Prepping For Christmas Chaos

The season of holiday shopping is here, and so is the inevitable financial stress— but don’t panic! We’re here to help you conquer the chaos and take control of your finances, so you can give great gifts and feel great about what you spent.

Budget the Day Away

The first step for tackling the holiday shopping season is setting a budget. Your budget sets the tone of your whole shopping game plan— what presents you can buy, which deals to look for, which payment type to use, and more.

Sure, you’ve probably heard the spiel about the importance of budgeting before. It can sound a bit intimidating or overwhelming at times— but it doesn’t have to be! Check out some of our budgeting services or ask for budgeting help from one of our representatives to make this daunting task easier. The internet is also laden with websites and programs that can do the budgeting for you. Find what works best for you— set up a spread sheet, scrawl it out in a notebook, or iron it out online. Find your budgeting flow.

Sit down with a nice hot cup of cocoa, wrap up in a cozy blanket, and budget away. Make a night of it and feel confident in your ability to get your finances together. You’ll thank yourself in the end.

Pick Your Weapons of Choice

There are many ways to fund your holiday shopping spree. Figure out how much money you have available to spend immediately and what items you will need to buy through credit cards or fund with holiday loans.

Our advice? Put down the high-interest rate credit cards and check out ours. Our credit cards feature interest rates significantly lower than the national average; plus, our special holiday loans help you to fund your shopping and pay it off responsibly. We understand that our members have a lot of Christmas cheer to spread, and we want to help you do it.

Start Your List, Check It Twice

Santa isn’t the only one who should have a list. Get a pen and some paper and write down everyone you want to give gifts to this season. Determine how much you can spend for each person first, then brainstorm gifts for each of your names. This is the fun part! Put on Santa’s hat and think of creative ways to spread cheer to your favorite people.

If you find yourself spreading your budget too thin, go back through and adjust the names on your list and the spending amount. Remember, not every gift needs to cost money— don’t underestimate the joy that a homemade gift or a good deed can bring to Christmas Day. 

Choose Wisely

You have your gift list, now you need to perfect it. Browse the internet to get an idea of the deals that will be happening near you, either in store or online.

Compare deals you see for the same item across stores and websites— one company may be selling the item for significantly less than another. You deserve the best deal. Put in the work to find out which stores are promoting the best sales, and make sure the item is still in budget after you factor in taxes or shipping costs. 

Finalize Your Plan of Attack

While many companies offer deals throughout the months of November and December, some are specific to days like Black Friday or Cyber Monday. These two days easily become chaotic if you don’t have a good game plan.

Research which deals are offered online and which require you to show up in-person. Because of health and safety concerns, many stores will be shifting to an online Black Friday experience, but you should still double check. Also check store hours for any place you might need to visit in-person. Regular store hours will likely be adjusted for Black Friday and COVID-19 precautions, so keep a close eye on company websites for updates.

Another shopping holiday to look out for is the lesser known but crucially important “Small Business Saturday.” It falls between Black Friday and Cyber Monday, and it is more important than ever this year. With the pandemic still in effect, small businesses are struggling to support themselves. On Small Business Saturday, local businesses will break out great deals and some even organize seasonal events for their customers. This day is a great way to give back to your community, so look into your local businesses and see how you can support them

Shop Responsibly

Now that you have a budget, a list, and a plan of attack, you are all set to shop responsibly this holiday season. The holidays are a time for joy; don’t let your finances stress you out. Instead of panic-spending and budget-breaking, take some time to prepare and research your options, like low-interest credit cards or holiday loans. You’ll be happy you did, especially when both the people on your gift list and your wallet are thanking you.

A Delicious Homecooked Meal: It’s Easier Than You Think

As the old slogan says, “Set it and forget it!” The days are getting shorter, and the nights are getting longer. Whether you’re running around with your kids, running around with your pets, or running because that is your chosen form of exercise, it feels like there are truly never enough hours in the day. Sure, your favorite local restaurant delivers, but there’s no beating a comforting homecooked meal. The average commercially prepared meal costs $13, while on the other hand, the average homecooked meal costs $4.

Now, it’s true that not everyone enjoys cooking or considers themselves that good at it. However, you can make delicious, cheap, and easy meals with an Instant Pot or Slow Cooker! We’re all about making your life easier, and so we here at Scient wanted to share some of our favorite recipes. With each recipe we’ll give you a way to dress it up, as well as a way to cut some costs.

