Forward to the Kingdom!

“You don’t need to hear another list of statistics to know that our economy is in crisis, because you live it every day,” President Barack Obama told a joint session of Congress and the American people Feb. 24.

In this time of financial stress, with many people facing unemployment and crippling debt burdens, we need some resources and tips that can help us make wise choices and work through the problems.

 Jim Carter works for a Consumer Credit Counseling Service accredited agency in Houston, Texas, and he’s also my brother-in-law, so I asked him to share some helpful tips for those facing debt problems in the United States:

Hmmm…helpful tips. There’s a lot to say, really, but here are a few that might help, in ascending order of nastiness:

 1.) Do a detailed budget. Many of the people we counsel just need some help structuring their expenses and income. Once that’s done they can cut expenses or look for alternative income to make things balance out. The tools for this are all over the Internet and a lot of people can do it on their own. If not, an accredited CCCS agency (of which we are one) will do it for free.

 2.) Stay in touch with your creditors. They know what the economy is like and their bottom line is that they just want their money. It’s not always comfortable, but it is always best to contact them as early as possible if you run into a problem. DON’T wait until they send you to a collection agency; they are very difficult to work anything out with. The original creditor will often be willing to work out a payment plan that you can handle.

 3.) Be aware that there are numerous special programs for people having problems paying credit card bills or home loans. Some can be accessed by telling the lender you’re interested in an “Internal Program,” “Forbearance Program” or “Hardship Program.” Others are available only through debt management agencies. For people in danger of losing their homes, there are even (in certain circumstances) grants to help them get back on track with their payments.

 4.) If you need help, make sure the agency you turn to is a nonprofit Consumer Credit Counseling Service accredited with the National Foundation for Credit Counseling. A list of the ones nearby can be found at www.nfcc.org.

 5.) If at all possible, always pay something on your bills-even if you can’t pay the full amount. This, along with staying in touch with your creditors, does two main things: a.) Gives the creditors confidence that you are making an effort, and b.) Provides a paper trail of your good faith effort to pay your debts. This can be very important legally, particularly if your debts are with collection agencies.

 6.) Never ignore a summons. You would be surprised how many people do, and it gets them into very bad trouble. Judges typically grant the collection agency’s request for a judgment against you if you are not there. If you bring evidence of your good faith effort to pay your debt, the outcome can be much better.

 Thanks, Jim, for sharing these tips. Our free booklet Managing Your Finances gives more helpful ideas, worksheets and tips for “avoiding financial black holes.”

If you have other tips or information to help those in other countries, let us know.

 Comments?