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I you received a GMACH loan, how much did you pay monthly?
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amother




Amber


Post  Thu, Feb 07 2019, 7:19 pm
amother wrote:
No, not when it's my hard-earned money that got lost in the gemach! Money we need to pay the bills.


I'm sorry, gold, I mixed you up with amother mint who said that it's ok to take out a gemach loan for education or to buy a home. But I don't agree; I'm not sure it's great to live above your means, ever.

But you have to realize that even legitimate businesses can't always collect - my friend just defaulted on a huge amount of credit card debt. Not much the credit card company could do about it. Like I said, unsecured debt always has a high default rate.
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amother




Goldenrod


Post  Thu, Feb 07 2019, 7:25 pm
amother wrote:
I'm sorry, gold, I mixed you up with amother mint who said that it's ok to take out a gemach loan for education or to buy a home. But I don't agree; I'm not sure it's great to live above your means, ever.

But you have to realize that even legitimate businesses can't always collect - my friend just defaulted on a huge amount of credit card debt. Not much the credit card company could do about it. Like I said, unsecured debt always has a high default rate.


Defaulting on a credit card company affects your credit rating, though. Defaulting on a gmach loan doesn't even do that.
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amother




Amber


Post  Thu, Feb 07 2019, 7:38 pm
amother wrote:
Defaulting on a credit card company affects your credit rating, though. Defaulting on a gmach loan doesn't even do that.


Only for a year or two. That's what my friend told me. And the amount was way more than you would get from any gemach...
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amother




Ecru


Post  Thu, Feb 07 2019, 7:45 pm
amother wrote:
Only for a year or two. That's what my friend told me. And the amount was way more than you would get from any gemach...


your friend is not giving you accurate information.
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dankbar




 
 
 


Post  Thu, Feb 07 2019, 7:46 pm
I think gemachs don't loan you more than $5000.

Most gemachs are set up as a non profit org because it's free loan. Don't know how that would work in court. Also if it's people from same shul, they wouldn't take them to court. The whole gemach was set up to help people it's not a business.
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amother




White


Post  Thu, Feb 07 2019, 7:47 pm
amother wrote:
Only for a year or two. That's what my friend told me. And the amount was way more than you would get from any gemach...


LOL People would be defaulting on cc loans right and left if it were that simple.
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amother




Amber


Post  Thu, Feb 07 2019, 7:48 pm
amother wrote:
your friend is not giving you accurate information.


Yes she is.

I don't mean that her credit is now stellar, but she does have credit cards and other than that she doesn't care because she already owns a home.
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dankbar




 
 
 


Post  Thu, Feb 07 2019, 7:49 pm
The problem why people can't pay back is because it costs way more than $5000 to marry off kids. They run to 10 gemachs to get $5000 from each
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amother




Amber


Post  Thu, Feb 07 2019, 7:49 pm
amother wrote:
LOL People would be defaulting on cc loans right and left if it were that simple.


They do. You'd be surprised how many.
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amother




White


Post  Thu, Feb 07 2019, 7:54 pm
amother wrote:
They do. You'd be surprised how many.


Of course people do. But their credit doesn't bounce right back after a year or two. That's the part that was totally inaccurate. It can seriously affect credit for over five years. Also, the cc company sells your debt to a collection agency who can choose to sue you for the money.
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amother




Ecru


Post  Thu, Feb 07 2019, 7:57 pm
amother wrote:
Yes she is.

I don't mean that her credit is now stellar, but she does have credit cards and other than that she doesn't care because she already owns a home.


Okay. There are other reasons why a person would want to have a decent credit score - but defaulting on credit cards doesn't just go away. Did she settle on the debt?
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watergirl




 
 
 


Post  Thu, Feb 07 2019, 7:58 pm
The gmach where I live requires you to have 2 cosigners who live locally to the gmach and who own property. You sign a legal document (yes, legal and holds up in court) and if you default, the cosigners have to pay. This is if you borrow more than $300 iirc.
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amother




Amber


Post  Thu, Feb 07 2019, 7:59 pm
amother wrote:
Okay. There are other reasons why a person would want to have a decent credit score - but defaulting on credit cards doesn't just go away. Did she settle on the debt?


Yes.

Another thing I just realized - credit card companies are really, really careful who they lend to. Gemachs lend to everybody, and presumably if you need a gemach, your credit is not great. So it's really a much higher risk altogether.
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out-of-towner




 
 
 


Post  Thu, Feb 07 2019, 8:00 pm
amother wrote:
I always wondered at the business end of this. How do the gemachs afford their office space and staff?


There's no overhead on my husband's. Most transactions take place on my dining room table or at Shul, and my husband is 100% volunteer. Checks are given to my husband or placed in our mailbox, with one of us occasionally having to go pick up a check from somewhere local. Records are on a cloud system in my husband's email and occupy space in a small filing cabinet of ours. At least once a year there is a Shul appeal to give money to the Gemach.
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amother




Ecru


Post  Thu, Feb 07 2019, 8:02 pm
amother wrote:
Yes.

Another thing I just realized - credit card companies are really, really careful who they lend to. Gemachs lend to everybody, and presumably if you need a gemach, your credit is not great. So it's really a much higher risk altogether.


Gemachs don't lend to everybody - and people take loans from a gemach for several reasons including - its a "free loan".

If your friend settled her defaulted debt - its very different than just taking money and walking away.
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amother




Gold


Post  Thu, Feb 07 2019, 8:18 pm
amother wrote:
Gemachs don't lend to everybody - and people take loans from a gemach for several reasons including - its a "free loan".

If your friend settled her defaulted debt - its very different than just taking money and walking away.

And even that, if this was her plan all along, to default on her credit cards and then settle her debt to "get away" with paying less, I'm sorry, but it's the same geneiva. This is not a way of life. Settling debt with CC companies is what you do when you're stuck, but not as a way to generate income. Mad
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amother




Babyblue


Post  Thu, Feb 07 2019, 8:48 pm
out-of-towner wrote:
My husband runs a Hachnosas Kallah Gemach (he does not "own" it, he inherited the responsibility to run it and he answers to the Roshi Kehilla of the Kehilla it belongs to). He gives a maximum of $5000 for weddings, and people decide how much they can pay back per month but he tells me it's usually around $100-$200 a month. As this is a Kehilla based Gemach, it's mostly for people who are local, and the Areivim need to be local, known people as well with few exceptions. It is a legally binding document as far as I understand.


Thanks. Now I get a ballpark figure of what it is and I can sit down with my DH and of course judge if we can take it or not. Also by your answer I learnt that in case they ask for lets say, 500 monthly I can propose a much lower payment. I want to be treated like the average kehila borrowers.
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dankbar




 
 
 


Post  Thu, Feb 07 2019, 10:10 pm
If you settle a loan, you pay tax on the diffrence. The IRS considers it an income, the amount you were let off
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amother




Seashell


Post  Thu, Feb 07 2019, 10:24 pm
dankbar wrote:
If you settle a loan, you pay tax on the diffrence. The IRS considers it an income, the amount you were let off

THIS.
Not everyone is aware of this before settling.

It should be required to sign an acknowledgedment of this as part of the paperwork...
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amother




Gold


Post  Thu, Feb 07 2019, 10:42 pm
dankbar wrote:
If you settle a loan, you pay tax on the diffrence. The IRS considers it an income, the amount you were let off

I'm sure it still comes out quite the savings.
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