For this set of recipes, we’ll be using an Instant Pot. It can do it all, from sautéing, pressure cooking, and everything in between. If you don’t have one, they are regularly on sale and come in various sizes. If this is your first time using an Instant Pot, be sure to read the instructions carefully.

White Chicken Chili:

Creamy, hearty, and comforting, this recipe is a new take on a classic chili. If you aren’t a bean fan, feel free to cut back on the specified amount or omit them completely. Serve this chili with tortilla chips for a completely Southwestern meal.

Ingredients For White Chicken Chili:

  • 2 Large Chicken Breasts
  • 15 oz can black beans (drained and rinsed)
  • 15 oz can white kidney beans (drained)
  • 1 medium red onion, diced
  • 15 oz can of corn (not drained)
  • 10 oz can Rotel diced tomatoes with green chilis (keep juice)
  • ½ cup chicken broth
  • 1 ½ tsp chili powder (you can use less if you want to cut down on spice)
  • 2 tsp cumin
  • Ranch dressing packet
  • 8 oz package of cream cheese cut into six pieces


  1. Place all of your ingredients into your Instant Pot bowl in the following order: 2 chicken breasts (uncooked), your drained black and white beans, chopped onion, undrained corn, undrained Rotel, and ½ cup chicken broth.
  2. Add 1 ½ tsp Chili Powder and 1 tsp cumin, as well as ranch packet. Stir everything to combine. Be sure to lift the chicken breasts slightly so that some of the juices will get underneath the chicken.
  3. Place your cut cream cheese dotted across the top of your chili. Place the lid onto the Instant Pot and seal.
  4. Cook the chili for 20 minutes on manual high pressure. Once the cooking is done, allow the Instant Pot to de-pressurize naturally for 10 more minutes. Then, completely release the pressure.
  5. Remove the chicken breasts from the mixture and shred them. PRO TIP: You can easily shred cooked chicken by placing it in a bowl and using a hand mixer. Before putting the chicken back into the chili, stir the chili. Once everything is combined, return the chicken to the chili. You’re now ready to serve.

Tip: If you want even more spice, add a diced jalapeno to your chili mixture. For more spice, use more seeds.

Money Saving Tip: If you don’t use much Cumin, buy a packet of taco seasoning. You’ll be ready for tacos and won’t have to spend money on a spice you rarely use. 

Slow Cooker Chicken and Stuffing

Even if it isn’t Thanksgiving, there is something soothing about a good stuffing. (You may prefer the term dressing, but that’s an argument for another day). The good thing is, it pairs just as well with chicken as it does with turkey. And with a recipe this easy, you can have it any time of the year! This recipe takes minimal effort and will make your home smell AMAZING. Note: for this recipe, you can use an Instant Pot or a traditional Crock Pot.


  • 14 oz bag dried seasoned stuffing mix
  • 1 sweet onion, diced
  • 2 stalks of celery, diced
  • 2 10 oz cans of cream of chicken and herb soup
  • ½ cup chicken broth
  • 1 tsp ground sage
  • 2 garlic cloves, diced
  • 1 ½ pounds boneless skinless chicken breast
  • Salt and pepper to taste


  1. Spray your Instant Pot or slow cooker with non-stick spray.
  2. Add the chicken broth and stuffing mix to the slow cooker and stir to combine.
  3. Sprinkle the sage over the top.
  4. Lay your chicken on top of your stuffing mix and season with salt, pepper, and garlic.
  5. Cover and cook on low for 4 hours and 30 minutes.
  6. Remove the chicken and shred, cube, or serve the breasts whole.
  7. You’re ready to eat!

Tip: Sage is what will give this meal a holiday flavor, but if you aren’t a fan, you can substitute for rosemary.

Money Saving Tip: Both recipes so far use chicken broth, buy a large carton of chicken broth. It will go a long way and will keep for quite some time.

Instant Pot Spaghetti

This is the ultimate in ease. You cook everything in your Instant Pot. From the noodles to the sauce. Not only that, but this is a supremely versatile dish. You can add as many veggies as you want or take out any of the veggies listed in the ingredients. Of course, you’re going to want to serve this spaghetti with garlic bread (with cheese for a real crowd pleaser).


