Bankruptcy is meant for those people who find themselves in a whole so deep that they will not realistically be able to climb out of it given their current/future earnings.

Many bankruptcies result from medical expenses. This is tragic and an outrage and it is unfortunate that sometimes the only solution is bankruptcy. In these cases it's the best alternative and their should be no stigma attached.

Another source of bankruptcy is excessively easy credit. In these cases bankruptcy makes sense if you are so overburdened that there is no way to climb out. i.e. you are paying credit card companies huge interest over years. Unfortunately, we all end up paying for this kind of bankruptcy and better planning/discipline could often prevent it. This kind of bankruptcy should have some kind of stigma because easy credit is not an excuse for bad management. But it's also wrong for credit companies to provide this kind of access/temptation and then gouge people. Often credit companies will negotiate these without the need to go to bankruptcy - especially if that is a looming threat.

There is a penalty for bankruptcy and their should be otherwise it would be a get-out-of-debt-free card. Your ability to get future credit will suffer. You can get it, but it will be much harder. That's probably a good thing since it will force you to live within your means. But so much of todays commerce is credit oriented that it can be somewhat debilitating.

If your debt is based on circumstances that will not change and you are paying outrageous amounts of interest to credit companies who won't renegotiate then you should consider it.

Personal bankruptcy is unfairly stigmatized; there are many scenarios in which it is a very helpful option for serious individuals who wish to get their financial house in order.

A good way to learn whether it is viable for your specific circumstances is to attend the King County Bar Association's free "Make Change" clinic. I recently attended a session with a friend (true!) and can recommend it without hesitation as a tool for evaluating one's personal debt obligations, and specifically, identifying which of the multiple type of bankruptcy filings might be a good fit.

As an added bonus, my pal felt confident enough about one of the presenting attorneys to hire him for his case, and very affordably, I might add.

Don't let fear or shame get in the way of informing yourself about the options. A high percentage of personal bankruptcies are followed by a lifetime of responsible financial behavior. Good luck!

 

I've got a couple of WA GET plans for my kids. It used to be a great deal, but now it's not. The idea is that it appreciates at the same rate as school tuition of the most expensive Washington school (typically UW). If UW tuition goes up 30%, then the value of your GET plan goes up 30%. If you have enough money in there for one year of tuition in 2011, then you still will have enough for one year in 2025, or whenever your kid goes to school. It was also nice in that it was completely flexible for in-state, out-of-state, or vocational tuition, and could also be used for books, room-and-board, etc.

But, there's a catch. Thanks to massive state spending cuts, UW tuition has been going up at astronomical rates each year --- 20%, 30%, etc. Since there's no possible way for an investment fund to guarantee that rate of return (especially in this economy), the cost of paying into the plan is now much higher than what you can pull out. 

One GET unit (100 units is equivalent to a year's tuition) is now worth $102, but it costs you $163. This is a whopping 60% markup! Just a couple of years ago, this was more like a 10% markup, and you'd more-or-less recover that in a year or so, and you could count on a 7-8% per year average annual return thereafter. Now, it's more like 10 years before you recover the initial mark-up, which renders the entire plan useless. It's our fine state's passive-aggressive way of killing the program without actually killing the program.

So, now I'm shopping around for a different plan ...

I realize that I didn't really answer your question, other than squashing the idea of starting a GET plan. I'm curious to hear other answers.

Hi Grant. Have you tried contacting your creditors directly and negotiating a settlement? Debt consolidators and credit counselors can't actually do anything for you that you can't do for yourself right now. (Debt consolidators tend to waste everyone's time and accrue more interest for you without lowering your payments at all.) Cut out the middlemen and try to negotiate for a lower total payment or at least a schedule of smaller monthly payments. You'll have better luck doing this with medical bills and credit card debt. Student loans are going to be a tougher row to hoe.

Mr. Rickibot works in collections, and he always appreciates it when debtors call in with realistic settlement offers that his clients will go for. Offering to settle at 10 cents on the dollar is not realistic, but maybe 75 cents on the dollar is. Your bill payments will still hurt, but they'll hurt less. Be upfront about what you can truly afford, and you'll be more likely to come to an agreement over a reduced amount or a less heinous payment schedule. Ask about claiming hardship status if that applies to your situation. Otherwise, do as Dan Williams suggests and schedule a consult with a bankruptcy attorney. Contrary to popular belief, declaring bankruptcy is not a financial death sentence. It can be a relief just to know what your options are. Good luck, man.

529 Plans appear more complicated than they really are. First of all they are set up by states, so pretty much every state has one or more plans. WA has one, called GET and it's pretty lame.

