and marriage—which can affect your credit, your ability to get a home mortgage, and even the repayment of your student debt.

Consolidating your federal loans or refinancing student loans after marriage may be options to consider as you begin handling finances in your marriage and working together to reach your financial goals

Student Loans and Marriage

There are currently over 45 million borrowers in the U.S. and the total amount of student loan debt is $1.7 trillion. So the odds are high that either you or your partner may have student loans. As you begin planning for your financial future together, it’s helpful to look at how marriage can affect student loan payments.

Recommended: What is the Average Student Loan Debt?

What Happens to Student Loans When You Get Married?

If you haven’t already had a conversation about student loans and marriage before tying the knot, you and your partner should sit down and discuss your individual student loan debt: how much you have, whether you have federal or private student loans, as well as what your balances, payment status, and monthly payments are. It’s important to share this information since getting married may change your debt repayment plans.

If someone has federal student loans and is on an income-based repayment (IBR) plan when they get married, for example, their monthly payments may increase post-marriage as income-based repayment plans are determined by household income and size. Depending on how a couple chooses to file their taxes, the government may take a new spouse’s salary into account when determining what the borrower’s monthly payments should be.

Because federal student loan borrowers on an income-based repayment plan have to recertify each year, the current year’s income is taken into account which may be higher after marriage if both spouses work. If the borrower’s new spouse doesn’t earn income then they may actually see their monthly payment requirements drop as their household size went up, but their household income remained the same.

Household income also affects how much student loan interest a borrower can deduct on their federal taxes. It’s worth consulting an accountant if a newly married couple needs help figuring out where they stand financially post-marriage.

It’s also important to be aware of how marriage affects your credit score as how someone manages their student loan debt is a factor. Since spouses don’t share credit reports, marrying someone with bad credit won’t hurt your credit score. That said, when it comes time to apply for a loan together, a bad credit score can make getting approved harder—which is another reason it’s key to get on the same page about repaying any debt on time.

Recommended: Types of Federal Student Loans

Refinancing Student Loans After Marriage

Refinancing student loans gives borrowers the chance to take out a new student loan with ideally better interest rates and terms than their original student loan or loans. Some borrowers may choose to consolidate multiple student loans into one newly refinanced loan to streamline their debt repayment process.

The result? One convenient monthly payment to make with the same interest rate and the same loan servicer instead of multiple ones.

As tempting as it may be to combine debt with a spouse and work toward paying it off together, married couples typically cannot refinance their loans together and each spouse would need to refinance their student loans separately. But even though a couple can’t refinance their student loan debt together, they’ll still want to be aware of what’s going on with their partner’s student loans.

Recommended: Top 5 Tips for Refinancing Student Loans in 2022

How to Refinance Student Loans After Marriage

Refinancing student loans after marriage looks the same as it does before marriage and is pretty straightforward. The student loan borrower will take out a new loan, which is used to repay the original student loan.

Ideally, this results in a better interest rate which will help borrowers save money on interest payments, but this isn’t a guarantee. Before refinancing, it’s important that borrowers shop around to find the best rates possible as factors like their credit score and income can qualify them for different rates.

Borrowers have the option of refinancing both federal and private student loans, but it’s worth noting that refinancing a federal student loan into a private one removes access to valuable federal benefits like income-driven repayment plans and loan forgiveness for public service employees.

Refinancing vs. Consolidating Student Loans After Marriage

Borrowers can choose to refinance or consolidate their student loans before or after marriage.

If a borrower has multiple federal student loans, then they can choose to consolidate their different loans into one Direct Consolidation Loan. This type of loan only applies to federal student loans and is offered through the U.S. Department of Education.

This type of loan takes a weighted average of all of the loans consolidated to determine the new interest rate, so generally this is an option designed to simplify debt repayment, not to save money. If a borrower chooses to consolidate through a private lender, they will be issued new rates and terms, which may be more financially beneficial.