  • 1-pound lean ground beef
  • ½ teaspoon Garlic Powder
  • ½ teaspoon Onion Powder
  • 1 tsp Italian Seasoning
  • ¼ tsp red pepper flakes (more or less depending on your spice tolerance)
  • 1-pound Spaghetti noodles
  • 24 oz jar of your favorite pasta sauce
  • 5 Mushrooms, diced
  • 36 ounces of water
  • 1 can of crushed tomatoes


  1. Turn on the Instant Pot to the sauté setting and add the ground beef. Sprinkle in the garlic powder, onion powder, Italian Seasoning. Add salt and pepper to taste. Cook the meat until completely browned, breaking up any large chunks. Once the meat is cooked, you may want to drain any excess grease.
  2. Break your spaghetti in half and place it on top of your meat. Pour over the spaghetti sauce, crushed tomatoes, water, red pepper flakes, and mushrooms. Make sure the pasta is completely submerged in the water.
  3. Seal the Instant Pot and cook for 8 minutes on manual high pressure. When the time is up, manually release the pressure. Once the pressure is released, open the Instant Pot and stir.
  4. Serve immediately.

Tip: If you aren’t the biggest beef fan, you can easily substitute Italian sausage for beef.

Money Saving Tip: Pasta is essentially universal, save yourself a couple of bucks and buy generic.

There you have it. Three meal ideas that won’t break the bank and don’t require a Michelin-Star chef to prepare. When it comes to cooking at home, just get started. Not every meal will be perfect, but the money you save will be worth it (pun intended).

Season Of Giving

Mom and daughter smiling Season of Giving

Season Of Giving Sweepstakes

When you participate in our “Celebrate the Season” Sweepstakes, a $1 donation will be made to charity and you will have a chance to win $5,000 with each qualifying digital banking transaction!*

Log in to get started or visit for additional sweepstakes details!


*Celebrate the Season Sweepstakes. NO PURCHASE OR PAYMENT NECESSARY TO ENTER OR WIN. A PURCHASE WILL NOT INCREASE YOUR CHANCES OF WINNING. Sweepstakes starts at 12:00:01 a.m. ET on 11/1/20 and ends at 11:59:59 p.m. ET on 12/31/20. Open to legal residents of the 50 United States and D.C. including the territories of Guam and Saipan who are 18 years of age and older and are registered account holders at a participating Financial Institution. To enter by mail, hand-print on a 3½” × 5” postcard: “The Celebrate the Season Sweepstakes”, full name, full mailing address, day and evening phone numbers, email address (if any) and date of birth and mail to: “Celebrate the Season Sweepstakes”, C/O MRI, P.O Box 3849, Oak Park, IL 60303-3849; postmarked by 1/2/21 and rec’d by 1/11/21. Void where prohibited. For Official Rules, visit Sponsor: Fiserv Solutions, LLC, 255 Fiserv Drive Brookfield, WI 53045. Federally insured by NCUA.

Why you should avoid store credit cards this holiday season

A recent report from LendingTree® said that 44% of consumers planned on opening a store credit card this season. However, that same report said that 56% of those who have had store credit cards in the past have regretted getting them.

Sure, those sign-up bonuses can be great but if you carry a balance on one of these cards, the interest you pay with those high APRs can easily exceed what you saved with that initial discount stores offer.

While the salesperson does a great job of talking about the perks and discounts you can get when you sign up, they almost never do an equally great job of talking about the interest rates and high payments you’ll have when you use it. In fact, the average APR for a new store credit card is 24.24%.

Here are a few tips from LendingTree® for getting the most out of a store credit card:

  • Beware of deferred interest: While special financing deals really can save you big bucks, it’s crucial that you play by the rules, because what you don’t know can cost you.
  • Know APRs and fees before you apply: This is good advice with any credit card, but it’s particularly important with store cards because the interest rates are so high, and the pressure is often on to make a quick decision.
  • Anticipate deadlines, exceptions, spending minimums:  Virtually every card has quirks and nuances. The more you know about them before you apply, the better.
  • Look for the other logo: Some store credit cards can only be used with one retailer or one group of retailers. Others can be used most anywhere. That’s an important distinction.
  • Resist the pressure: If you’re offered a card and you aren’t sure what to do, say no and then read up on the card later. If the offer still sounds good to you, apply next time you shop there.

Or, you could bypass all of the potential downfalls of the store credit cards and seek alternatives from Scient Federal Credit Union.