The general rules with 529 Plans are that you can live in any state, get a plan from any other state and then use the proceeds for a school in any third state. Some plans require you be a resident, but most don't.

The key thing with choosing a plan is making sure it managed by a reputable firm with a good investment track record and that the investment strategy is adapted to fit the age of the child as she/he nears college age (i.e. reducing risk over time).

I ended up choosing Michigan's plan because it has an excellent track record over 1/3/5 years. Is managed by TIAA-CREF, has a very low fee structure (less than most), is easily transferable to other plans/states if desired (haven't tried that yet), and provides flexible/small minimum contributions which can be easily set up on a monthly basis if desired.

I know that both BECU and SMCU offer small business accounts and loans. I'm assuming that most credit unions also offer small business loans. Have you asked any credit unions if they can help you?

You have to remember that even the biggest credit unions, like BECU, are tiny compared to the big banks. They are generally geared to individual accounts, so I think they are more likely to help a current member get a loan to open a small business or buy a house or car. Also credit unions do not offer as much credit as banks in my experience, so I imagine the same would be true with business loans. If you have something to put up as collateral for the loan, I think you would have a better chance with a credit union.

As a credit union member, I'm glad they are more prudent than the big banks in extending credit.

Somebody else asked a similar question here a while ago, and I recommended they try Express Credit Union (see "Credit union for bad credit folk?" here). Maybe you could ask tournant directly if they checked it out.

I don't have any personal experience with Express, but part of their mission is to serve low-income people and help people who currently do their banking at check-cashing places save money. I would hope that they would be able to help you open an account and get some good credit on your history. They only have one branch in SODO, but once you open an account you can use shared branching/atms to do your banking.

There are a lot of credit unions around, so look for one or two that have branches close to you and go in and talk to someone. If you get turned down again, ask if there is anything you can do - opening a savings account like Tom suggested, or maybe getting a co-signer. But don't try every place in town - I don't know if trying to open a bank account is like trying to open a credit card account, but a lot of inquiries will make your credit score a little worse.

If you strike out with the credit unions you try, you might want to look at community banks. I know that Homestreet has really good customer service. Or you might have to stay at your current bank (I'm assuming you have an account with a big bank) until your credit improves. That might mean waiting a long time for the bill in collections to fall off your credit record (7 years, even if you pay it off). I had bad credit for a long time because I had a medical bill go to collections when I was 19; I was finally able to get a credit card as a student a few years later but I don't know how easy it is to get a student card these days.

At first, your situation sounded unlikely, but a quick google search turned up a few other people reporting that credit unions sometimes do this. However, it looks like the policy differs from credit union to credit union, so it's worth trying others.

I would try Watermark Credit Union first. If they deny you, ask if it's possible to get just a share account (this is the CU equivalent of a savings account). This would probably come with a debit card you could use for most transactions, and you could probably even use their online bill-pay system to pay for things that require a check. (Watermark's bill-pay system will actually mail a bank check to a payee if it can't do an electronic payment.)

If they let you start with just a share account, they might eventually let you open a regular checking account as well.

If Watermark denies you, try all the other credit unions.

We pay a flat rate for utilities in our rental unit; when calculating to see if we were going to be ripped off or not we found that:

With a flat rate of $75 per person per month we found that we would over pay in the summer but under pay in the winter.

Our flat rate includes Seattle City Light (electric bill), Seattle Public Utilities (water/garbage/yardwaste/recycle) Puget Sound Energy (natural gas bill).

This is just a generalization of 4 twenty-somethings living together. Our house has a full sized garbage bin and a full sized yardwaste bin (multi dwelling property with 9 people total). You guys could get the half sized ones to save money. You can throw a lot of your kitchen food waste into the yardwaste bin for municipal composting including raw meat and greasy pizza boxes.

If I remember correctly from back when the utilities were in our own names, our every two month electricity bill was only like $60-70.

Have you looked at apartment prices? Might as well try to rent a house. During the summer you'll love your yard.

You should consult a cost of living calculator to compare Seattle to your current City. It's all relative. If you're moving from Manhattan, you'll probably be able to adapt just fine. If you're coming here from Wichita, you're going to be in for a shock. Here's a good cost of living calculator: http://www.bestplaces.net/col/

As for utilities, Seattle has some of the cheapest electricity in the United States. The City owns a municipal cooperative (Seattle City Light) that supplies power to the city from publicly owned hydroelectric dams.

As for "Gas" I'm not sure if you mean natural gas for the home or gasoline for the car. Natural gas, I think we're pretty average. Rates are set by a State Utilities Commission. As for gasoline, we're consistently one of the more expensive cities in the US for gasoline, usually only San Francisco and Honolulu are higher.