Consolidating through a private lender is a form of refinancing that allows borrowers to take out one new loan that covers all of their different sources of student loan debt. While some private lenders will only refinance private student loans, there are plenty of private lenders that refinance both private and federal loans. As mentioned earlier, refinancing a federal loan means losing access to federal protections and benefits.

Refinancing can be advantageous if the borrower is in a better financial place than they were when they originally took out private student loans. If they’ve improved their credit score, paid down debt, and taken other steps to improve their financial picture, they may qualify for a better interest rate that can save them a lot of money over the life of their loan.

Another option in refinancing student loans after marriage is co-signing a partner’s loan. Doing so may mean that you can leverage greater earning power and possibly better credit, but it also means both partners are responsible for the loan, and can put one partner at risk in the event of death or divorce.

Student Loan Refinancing With SoFi

SoFi refinances both federal and private student loans, which can help borrowers save because of our flexible terms and low fixed or variable rates. Borrowers won’t ever have to worry about any fees and can apply quickly online today.

Learn more about refinancing student loans with SoFi.


What happens when you marry someone with student loan debt?

If someone’s new spouse has student loan debt, this indirectly affects them. While the debt won’t be under their name or affect their credit score when it comes time to apply for credit products with their spouse (such as a mortgage loan) their credit score and current sources of debt will likely be taken into account.

Is one spouse responsible for the other’s student loans?

No one spouse is directly responsible for their spouse’s student loans, but it’s important to work together to pay off student loan debt. Again, once it comes time to apply for a joint loan, any student loan debt can have an effect on eligibility.

Does getting married affect student loan repayment?

Getting married can affect student loan repayment if a borrower is on an income-based repayment plan for their federal student loans. This type of repayment plan takes household size and income into account when determining what the borrower’s monthly payment should be. If their spouse brings in an income they may find their monthly payments are higher, but if their spouse doesn’t have an income their payments may become smaller.

Photo credit: iStock/South_agency

SoFi Student Loan Refinance
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.


Why Your Credit Score May Drop Following Divorce

One of the ugly sides of divorce is that it can ruin the creditworthiness of both parties. Not directly though, but because of splitting assets, including bank accounts, your individual credit reports can get a hit.

That said, it is worth noting that a credit report does not capture your marital status; so, a change of the status has zero effect on your credit rating. What you must worry about is your shared financial obligations in the ways outlined below.

1.  Unequal Split of Debt

At the end of divorce proceedings, a decree is issued by the court ordering how both assets and debt are to be split. The order also specifies who is to assume which debt- no matter who applied for the debt in the first place.

Now, let’s say that you get to keep the house and the other person pays the mortgage, if they refuse the obligation, your credit report suffers.

2.  Change of Budget

Typically, when married, your household enjoys two incomes. Once the divorce is final, you’re saddled with a new budget that your individual income might not support.

You may now have to solely clear the remaining balance on your car, a debt that was previously guaranteed by two incomes. The reality is that if you default, your credit score will surely drop.

3.  Sabotage by Your Partner

Sabotage is a real risk when it comes to messy divorces. This is usually the case when both parties have access to the same accounts. To illustrate, if your partner was an authorized user on your credit card, they can choose to max out the card with total disregard for the resulting negative effect on both your credit reports.

4.  Drop of Your Credit Limit

Legally, creditors have the sole discretion of deciding which terms to offer clients during credit application. Further, they can change the terms upon review of the customer’s credit report. So, if your partner was earning more money that led to you getting a high credit limit, separating the accounts changes your creditworthiness.

Subsequently, creditors can decide to lower your allowable limits to reflect your current financial status. With a lower limit, you may have to overutilize or max out your credit line, effectively lowering your credit scores.

How to Protect Your Credit After Divorce

However amicable the divorce proceedings are, it is upon you to keep your credit score high. Keep in mind that payment history and amount owed are the biggest determinants of your credit score, at 35% and 30% respectively.

Downsize your Budget

The change from two incomes to one income can diminish your ability to pay utilities and existing debts. To survive, you need to rebuild life starting by living by your means. Even with alimony going your way, the money may not cover new budget items. This usually affects women more than men due to disproportionate income that see men earning 82.3% more.