We offer personal loans at interest rates as low as 6.99% APR.* While you won’t get 20% off your first purchase at your favorite store, you won’t be one counted in the 59% of people with buyer’s remorse after opening that store credit card. You’ll also enjoy a much lower interest rate, which equals much lower monthly payments.

3 Ways to Supercharge Your Car Buying Savings

Are you missing out on one of the best deals in car buying? With many people opting to stay at home to social distance and stay safe, many rental company vehicles have been stationary. Why is this important?

Many companies are looking to make fast cash deals with increasing unused inventory, like Hertz, who recently filed for bankruptcy. If you decide to buy a rental vehicle, there are a few things you should do to ensure you’re buying a good vehicle.


Did you know that you could save up to 15 percent more when you purchase a rental vehicle?* While you will save a significant amount by buying a rental car, you should still look at price ranges to ensure you’re still getting a great deal.

We also recommend researching and checking out the car as you would if you were buying it new. Be sure to consider which vehicle you believe to be the best fit for your lifestyle and determine your budget from there. Remember, you will need to take extra precautions when purchasing a car used from such a company — even if you’re considering a certified vehicle.

We also recommend checking for any vehicle recalls. If there is, take the extra step to cross-reference the recall with a vehicle history report — rental car companies have been required to fix these issues for at least the past four years.


Many rental car companies have a lengthy trial period. Use this time to your benefit and conduct an independent vehicle inspection before you buy it. Even certified vehicles should be inspected to ensure that your vehicle is safe and that you make a solid purchase. Along with reviewing recalls and the vehicle history report, this could go a long way in putting your mind at ease when buying a used vehicle from a rental company.


The purchase price of the vehicle is only one step in the process. While rental car companies can save you up to 15 percent more when buying one of their vehicles, getting the right financing can significantly boost your savings. When you secure pre-approval with Scient Federal Credit Union, you can ensure you not only get a great overall price, but you’ll also snag an affordable rate and monthly payment. See your options for financing your next vehicle and check out our affordable rates on auto loans and apply for an auto loan today for your best deal!


*Source: CNN Business

Taking Care of Yourself: A Safe Investment

72% of Americans admit to being stressed about money. Of that 72%, 22% said they would classify their stress as “extreme.” Financial stress has been linked to migraines, insomnia, and even cardiovascular disease. Not only can financial stress take a toll on your health, it can also cause you to incur some hefty medical bills. That’s why we want to present you with some ways to unwind, destress, and just take care of yourself. If you aren’t taking care of yourself, how are you going to take care of anything or anyone else?

Don’t Let Stress Go Unchecked

Stress is an inevitable part of life, but it is one that you can manage if you know the right tips and tricks. For many, their version of stress relief is a pint of ice cream in front of their favorite TV show or movie. While this can be a good temporary fix, your stress is still bubbling under the surface, lurking, and waiting to bring you down. Luckily, you’re already on the right track by sitting in front of the TV. Take this a step further, try and clear your mind of thoughts and breathe deeply in through the nose and out through the mouth. Do this five times and you will feel yourself start to relax. You may think this inconsequential, but consider this, a recent study showed that 1/3 of doctor visits are for stress-related issues. The same study showed that almost 70% of people who report excessive stress suffered from sleep deprivation. The aforementioned breathing exercise is a good starting point for stress relief, but what else can we do?

Move Your Body

Getting active has so many benefits, it just so happens that one of them is stress relief. The good thing is, you don’t have to be doing a hardcore workout for it to be considered physical activity. You CAN do a hardcore workout if that’s your thing, but you could also do yoga, run laps around your house, or even sweat to the oldies. When you move your body, you release endorphins (those are the things that make you feel good). You also focus your mind on your body and less on the things that are stressing you. So even if your physical activity consists of rolling around on the floor with your pet, do it! If you are looking for cost-effective options, check out YouTube™. Many fitness instructors post free videos with step-by-step instructions for beginners to pros. The best part? They’re free!

Let Your Creativity Flow

 We all have creative outlets that let us express our true selves. However, when we get too stressed, our hobbies can fall by the wayside. Little did we know, this is counterproductive. A medical study in 2017 found that 75% of participants in the study produced significantly fewer stress hormones when they were practicing a creative activity they were passionate about. Pick up that camera, write in that journal, and paint that blank canvas. You’ll be making beautiful art AND reducing your stress. An easy, cheap creative activity is coloring. There are all kinds of coloring books (Lisa Frank, anyone?) for adults and crayons or colored pencils can be purchased on the cheap.