Groceries, it depends on what you're accustomed to eating. If you're willing to spend for it, Seattle offers some of the best local and organic produce and seafood you can find anywhere. If you're more into bargain shopping, stores like Fred Meyer and Costco can help you keep the grocery bill down to earth. Grocery costs in general are comparable to other medium size American cities.

Housing is expensive in Seattle, you should prepare yourself for that. If you're willing to commute, there are still bargains to be had in outlying communities like Renton, Kent, Snohomish and Everett. But be prepared for the fact that keeping a roof over your head will probably cost more than you'd expect, again, unless you're moving from New York City or San Francisco. It's all relative.

I'm no expert, but my gut tells me you'll be ok on 65k a year with 4 kids. It will be a little lean, but you'll get by. Avoid things like buying a new car or taking expensive vacations, and you should make it just fine.

Welcome to the Emerald City.

You SHOULD do fine,especially with the young ones.
just be wise to clothing /prices !!And,of course ,
watch for specials at your favorite eatery !!!
I raised 1 son on 30k a year....House mortgage and all........Bobby Gee,Bellevue

The biggest drain by far would be housing.

My estimate is that 65K for a family of four that doesn't own their house would be almost like living in poverty.

Add in the high taxes and fees and it gets worse.

- BoA espouses that all their branches make things so convenient. But only if you are looking for redundant services everywhere.

If you experience an error on their part and get it resolved at one branch, but through more human error your problem persist into the next day; you have to go back to the same branch for anyone to know what you are talking about. Otherwise if you go to a different branch you have to start explaining things from the beginning and they have to get the first branch you visited on the phone to corroborate your narrative. There is no special notes section to enable multiple customer service agents to help you with one on-going problem.

Granted I don't know if any institutions have a notes section.

One advantage is free, interest bearing checking and savings accounts. We've earned about $30 total on our five accounts since we transferred in April. Not much, but we don't pay any fees (BofA's douchey move on debit cards would have cost us $10 a month).

I'm sorry I don't buy all these "because it's non-profit so it's obviously better" answers. This is extremely naive and knee-jerk-y.

Non-profits can still pay ridiculous amounts of money to their executives. Go see the American Cancer Society as a classic example of a non-profit gone horribly wrong.

I respect making choices based on ideology but eventually you're just going to be shooting yourself in the foot, especially if you accept inaccurate platitudes like "non-profit = better" without any critical thought.

Move to Cuba!

Yes to credit unions. I like watermark. One negative is a tendency to be stingy with credit. They are less likely to loan you money and tend to keep credit limits low. They are still better than banks but you did ask for any differences.

Credit Unions are way more better than banks, for the simple reason that they are member-owned cooperatives and not for-profit corporations. As a member, you are the owner of the institution. Their incentive is to charge you low interest rates on loans, pay you high interest rates on deposits and charge you low fees. They do this because they want to keep you, their member/owner happy and prosperous.

Banks, on the other hand, have the reverse incentive. Because they are for-profit institutions owned by stockholders, their incentive is to charge you high interest rates on loans, pay you low interest rates on deposits and charge you high fees.

I do almost everything through my local credit union. They're great. When I call them, I can get a human on the phone in 30 seconds, and if I overdraft, the fee is only $13.

I still have my Bank of America account for one reason though: I travel, and they are in all 50 states. Bank of America sucks balls, their customer service is atrocious and their overdraft fee is $35. But, if you're in Anchorage or Miami, or Boston or Albuquerque, you can cash a check. That's the only thing those rat bastards have going for them. They're everywhere.

I just happened to post a blog about this yesterday - here's the link, but I'll paste what I wrote below.

 

What is a credit union?

I've already explained why I think that now is a good time to switch from your bank to a local credit union. Here are some qualities of credit unions that make them different from commercial banks (e.g., Bank of America, Citibank, Chase, and Wells Fargo), and, in my view, far superior.
A credit union: Is a not-for-profit institution (commercial banks are for-profit companies, which is fine, but you should know that their priority is to increase shareholder value, not to serve customers and protect their money)   Is governed by a volunteer board of directors, elected by members - and if you have an account, you are a member, and can vote Is generally locally-based, and customer friendly Offers credit cards, loans and business account-services, in addition to checking and savings accounts is usually federally insured, just like banks, up to $250,000 (through the NCUA) - check the bottom of their webpage to confirm (BECU andWSECU are insured) often has agreements with other credit unions, so you can use ATMs of other institutions In almost all ways, it feels just like a regular, community bank (For more info, check out the Move Your Money Project.)


So if you are reading this, consider reading up on credit unions and transferring your money to them. No matter what you politics are, you will probably be happy with your decision. (Here is how to find one in the U.S.)

