And now time for the b A Q B keep A b A keep I love when we do the brann abission question, anansa.
Yes, and don't forget. We have a fun new segment including or a fun new segment on Fridays that we're calling BA fan Fridays because Friday was just not complete with justice, ba Q and A. We wanted to shout out some of our favorite fan mails. So this is going to be reviews that y'all have left for us on iTunes. So we're going to pluck those out and
give y'all some love on our socials. So definitely leave those reviews on iTunes or wherever you listen to the show, and maybe you'll have a special shout out on Friday.
So first question of BA Fridays Vaqa is from anonymous, So we're just gonna call you muss so Mussas. In twenty nineteen, I paid off fourteen thousand dollars off my student loan debt. COVID happened, and I didn't pay any money in twenty twenty and haven't made any payments in twenty twenty one. I've just been saving. I have thirteen thousand dollars of debt left that I can pay off today. Even with paying off the loan, I will still have
over a year's worth of savings. I'm hesitanting to pay off my loans because I was hoping for some student loan forgiveness from the Bided administration. I didn't want to pay them off and then ten thousand dollars of student loan debt be forgiven the next day. But I also just want to be debt free and officially done with nail net. Would you pay it off now? Would you wait until the government made a decision? What should I do? Ooh, muss? It is a conundrum.
Indeed, I can't with that name mus. It's just rhymes will puzz And it's just like anyway this is I love this question because I feel like a lot of folks are in this predicament right now. Like student loan you know, payments have been deferred or for you know, suspended since the pandemic hit, and it's going to be that way through January at least. Biden said that was
the last extension he was going to give. So the ball isn't his court, and he's had this investigation team looking into supposedly how he could possibly cancel student loan debt, but even if he does, it does seem like he's gonna go with just the ten k option. So there are folks who are like, I've been saving up money, or I have money, what do I do? So Tiff like, what's your first reaction to this question?
My first reaction is, Okay, well, maybe just leave the ten thousand because I get it, because I'd be highly pissed if you know, he paid it off. And I'm like, oh, so, I mean, I'm assuming that your interest rate is not too crazy because these are student loans. If you have thirteen thousand left to pay off, I don't think he's going to forgive more than ten thousand, honestly, So maybe I would pay down the three if I was feeling
some sort of way about it. And I would say, if you have all of this and you would still have a year's worth of saving saved, one, you might be saving too much because at some point, you know, it's called the law of diminishing returns, you can actually have too much savings, meaning that the money is not being put to work. I would consider, also, in the meantime, putting some of that money to work in the market, you know, investment property somehow like getting that money to grow.
I absolutely agree. I was going to say, I mean, honestly, I don't think you should give your student loans any more than you absolutely have to. So when your payment's become due, I would just look at your monthly payment and just make that payment in full each month and then take that money that you've been saving and actually start investing it, you know. And that's different for every person, and we don't know a ton about you, so it's
hard to give like specific advice. But it could be increasing how much you're contributing to your four one K if you're working or if you're not working, your individual retirement account your IRA, and think about the benefit of just sinking a big chunk of change. Like if Tiffany says you have a nice you have a nice emergency fund, you don't have other debt. You know, you're feeling financially stable, think about making a lump some contribution to an IRA,
or even maxing it out for the year. I think the limit is sixty sixty, five hundred or six thousand dollars for twenty It changes every year, so IRS DOT go for all your specific questions, but actually funding that so that the money can start working for you and start growing for you, because you know, like Tiffany said, student loan debt, the interest rate is fairly low, especially federal student loan debt, and you potentially could stand to
earn a lot more by investing your money in the market. And you know, lump some investing may sound scary, but studies show that sometimes it can be more beneficial in the long run. You'll earn more in the long run if you just kind of sink everything in and one go.