Talk It Out

In this digital age, we are more connected than ever, use that to your advantage! Your friends are your chosen support network. Studies show that listening and being listened to are great ways to manage stress. Schedule weekly video calls with your friends and loved ones just to check in. You’ll all feel so much better and you won’t have to spend a dime.

Laughter IS the Best Medicine

Sometimes, you just have to laugh. Find something that tickles your funny bone and run with it (literally if that’s your physical activity). Laughing increases your intake of oxygen which activates your organs. It can also stimulate your circulation which eases muscle tension and will help you relax. Laughter also has been shown to have overall mood-boosting effects. So, tell a joke, watch a funny movie, or just have a conversation with your funniest friend.

The thing about stress, is that it is universal. We all experience stress from time-to-time. That is why we must approach each other with empathy. We don’t know what a person is dealing with day-to-day. When it comes to our members, we care about more than just your financial well-being. We care about you as an individual. If your finances are causing you stress and you need help, don’t be afraid to reach out. We’re here to help.

Personal Loan or Personal Line of Credit?

cash fanned out across a grey background

When it comes to Personal Loans and Personal Lines of Credit, the options for how to use the funds are endless. However, while both offer flexibility in all the different ways you can use the funds, there are certain instances where choosing a Personal Loan would be a better fit than a Personal Line of Credit and vice versa. Let’s explore your options and help determine which is the best choice for you and your budget.

Consider the nature of the expense.

Personal Loans are distributed in one lump sum and are typically best for large, one-time expenses. Examples include back-to-school costs, paying off high-interest debt, and higher education costs are a few examples. In contrast, Personal Lines of Credit are revolving and operate similarly to a credit card where you only pay on the amount you use for a specified term. This credit line is consistently available – once you pay off the money you have borrowed, the funds open up again.

A Personal Line of Credit can be optimal if you aren’t sure how much money you will need to borrow or for how long. Examples of ways to use a Personal Line of Credit are: supplementing irregular income, home improvements, and backup for when unexpected expenses arise. Therefore, if you’re looking for a shorter-term solution, a Personal Loan might be the better option if you’re also considering a Personal Line of Credit.

Evaluate the terms and how it fits with your budget.

An easy way to remember the difference between a Personal Loan from a Personal Line of Credit is a loan has a fixed interest rate and a line of credit is based on the prime rate and can change over the term. Therefore, if you’re looking for a way to budget a certain amount each month, a Personal Loan ensures you pay a set amount each month for the life of the loan. With a Personal Line of Credit, while the term is longer and you only pay on what you use. For example, if you are extended a $10,000 credit line and only use $2,000 of the money, you will only have to make payments on the amount you’ve used. Alternatively, if you have a Personal Loan, you make payments on the total amount of money borrowed, whether you’ve used the funds or not.

Qualifying for a Personal Loan vs. a Personal Line of Credit

Typically, receiving approval for a Personal Line of Credit is more challenging to obtain than a Personal Loan. Why? Due to the flexible nature of a Personal Line of Credit, having a healthy credit score plays a significant factor in the decision to approve funding. Whereas, a Personal Loan with its fixed term and amount borrowed, allow for easier approvals.

Making the decision

Why is it important to know the differences beyond the interest rate when it comes down to Personal Loans and Personal Lines of Credit? While often confused, these loan types have distinct differences that, if not chosen wisely, you could end up paying more. If you’re looking to fund your next step, Scient Federal Credit Union can help you achieve your goals. Talk to us today about your options and how to choose the right solution for you.

What Are Your Financial Vices Costing You?

2 cheeseburgers, fries and onion rings on a tray

What is one thing you just cannot live without? You know, those little indulgences that help us make it through the day? For some of us, it’s a jolt of caffeine. For others, Netflix and Hulu offer a sweet escape from the hustle and bustle of everyday life. What we sometimes don’t think about is that these things can be a constant drain on our wallets. Here are some things that we could be spending more money on than we intend to and ways you can cut those costs.