Deal with Shared Debt

As earlier noted, creditors are not obligated to honor divorce decrees. Moreover, removing a name from the loan’s contract is nearly impossible. The only option left is to convince your partner to diligently pay the balances to avoid delinquency on your credit report.

Another approach is to sell off properties or assets that are attracting monthly repayments. Ensure that the proceeds go to clearing the debts before sharing the remaining money. Lastly, the person responsible for the debt can refinance the loan in their name which automatically makes them the only debtor.


Your credit score can drop after a divorce due to many factors including the failure by either party to make repayments on shared debts. To mitigate, you need to disentangle your finances and ensure that only the one responsible for the debt, as per the decree, is the solely listed debtor. Further, open new lines of credit, such as a secured credit card under your name to help rebuild your credit.


Create a Financial Plan for Natural Disaster

Whether by cutting brush, adding storm shutters or building a safe room in the basement, there are many ways to mitigate the risks from natural disasters. Buying adequate insurance is critical too, of course. But there is another way you can prepare yourself against catastrophe, and no physical labor is required: getting your documents in order.

There’s no worse time to lose access to the documents necessary to rebuild than in the aftermath of a storm. You should have a plan in place before disaster hits because you may not be home when the evacuation alarm sounds.

We asked insurance experts what homeowners who have faced such devastation wish they had done earlier. What do people need to have on hand to document their damage claims successfully?  When is an electronic copy of a document acceptable, and when is the original a must? What should you photograph or video to prove you owned it? Do you need receipts? And where do you store all this safely?

Where to Keep Records Safe

Documents fall into two main categories: those that are easy to replace and those that are not. The latter group typically includes documents used to identify you and other members of your family, such as Social Security cards, original birth certificates, driver’s licenses, passports, marriage licenses and divorce decrees. Securing those is crucial because you may need some of them to access your bank accounts and insurance policies.

In the event of a storm warning or evacuation notice, you will more than likely have time to grab your wallet, which probably has your driver’s license in it. The rest of the documents should be securely stored, such as in a fireproof home safe or in a safe deposit box at your bank or credit union. A 3-by-5-inch safe deposit box costs about $60 a year, according to Value Penguin. Some banks provide discounts for customers with checking and savings accounts, or for customers who are older than 65. Call to make sure your bank or credit union has safe deposit boxes available, because some have decided to eliminate them altogether. 

Keep the key to the safe deposit box somewhere safe and accessible. Before allowing you to open the box, the bank will want proof that you’re the owner or that you’ve been granted access by the owner. (This is when your driver’s license will come in handy.) Banks don’t keep spare keys on hand for safe deposit boxes, so if you lose your keys, a locksmith will more than likely be called in to drill into your box at your expense.

But your bank—and your safe deposit box—could also be damaged by a flood or a wildfire. If your area is prone to floods, store your documents in sealable plastic bags to help protect them from water damage. If you’re worried about fire, ask the bank how boxes are protected. Safe deposit boxes are usually fire resistant but not fully fireproof. One alternative is to buy a fireproof home safe to store your documents.

For extra protection, scan and upload copies of each family member’s Social Security card and birth certificate to a cloud storage service, such as Google Drive, Apple iCloud, Dropbox or LastPass. If the originals get damaged, you may be able to use the scanned items to prove your identity and request new copies. For details on how to replace a Social Security card, go to 

If you lose a birth certificate, you will need to contact your state of birth’s vital records office and put in a request for a replacement. The CDC maintains a database of offices to contact and how much a replacement will cost. You will also need to submit a photocopy of your driver’s license or passport. 

What Records Should I Scan?

Because digitally stored documents are less likely to be lost or destroyed than paper copies stuffed in a file cabinet, consider cloud storage for all other important documents—past income tax returns, wills, powers of attorney, stock trade confirmations and lists of passwords, for example.