 

I'm a member of BECU, and I've loved credit unions ever since I switched to my first one.

I was previously at Bank of America and trying to buy my first car. I went in, filled out the paperwork, and waited 3 or 4 weeks to get turned down. I went in the next day to Verity CU and filled out the paperwork and was approved in less than an hour. My point is that most banks have all their underwriters, analysts, and actuaries in a different location than their banks, and usually the process for loans and other paperwork is a much longer process with a lot more 'red tape'.

Credit unions are "member-owned", so they are not for-profit like banks are. Banks have shareholders that they report to and are beholden to make a profit for.

I love that BECU has many great options for banking that don't involve going up to a teller (and getting charged for it like BoA did). I deposit checks easily at ATMs often with no envelopes or deposit slips, and can even deposit checks online by scanning them or using my phone.

However, one thing that credit unions don't have compared to banks are an abundance of ATMs and branch locations. You can find BoA ATMs and branches all across the U.S., but of you're a member of a credit union you will generally need to look for affiliate branches (pretty much any other credit union) unless you want to pay to withdraw money. Of course, if you're using your debit card then it really doesn't matter. Credit unions will probably not ever charge for using an ATM, debit card, or speaking to a teller, but banks will.

Perhaps a better way of stating the question is to ask whether there are any disadvantages to choosing a credit union over a bank... and the answer is a simple 'no'.

All your CU choices are good and relatively comparable for basic services; just do it, you'll feel better than pitching a tent at Westlake.

How much management do you need for your IRA? Are you willing to DIY it? TD Ameritrade offers IRAs, although it would be your responsibility to plan and manage your own investments. I don't know where TD Ameritrade falls on the evil spectrum, but their system is set up to save investors money on fees. At the very least, you'd be putting less of your hard-earned money into the financial sector.

I also feel that investment services are largely bullshit. Very few fund managers outperform the S&P 500 over the long run, and those few investment geniuses out there only serve people with real money.

Although your BoA->WSECU scale is funny, it's sort of a naive question to ask if a company that has holdings in the mutli-billions is "evil" -- of course they are (in some way).

With a company this large, I guarantee someone sits on their board that funnels significant sums of money into things you find appalling.

I can vouch for Charles Schwab as a happy customer. I started with a brokerage account and over the last 5 years or so have moved my entire financial life to them. Their customer service has never been anything but perfect and I can't think of a single problem I've ever had.

Free checking with 1% interest, all ATM fees get rebated monthly, 2.5% savings, $12-fee trades (higher for mutual funds), no monthly fees or service charges (outside of brokerage) or minimum balances, can use iOS app to deposit checks from phone.

I guess my only complaint is they sold their credit card division to BoA and got out of that game. You can't get a credit card through them as far as I know, but I haven't asked for a year or so. They do not have any debit rewards program either. The only hitch I've ever run into is they do not have a way to deposit cash, even at their branch in Bellevue -- they won't accept it. I had to open a second account at a more traditional bank to deposit cash into, link it to my Schwab account, and can point-and-click transfer between the two on Schwab's website.

Anyway, all banks are at least a little bit evil. A quick Google shows Charles Schwab himself donates heavily to the Republican Party. Oh well, if you were going to make all you consumer decisions based on that, you're going to live a very tedious life.

Have you considered disability insurance and/or long-term care insurance? May be good tools to keep your income source safe or contribute to maintain a certain quality of life. Good luck.

Not a CU, but if you're gonna be going back and forth from different places, you might want to check out Charles Schwab Bank. It's an online bank, like ING direct, but they reimburse you for all ATM fees. I wouldn't put them in the same league as BoA or Chase, but they're still a regular bank.

Are you eligible for a health savings acount? It's sort of like a 401K for health costs.

http://www.mayoclinic.com/health/health-savings-accounts/GA00053

I'm perplexed that someone is downvoting you for asking about health care.

A lot of credit unions are state-chartered, so you won't find many with locations in more than one state. Russ linked you to the Co-op ATM network; a lot of credit unions also do shared branching through the CU Service Centers - see www.cuswirl.com to look up shared branching locations in Seattle and Portland.

With shared branching you go into any credit union in the network and you can make deposits or withdraw cash with your account number and ID, so it's basically like using another branch of your credit union. (I'm pretty sure you have to have your account number - the other credit union can't look that up.) The main drawback is that if you deposit a check through shared branching there can be a longer hold on it than if you deposited it directly with your own credit union.

I haven't done shared branching in Portland but haven't had any problem finding a credit union ATM there that I could get cash at with no fee. I've used many different Co-op network ATMs for withdrawals and deposits and not had any problems in the last few years accessing money when I travel.