Coffee/Energy Drinks

The mid-morning slump, the mid-afternoon slump, and the post-mid-afternoon slump. Ok, we made that last one up, but sometimes the day seems to drag on for way longer than seemingly possible. Some people reach for the nearest Starbucks to replenish their energy reserves. Some crack open an energy drink in the hopes of pushing them through the rest of the day. What neither often consider is that these sources of liquid energy can add up. The average price of a cup of regular (non-latte) coffee from Starbucks is $1.89. That may not seem like much but consider this: an American who drinks coffee at home will save approximately $427 over those who regularly visit coffeeshops. When we look at energy drinks, on average, they cost anywhere between $2-$4. It can be almost double the cost of coffee. A cheaper alternative – green tea! If saving money is high on your priority list, put your at-home barista skills to work.

Subscription Services

From exotic snacks to pet toys, a new wardrobe, and everything in between, there is a subscription service for everything these days. Many, in fact, sometimes forget how many we have subscribed to, leading to a big bill each month. Arguably the most common subscription is Netflix, which will cost you $12.99 a month (if you only want the standard package). Add in Hulu ($5.99), BarkBox ($22), and StitchFix ($20), and you now have a monthly subscription bill of slightly over $60. See how fast that adds up? Not to mention the ever-popular meal subscription services can run about $200 a month. While these modern conveniences are well…convenient, they are also pricey. Most of us don’t want to give up our Netflix, and that’s fine. Take a hard look at your subscriptions. Are you getting your money’s worth? Do you eat all the meals from the meal kit? Do you keep enough from StitchFix that the $20 a month fee is worth it? Odds are, you’ll find one or two subscriptions you can live without. Your quality of life will stay the same, and you’ll save money.

Take Out

Do you look at a recipe and instantly get woozy? We get it; cooking isn’t for everyone, and take out can taste so good. Before you pull up DoorDash or GrubHub, consider that the average household spends 3,000 dollars a year dining out. That’s no small amount. On a closer look, a prepared meal at a restaurant costs, on average, $13. Compare that to the average cost of groceries per person for an at-home meal…$4. Yes, that is a $9 savings just from eating at home. The good news is, you don’t have to stop eating out altogether. If you cook at home twice a week, you’ll save a little over $900! More good news is that anyone can cook. All it takes is a little preparation. Plan your meals, choose easy recipes, and don’t expect every meal you prepare to be a Michelin-star experience. Casseroles are an easy meal that is also cheap and tasty, even if they won’t be winning any fancy food contests. If you are completely opposed to cooking, be responsible with your take out. Choose locally-owned businesses and restaurants so that your money is stimulating the local economy. When you use a big delivery service, you aren’t just paying for the food. Your total also includes a service fee, tax, a delivery fee, and a tip. Many times your order total will be doubled. A recent study showed that your meal will cost you 32.8% more when you order food from DoorDash vs ordering directly from a restaurant.

Online Shopping

“Add To Cart.” The temptation is always just a click away. Surfing the net can bring some expensive side effects as we see a constant flood of targeted ads. It is like they know exactly what you’re looking for! Uncanny, isn’t it? When someone meets our wants and needs (and at such deal), we have a hard time passing it up. AND free shipping? It can lead to financial death by a thousand cuts. Sure, you are getting good deals on your online purchases, but this can also make us feel like we can buy just one more thing. Soon, our whole budget has been blown on online shopping. There are many ways you can curb this habit. For starters, make sure to delete your payment information from auto-populating in services like PayPal. Secondly, set strict limits on yourself. In your budget, set aside some funds for “Online Shopping.” If you know this is the only money you have to splurge, you might think twice before clicking “complete purchase.” 

If you do any of the things above, the first thing to remember is not to get discouraged. A cup of coffee or a new shirt never hurt anyone. With most things in life, our financial vices are all about moderation. We wouldn’t expect you never to visit a Starbucks or eat out again. Set realistic goals for yourself and hold yourself accountable; you’ll be amazed at the savings. To easily keep a pulse on your finances and manage your money, you can use one of our convenient options: Online Banking, Mobile Banking, Audio Banking, surcharge-free ATMs, and Shared Branching.

At Scient Federal Credit Union, we are here to help you reach your goals and gain financial stability. Give us a call or visit our website to find out how. 

Should You File for Bankruptcy?

Your debt feels impossible. New bills and past-due notices are showing up daily. Creditors won’t stop calling. Just as you feel like throwing your hands in the air, you come across a solution that might be the best for you: filing bankruptcy.

Because of the COVID-19 pandemic, this is a reality many Americans are facing. Millions of Americans across the country have been unemployed since earlier this year. It’s incredibly easy to get behind on bills when the money isn’t coming in, but the bills are still showing up. It’s an overwhelming feeling. Seeing a new bill arrive each day, knowing you can’t cover it. Combine this with the question of, “How can I pay this bill with no job?” and it’s easy to see why the COVID-19 pandemic could be the cause of millions filing bankruptcy.