Some documents are already digitally stored for you. For example, if your company uses a major payroll provider such as ADP, W-2 forms and pay stubs are already saved and accessible with your password. The same goes for your home insurance and automobile policies, which you may be able to access through your insurer’s smartphone app. 

In some cases, you may need to keep older documents in paper form in your safe deposit box or home safe. For example, if you’ve scanned the original trade confirmation of an inherited stock but the image is blurry, you should stash the original in a safe deposit box or somewhere else where it’s secure.

For any files that you save to the cloud, use a strong password and enable two-factor authentication. You also need a plan to access your financial documents in the event your phone and computer are destroyed.

If you store documents on Google Drive, you can share them with trusted friends or family who also use Google Drive and set up a friend or family member’s e-mail for your account recovery. If you forget the password to your Google account, which includes your Google Drive, your recovery contact can reset your password. If you’re an Apple user, your main recourse is to back up files consistently to the cloud so you can access them with your Apple ID and password later. You may want to share your Apple ID with a trusted friend or family member. If your iPhone or Mac computer is damaged, you’ll need your ID to restore backup files to your new device. Keep in mind that Apple doesn’t allow you to grant emergency access to iCloud to others.

Some password-management programs have an emergency access setting. LastPass Premium, which costs  $3 a month, allows you to add emergency contacts to your account and specify when the contacts are allowed into the vault that houses your passwords. You can grant access to your vault either immediately after a request or after a 24- or 48-hour period. The longer wait time allows you to deny a request if you think it was made by mistake or isn’t needed. LastPass Premium also lets you attach copies of documents, such as your passport and Social Security card. 

Another option: Ask your financial adviser if he or she has software that will encrypt your documents. “Many advisers, including myself, provide their clients access to software that offers a secure place to upload and store important documents,” says Matthew Crum, a CFP and founder of True North Financial Services in Kinnelon, N.J. You can also leave copies of your will and power of attorney with your attorney and any health care proxies and other directives with your doctor. 

Make a Video Record

To thoroughly document your belongings, walk through your entire residence recording video to create a record, suggests Gregory Hill, training manager at Colonial Claims, an insurance adjuster in Dunedin, Florida. Be sure to describe each item including the quantity and product serial number. Hill suggested making sure the video is organized and follows a pattern. “So, a person would be best to start with an identifier of the home such as a street address or mailbox numbers panning along the front of the home, and working their way around it, either left to right showing each elevation of the home and any specialties located on that elevation.

“If there is any equipment, they should identify that equipment and show model/serial information so that like, kind, and quality of equipment can be replaced if lost or damaged (any modern cell phone camera/recorder will produce professional results). When continuing the video to the interior of the home they should keep consistent with their progression from room to room and identify items inside cabinetry or items of value.”   

Keep a copy of the video footage that’s accessible from anywhere – saved to the cloud, like those critical documents. The inventory will help you determine whether you have enough coverage for your home’s contents and document for tax purposes losses that insurance doesn’t reimburse. Regularly update your inventory, especially after making major purchases or receiving expensive gifts. 


Chapter 7 vs. Chapter 13 Bankruptcy Differences – Which Is Better to File?

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It’s easy to be in denial about debt. But when anxiety and fear take over, it can affect more than just your financial life. If you feel paralyzed by crushing debt, know that there’s a way out: bankruptcy.

Whether you opt for Chapter 7 or Chapter 13 bankruptcy, it won’t be an easy road. But it can help you regain control of your life and get back on solid financial footing.

How it works depends on which one you choose. And that may depend on your individual circumstances. So it pays to understand the ins and outs of both before deciding which one’s right for you.

Chapter 7 vs. Chapter 13 Bankruptcy

Before you file bankruptcy, it’s vital to understand that some debts are treated differently in bankruptcy. Priority debts will stick around afterward, whether you choose Chapter 7 or Chapter 13. If you owe child support or alimony or have tax debt or federal student loans, you can’t use bankruptcy to eliminate them. 

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Bankruptcy also might not eliminate any secured debts you have. Secured debts are anything that’s backed by collateral, usually the thing you’re buying with the loan, such as your mortgage payments or car loans.