That's a super aggressive approach. But at the same time, like you want to sleep at night, and there's no wrong answer here, like paying off your student loan debts is an amazing thing, but you have to kind of weigh do you want to sleep now and feel like you've you've said like f you to neel net or would it make you even more upset if you found out that you could have got that ten k you know forgiven, and which one of those emotions is stronger, And then just make the call that you know you
you want to make that makes you feel not fulfilled, but makes you feel stable, It makes you feel like you did the right choice with the information that you have.
You know right now? Okay, we wish you well.
This listener who says we can call her Brie, says, hello, beautiful ladies, I have a question. After graduating college, I was super broke and used my Discover and Chase Chase credit cards. Both cards have been charged off and sent to collections. At this point, I'm not sure what to do. Do I reach out to Chase and Discover to try to pay it back. Well, paying the charge off card increase my credit score? Once paid? Can I have it turned back on? Since those two are my oldest credit cards?
Please help? Sad face emogree.
This is a really good question. A lot of people think like, okay, paying off old cards is going to raise their credit score. It won't. It actually is gonna bring down your score. Here's the thing about credit scores, Credit scores and credit bureaus. They like the new, the now, the current. They're like, who is breed today?
Right?
So bree today is someone yes that has cards that are charged off. But because those cards are charged off, it that means there hasn't been really any major action on them, I'm assuming in some years, but if you start paying on them now you literally bring not only the current payments but any pass payments current again, and then that becomes who you are now, and therefore your score is going to drop. So I don't know how long ago. What I would do first and foremost is
I would get my Googles on. I would say, Hey, Google, gird, you're looking cute lose away, Oh you thick thig Okay, I would say Google, what is the statute of limitations of credit card debts or revolving debt in my state, in the state of New Jersey and New York, for example, is six years. That means after six years, your debt
becomes what they call zombie debt. Now, it doesn't mean that you don't have that you don't technically owe it, like a zombie is not technically dead or alive, So it doesn't mean that you don't technically owe it, but it does mean that they can't technically come after you for it, because the state basically says, hey, you have six years to get Brie. If you were in New York and New Jersey to get Bree to pay up, you're not going to have her at ninety years old
for debt that she owed when she was twenty No. No, So if I would say, if my credit card debts were in the zombie debt zone, I would move on with my life and put my money toward other debt, you know, and paying that off and full and being timely to raise my credit score, because paying off super old debt, honestly is going to bring down your score.
Yeah, and if it's six years, you're only one year away from that falling off your credit report. So if you just hang in there and be patient and start building up that good credit behavior, then your score should definitely bounce back. I would just add when when it comes to zombie debt, it's stopping people from suing you for the debt. They can still contact you, and they will, and that's where it becomes. It's kind of like poking one of those zombies, if you imagine them like walking.
I hate zombie movies. Let me just not invoke that image anyway. But if you poke a zombie and it starts to chase you like, they'll try and call you to get you to fall for their you know, bait, take the bait. And if you even pay a dollar on an old debt, that technically has Yeah, it's statue limitations has expired, then they can it like restarts the clock, and then they can try and sue you again for it.
So that's why it's important to do what Tiffany said, find out the facts for yourself and don't believe anything they try to tell you to get you to make a payment. If you know for a fact that your statue limitations is expired or it's close to expiring, you know you can It's it's okay to focus on newer, you know, newer financial challenges, debt, saving, investing, things like that, and let that old debt expire.
Exactly, Bree, I'm glad you reach out, Boo boo, so hopefully.
Actually October if spooky season, we're talking about zombies.
Exactly, we should have a we should have a Halloween Q and a SEGMENTO of scary financial questions.
They're all terrifying.
I know.
I'm still shuddering from from the afromanimalist Christine earlier this week when she was telling me I talked to my dad about his storage shed from hell that I'm going to inherit one day. Oh my god, that's a terrifying, terrifying, question that I have to figure out how to answer for myself.
Oh oh, it's hard with family.
My daddy. You're never going to open that thrift store. You're never gonna open there. It's just not happening for you. Yeah, tough. Well, then you.
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Awesome or Amanda until next week. Booboo