The longer this pandemic continues, the more likely it is that you’ll see some attorney in a TV commercial asking if you’re in thousands of dollars of debt, if you’re feeling overwhelmed by creditors and looking for a solution. While you’re thinking that sounds exactly like your life, this attorney is going to present the option of filing for bankruptcy because it’s the easiest way to get out of debt and the best way to get your life back.

It sounds great, right? Getting your debt forgiven and finally being out from under the stress and anxiety it carries.

To quote ESPN College GameDay analyst Lee Corso, “Not so fast.”

Filing bankruptcy might help you get rid of your debt, but it’s important to understand the serious, long-term effects it has on your credit. When you file bankruptcy, it remains on your credit report for 7-10 years as a “negative remark,” and it affects your ability to open credit card accounts or get approved for loans with favorable rates.

What exactly is bankruptcy?

Bankruptcy is a legal process designed to help individuals and businesses eliminate all or part of their debt or, in some cases, help them repay a portion of what they owe.

There are several types of bankruptcy, but the most common types are Chapter 7, Chapter 13 and Chapter 11.

Chapter 7 forgives most of your debt and allows you to keep all of your assets with a few exceptions depending on state and federal laws. During the process, you and your creditors are invited to a meeting where they are allowed to make a case as to why a federal bankruptcy court shouldn’t forgive your debt. Once your case is approved, your debt will be forgiven, and none of your creditors are allowed to hassle you over the forgiven debts.

Chapter 13 is different than Chapter 7 in that it requires you to come up with a plan to repay your creditors over a 3-5-year period. After that, your debt is forgiven.

Chapter 11 is generally for small business owners. It allows small business owners to retain their business while paying back debts according to a structured plan. With this option, business owners give up a certain amount of control to court officials, debtors, or counselors assigned to help you rebuild your credit. Despite losing some control of your business, owners are able to keep their business running while working on the financial future.

Things to consider if you’re thinking about filing bankruptcy

It’s important to note the serious impact bankruptcy has on your credit report. Bankruptcy effectively wipes out everything on your credit report – the good and bad remarks – and it stays on your credit report for 7-10 years.

Which means, any account you’ve paid off or left in good standing that could positively impact your credit score is wiped out. All the hard work you’ve put into building your credit is basically nonexistent once you file bankruptcy. True, all the negative remarks are gone, your debt is forgiven and you might even see your credit score go up, but you’ve pretty much labeled yourself high-risk when it comes to lending.

Bankruptcy seriously affects your ability to open lines of credit – credit cards, mortgages, auto loans, personal loans, etc. Because you are now labeled high-risk, most – if not all – banks will likely deny any application you submit for a line of credit – even though your credit score might have gone up. There are a number of factors that determine your credit score, but payment history, access to credit and derogatory remarks have the highest impact.

When you file bankruptcy, you wipe out all of your past payment history, eliminate your access to credit and end up with a derogatory remark regarding the bankruptcy left on your credit report. If you are approved for a line of credit, you’ll likely get a much higher interest rate which will make any monthly payments higher.

Take a car loan, for instance. The average APR for a car loan for a new car for someone with excellent credit is 4.96% while the average APR for someone with bad credit is 18.21%. If you’re able to get a car loan, you’ll likely get an APR closer to the high end because of filing bankruptcy. The same will be true for credit cards (forget getting a great credit card with rewards or a good rate), personal loans or mortgages.

Should you file for bankruptcy?

When it feels like your debt is caving in on you, bankruptcy might seem like the only way to reach financial peace. Don’t jump to that as a first option. Check out other, less painful options that don’t have nearly as many negative consequences in the long run.

Here are a few steps to consider taking first:

  • While it’s easier (and let’s be real, more pleasant) to ignore your creditors, take a moment to talk to them. Negotiate and see if there are options to make your debts more manageable. Can you lower the interest rate? Is it possible to settle for less than you owe? Can you set up a payment plan?
  • Talk to us about your financial picture. Let us help you find options to dig your way out of the hole you’re in while also keeping you from getting back in a difficult situation. We might have options that will allow you to consolidate your debt into one, more affordable payment.
  • Go through your house. Do you have things you don’t use or need that you can sell? If so, sell off those items and apply that money to your debt.