That doesn’t mean you have to surrender your home or car when you file bankruptcy. Instead, you can continue making payments on those debts, though how that happens depends on which type of bankruptcy you choose. If you still owe on them, you continue to pay your secured loans after the bankruptcy is over too. 

In both cases, when you file for bankruptcy, the court issues an automatic stay, which prevents your creditors or collection agencies from attempting to collect your debts. Both types of bankruptcy can help you keep certain types of property and give you a bit of breathing room. Both also require credit counseling no more than 180 days before filing. 

But there are some crucial differences between Chapter 7 and 13 bankruptcy. 

Chapter 7 Bankruptcy – The Quick and Easy Option

Chapter 7 is generally the quicker and easier option, as it’s usually over within a few months and entirely discharges any qualifying debt. It’s a liquidation bankruptcy, meaning the trustee might sell (liquidate) your assets to pay down your debts. If you only have unsecured, nonpriority debts and don’t have a lot of assets, Chapter 7 is usually the better option.

During Chapter 7, the bankruptcy trustee, an individual the court assigns to represent your estate in bankruptcy, can sell your belongings, whether they’re high-value items like a boat or motorcycle or lower-value items like furniture or designer clothing. 

Chapter 7 does have income limits, so you might not qualify if you earn too much or if your debt-to-income ratio, the amount of debt you owe versus how much you make expressed as a percentage of how much of your income goes toward debts, isn’t high enough. That in addition to your family size is what the government calls a “means test.” 

Debts you can discharge in Chapter 7 bankruptcy include:

  • Credit card debt
  • Medical debt
  • Past-due rent
  • Personal loans
  • Past-due federal and state income taxes (at least three years old)
  • Past-due utility bills
  • Past-due attorney’s fees
  • Civil court judgments

Secured debts, which are backed by property, such as a car or house, get treated differently in Chapter 7. You can discharge any back debt on them, provided you give up the collateral. If you want to keep the property connected to secured debts, you must reaffirm the debt and continue making payments. You need to be up-to-date on payments to do so.

If you’re behind on secured debts, there’s a risk of losing the collateral (such as your home). Even if you don’t discharge it, the trustee can sell it if there’s enough equity built up. 

But you might qualify for an exemption, depending on the property type. An exemption protects your property from creditors. But if you owe a lot, the exemption might not be enough to fully protect you.

There are several advantages to Chapter 7 bankruptcy.

  • You can wipe out unsecured debts (and potentially secured debts), giving you a fresh start.
  • It happens quickly, in as little as a few months.
  • It gets creditors and collection agencies off your back.

But there are some significant disadvantages you should consider:

  • The bankruptcy trustee can sell certain possessions.
  • You’re at the risk of a foreclosure on your home or repossession of your car, as it doesn’t give you the option to catch up if you’ve fallen behind on payments.
  • The bankruptcy can stay on your credit report for a decade.
  • Your credit score will drop, though it may not be that much and might be preferable to debt.

Chapter 13 Bankruptcy – Debt Reorganization and Payment Plan

If you don’t qualify for Chapter 7, Chapter 13 is the way to go. Unlike Chapter 7, Chapter 13 requires you to pay off your debts through a payment plan created by the bankruptcy trustee. Chapter 13 is a reorganization bankruptcy since the payment plan rearranges your debts. 

Note that there is a limit to how much debt you can have to qualify for Chapter 13. You need to have less than $465,275 in unsecured debts and less than $1,395,875 in secured debts. 

The trustee will rank your debts under the payment plan to ensure priority debts (such as alimony) get paid in full by the time the plan is complete (in three to five years). The plan will also account for secured debts you have and, if you can afford to pay them, unsecured debts. The amount you pay under the payment plan is based on your monthly income.

Chapter 13 takes longer than Chapter 7, in some cases up to five years. How long depends on the repayment plan. If your income is below the state’s median monthly income, your plan lasts three years. If you earn more than the state median income, it lasts five years.

Chapter 13 bankruptcy lets you discharge a few more debts than Chapter 7. The additional debt types you can discharge in Chapter 13 include: 

  • Debts for malicious and willful injury to property (but not to a person)
  • Debts to pay for nondischargeable tax obligations
  • Debts connected to property settlements in a divorce or separation (other than support obligations like alimony and child support)
  • Outstanding debts from a previous bankruptcy in which the court denied your discharge 
  • Retirement account loans 
  • Any homeowners association or condominium fees due after your filing date
  • Certain noncriminal government fines and penalties

You must continue making payments on secured debts if you want to keep the property associated with them. The benefit of Chapter 13 is that it allows you to reschedule the debt and potentially reduce the value of some property types, such as a car. 

With Chapter 13, you can continue to make payments on secured debts once the payment plan is complete. You don’t have to pay them in full within three to five years. 

While Chapter 13 doesn’t entirely erase your debt, there are several reasons people often view it more favorably than Chapter 7.

  • It creates a payment plan to make your debt more manageable.
  • It impacts your credit score less than Chapter 7.
  • You can keep your house and other assets as long as you pay the debts connected to them.
  • It gets creditors and collection agencies off of your back.

But there are still some significant disadvantages.

  • The process takes much longer than Chapter 7.
  • You might have difficulty making payments under your payment plan unless you make and stick to a budget.
  • The bankruptcy will stay on your credit report for seven years.
  • Your credit score will drop, though it may not be that much and it may be preferable to staying in debt.

Which Is Right for You: Chapter 7 or Chapter 13 Bankruptcy?

Whether it’s best to file Chapter 7 or 13 largely depends on your income and what types of debt you have. 

You Should File Chapter 7 Bankruptcy If…

Overall, Chapter 7 bankruptcy is best for lower-income Americans who are in way over their heads. Chapter 7 bankruptcy is a better fit if:

  • Your Income Is Below the Median in Your State. You need to pass a means test to be eligible for Chapter 7. You automatically pass the test if you earn less than the median monthly income in your state.
  • You Don’t Have a Lot of Assets. Your bankruptcy trustee can sell your stuff to pay off creditors during Chapter 7. While there are exemptions, it’s usually better for a debtor not to have a lot of assets or possessions when they file for Chapter 7 bankruptcy.
  • You Mainly Have Unsecured Debts. If you owe back taxes, alimony, child support, or student loans, bankruptcy won’t help. You’re still on the hook if you have secured debts and want to keep the collateral. Chapter 7 isn’t a magical get-out-of-debt-free pass. But if you have credit card debt, medical bills, or unsecured personal loans, Chapter 7 can give you a fresh start.  
  • You Don’t Have Enough Disposable Income to Repay Your Debts. You can pass the means test even if your income is above the state median, provided your disposable income (what’s left over after you pay for all your necessary expenses) isn’t enough to cover your monthly debt payments. 

You Should File Chapter 13 Bankruptcy If…

If you have ample income but still struggle to make your payments, Chapter 13 might be a better fit. Chapter 13 bankruptcy is a better fit if:

  • Your Income Is Above the State Median. To qualify for Chapter 13, you need to have a regular income. If you don’t pass the means test for Chapter 7, Chapter 13 might be your better option.
  • You Own Your Home or Car. Filing Chapter 13 can keep your home out of foreclosure, as you have the option of catching up on your mortgage payments. You can also catch up on other types of secured debt, such as your car loan. 
  • You Don’t Have Too Much Debt. Chapter 13 has an unsecured debt limit of $465,275

and a limit of $1,395,875 for secured debt. If you owe more, Chapter 11, which is usually reserved for businesses, might be the better choice for you.

  • You Can Afford the Monthly Payment. To get a discharge from Chapter 13, meaning you’re free of all your unsecured debts, you need to complete your payment plan. That means you need to be able to afford the monthly payment. If you believe your income will remain steady in the future, you can feel pretty good about filing Chapter 13.