Also, it’s important to note that not all debt is eligible for bankruptcy. While bankruptcy can eliminate a lot of your debt, some types of debt cannot be forgiven.

  • Most student loan debt (although some members of Congress are working to change this).
  • Court-ordered alimony.
  • Court-ordered child support.
  • Reaffirmed debt.
  • A federal tax lien for taxes owed to the U.S. government.
  • Government fines or penalties.
  • Court fines and penalties.

Ask anyone who understands finances and most of them will tell you that bankruptcy should be an absolute last option. It might sound like a really good idea and filing for bankruptcy does end up being the best option for some people. But it should be the last option you consider because of the long-term damage it does. Look through your debt, see what you owe and carefully consider all of your options. Again, come in and talk to us. Let us see if we have better options that can help you. We’re your credit union, and we’re here to help you.

10 Tactics Scammers Use to Trick You

Scammers are known for preying on victims’ vulnerabilities, such as financial hardship, fear, and confusion. Given the particularly challenging circumstances surrounding COVID-19, people who believe they are savvy enough to avoid scams may fall victim, nonetheless. Proactive education is the best way to not only protect members but also help your credit union staff be prepared to assist members who have been targeted by scammers. In fact, a recent Javelin study found 80% of people in the U.S. who are informed about a scam will disengage from it. 

Here are 10 common practices scammers keep in their arsenals to attempt to fool your members and commit fraud. 
  1. Faking an emergency. Scammers pretend to represent an official organization (like the IRS) and call, text, or may email you to demand immediate money for bogus issues. They use threatening phrases such as, “Your 401k plan will be frozen,” “Your passport will be seized,” or “The maximum sentence for this crime is five years in prison and a $10,000 fine,” to catch potential victims off guard and create a sense of urgency.
  2. Expressing that resistance is ineffective. Once the scammer has created the emergency and instilled panic, they reinforce there is nothing you can do to remedy the situation. In the case of an IRS scam, they may say you must cooperate or face arrest and/or fines.
  3. Rewarding cooperation with encouraging comments. Scammers sometimes try to play the part of a trusted friend, offering help and a way out of the emergency that would provide you relief. They might even tell you that you seem like a good person and offer to help you with the situation at hand.
  4. Not allowing victims to hang up until they pay up. Phone scammers say it is a one-time opportunity for the member to take action to avoid further consequences, and if you hang up the phone, you will not be offered another chance to resolve the problem.
  5. Using official-sounding titles and names for ordinary things. Scammers try to sound impressive to gain your trust. They use official-sounding titles and names for merchants and everyday items. Examples include referring to a gift card as an “electronic federal tax payment system,” or instead of using the name of a store, they call it a “government-affiliated payment processor.”
  6. Stating they are not asking for personal information up front. Scammers know asking for personal information should raise alarm bells. Instead, they may say they are not looking to obtain this information, or they are not looking for an exchange of funds over the phone, which is design to make you let down your guard. This is why scammers often use gift cards to extract payment.*Scient will never call you and ask for personal information. If a caller does, please hang up and call us so we may help monitor your account.
  7. Signaling to members they are being recorded. In an attempt to sound legitimate, scammers say the call is being recorded and monitored by the IRS.
  8. Threatening to alert the media. Scammers go to great lengths to keep suspicious or wary potential victims on the phone, and even go so far as to threaten to contact the media on behalf of the IRS if you do not comply with what is being asked. This is used as a last resort to salvage a conversation that might not be going well.
  9. Exploiting member engagement. Once scammers have members hooked, they may transfer the call to another fake agent in an attempt to further legitimize the call. Often, these scamming “call centers” employ multiple scammers who work together to make the initial call and then close the scam. Scammers are highly organized: some are responsible for getting potential victims hooked, while others focus on closing the deal by extracting payment. They may say, “Please hold on the line, I am transferring the call to my senior treasury specialist,” or “Thanks for waiting, this is senior officer Matthews from the accounting department. My badge ID is…”
  10. Insisting members keep quiet about special offers. If a scammer offers a special tax break, for instance, they will often demand that you not discuss it with anyone, as it would prevent them from getting the settlement. 
If you feel that you may have been a victim of one of these scams, please contact us immediately so we may help in protecting your funds and your peace of mind.  Please remember we are always here for our member’s benefit and safety.  
*Information from