Final Word

Whether you end up filing for Chapter 7 or Chapter 13, bankruptcy isn’t something to rush into. The bankruptcy courts seem to recognize that, as all filers need to complete a credit counseling course during which they learn about their debt repayment options and carefully evaluate whether bankruptcy is the best choice before they file.

But ensure you speak with a bankruptcy attorney to get a better sense of what your bankruptcy options are first. It’s very difficult to successfully file bankruptcy without one. 

Speaking with a fiduciary financial advisor can also help you decide if Chapter 7 or 13 will provide the relief you need or if another debt relief option, such as negotiating with your lenders or getting on a debt management plan, is the right choice.

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Amy Freeman is a freelance writer living in Philadelphia, PA. Her interest in personal finance and budgeting began when she was earning an MFA in theater, living in one of the most expensive cities in the country (Brooklyn, NY) on a student’s budget. You can read more of her work on her website, Amy E. Freeman.


Dear Penny: Am I Wrong if I Don’t Leave My Family an Inheritance?

Dear Penny,

I am a single 40-something woman, and my mother recently passed in October. I have an older brother and sister, and they are both married with kids. The three of us will be splitting the inheritance equally. 

I’m more aware than ever that I will have to make a will myself now. My siblings insist that I should be leaving my estate to their children, and I was rather taken aback. Should I be obligated to leave my money to my nieces and nephews because I chose not to get married or have children? Any advice?

-Where Should I Leave My Money?

Dear Where,

Your brother and sister have some real nerve. You’re not obligated to leave your nieces and nephews a penny if you don’t want to. The entitlement some people feel surrounding inheritances will never cease to astonish me.

You get to decide what happens to your money and property when you die. Often the people we hold dearest aren’t blood relatives. If you died tomorrow, where would you want your money to go? To a close friend or significant other? A favorite charity? Your alma mater? Your pets? (Animals can’t actually inherit money, but many people set up a pet trust to ensure their furry pal’s ongoing care.)

But without a will, your state’s intestacy laws will determine who gets your property. If your parents are both deceased, your siblings would probably get your money and belongings. If you outlive your siblings, a court would distribute your estate to whomever it determines is your next of kin. That very well may be your nieces and nephews. So please don’t delay making a will, even though you’re relatively young.

While it’s important to have an estate plan for when you die, let’s talk about your estate plan for while you’re still alive. Specifically, who would you want making decisions for you if you became incapacitated?

Estate planning looks a lot different for single, childless people like you and me than it does for our married counterparts. We don’t have dependents who would suffer financially if we died suddenly. But when you’re married, your spouse is often the default decision maker if you’re unable to make important medical and financial choices.

For any single person, it’s essential to appoint someone you trust to make those decisions. Otherwise, a court will appoint someone to act on your behalf.

You need a financial power of attorney document that states who should manage your money and pay your bills in the event you’re unable. A medical power of attorney document is also necessary to specify who you want to make healthcare decisions on your behalf if necessary.

If possible, you should work with an experienced attorney to create a full estate plan. Some websites also allow you to draft basic estate planning documents, often for $100 or less. A DIY estate plan isn’t as airtight as one that’s crafted by an attorney, though it’s certainly better than nothing. If you think there’s any possibility your family would contest your will, it’s definitely worth it to shell out money for an attorney.

There are a few easy estate-planning moves you can make in just a few minutes. Make sure the beneficiaries of any retirement accounts or life insurance policies are up to date. These assets usually avoid probate and go directly to the person listed as the beneficiary. You can also list a payable on death designation for your bank accounts so they can bypass probate and go directly to the beneficiary as well.

As a single person, you’ll want to revisit your estate plan on a schedule — say, every two or three years. Often, people revisit their wills and beneficiary designations after events like a marriage or divorce, or the birth or adoption of a child.

But don’t let your brother and sister pressure you into leaving your nieces and nephews anything. In fact, I don’t think you need to discuss this matter any further with them if you don’t want to.

This is about you and your legacy. If your siblings want their kids to receive an inheritance someday, they should specify that in their own wills.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].

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