April wrote to me through the GetOutOfDebt.org site and asked me the question below. If you have a question, please write to me for free and I’ll help you as well. “Dear Steve, I am married with three children 11, 4 and 3, I also have an 11 year old step son. We live in Jersey. My husband is a disabled vet (from the first gulf war). He gets a pension and I work at home so I can take care of the kids our income is less then $50,000 per year, our money is very limited. Since everything cost double it’s been harder and harder to pay bills. I am on time with everything. I am very concerned with my credit score. I’ve been flirting with debt consolidation but am a bit leery to what it will do to my credit. Plus their fees almost equal what I’d be saving in interest. I’ve tried calling my credit cards to have my interest lowered and they won’t budge (I really don’t think they have a soul charging over 23%, it should be against the law). I’ve tried borrowing money and no one is lending even with a score close to 700. What’s the point of having good credit? I want to pay my bills but they are chocking me and my family. Do I pay my bills or feed my kids? Even PB and J is getting expensive with a loaf of bread over $3. Is there a program that can help me that will keep my credit intact? I will appreciate any advice! Thanks in advance, April” Dear April, I’m so sorry that you are living through this right now. I know it is stressful but I think I have some advice that will help. First, let me get right to answering your question if there is a debt consolidation program that will help you keep your credit intact. No, there is not. The only way to get out of debt without hurting your credit is to pay the debt in full or as agreed in monthly payments. Credit agreements are “take no prisoner” contracts. They don’t make room or allowances for people to pay what they can afford. Instead they ask you to make firm promises to repay the loan in full or with regular payments. Anything outside of those payments is an exception and reported to the credit bureaus. If you send less than you owe, it will be reported. If you go into a credit counseling program, footprints will appear on your credit report . If you sign up with a debt settlement company, you’ll fall behind on your debts and that negative information will be reported. If you go bankrupt, that will be reported for sure. But the issue here is twofold. First, you can’t live a life you can’t afford to preserve a credit score . While your score is good, the consequences to living for that score are not so good. Second, while you may be current on your bills, you won’t be for long. You are living so close to the edge that all it will take is one unforeseen event and your budget will be shot. Besides a safe monthly budget needs to include some money set aside in a savings account to build an emergency fund. If you can’t do that, you really are not making it from month to month now. Disabled Vet I am hopeful that you are receiving all the VA benefits you can for your husband. If not, here is a quick list of special loan programs for VA eligible members. VA - Home Loan - Construction VA - Home Loans - Cash Out Refinance (Regular Refinance) VA - Home Loans - Interest Rate Reduction Refinancing Loan VA - Specially Adapted Housing Program VA - Life Insurance - Veterans Life Insurance Policy Loans I know you’ve tried to call your credit card companies to lower your interest and they won’t budge, I’m not surprised. The issue here is that you are current on your bills and the customer service reps that talk to you when you are current don’t have access to those special programs to adjust your interest or payment. The irony is that to reach those customer service reps you’ll have to go past due on your bills and that will hurt your credit score . Creditors don’t reward people for being proactive. Another question you had was do you feed the kids or pay the bills. The 100% honest and moral response is that you fee your kids first. You need to put the priorities in the right order. They should be: Food Shelter Utilities Clothing Car or Truck Payments Other Needed Utilities (Reasonable mobile phone, cable TV, saving for an emergency, an occasional fun thing for the kids) Creditors Do you have an obligation to repay what you borrowed? Yes you do, but if prices have gone up and you can no longer meet the bills under your current day-to-day reality, then what has actually happened is that the loan agreements remained the same but your life changed around them. That happens, that’s normal. Are creditors soulless who charge 23% interest? You made that statement as well. Just yesterday I wrote about an account at 36.5% interest. In Europe the interest rates on a credit card can be even higher. I’m afraid you’ll have to shoulder the 23% interest argument. The interest rate calculations are covered in the terms and conditions that come with each card. If you did not want to be subject to them increasing the rate then your options are to not take out the credit card to begin with or pay the balance off in full. That is the only way for you to gain your freedom from the terms you agreed to when you took the card out. Let’s change a few things here. Read my article about getting cheap bread . You should not be paying $3 for a loaf. Read my article about where to buy cheap food . Doing that will help lower expenses. Come to terms with the fact that your credit score is probably not going to be sustainable and loosen your grip on that. You can try a debt management or credit counseling program if you want and see if they can come up with a monthly payment you can afford over a five to seven year period. But before you do that I want you to read what I said about credit counseling programs in this article . If you take a good honest look at what you can afford to repay each month and it does not meet the creditor minimum payments then you might consider bankruptcy . If so, speak to a bankruptcy attorney for a free bankruptcy review and get the facts. April, let me talk to the mother in you for a moment. Your children are young an impressionable. Please be sure to sit them down and have an honest conversation about the struggle that are going on. They need to understand that the reason you might say no to stuff they might want is not them, but the budget . They need to understand that it is the financial situation that makes things tough at times but no matter what, you love them with all your heart and soul. Big hug. Here is an extra hug for the kids. Steve Other Related Articles to Read Karen Writes In “Ex-Husband Isn’t Paying The Bills and He’s Trashed My Credit. What Can I Do to Repair It?” Daniel Writes In - “How Can I Get Out of Credit Card Debt?” Crys Writes In And Asks “We’ve Been to Credit Counseling But Should We File For Bankruptcy?” Where to Buy Really Cheap Bread This Time I Asked “Do You Think You Are a Failure When You Break Your Budget?”

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If you're new here, you may want to subscribe to my RSS feed right now, before you forget, to get the latest posts. Thanks for visiting! Ever since hearing about this story I’ve had all sorts of opinions about it. Funny, shock wasn’t one of them. A California Sacramento State ...[Read More]

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Keith wrote to me through the GetOutOfDebt.org site and asked me the following question. You can write me too! “I have $30,000 in credit card debt plus $160,000 in home loans and business loans. Should I consider debt consolidation from a company that charges me a fee each month?” Keith, Excellent question and my answer may surprise you, Yes! Nonprofit credit counseling programs brag that many of them are free or at a low cost, but that comes at a price, namely who they really represent. As long as the credit counseling program is getting paid by the creditor, there is no monthly charge to you who do they truly represent? Let’s look at this a different way, if you were suing your credit card company and they offered you one of their free lawyers that they were paying for, do you think you’d get impartial representation, or would you want to use your own lawyer that you knew was working for you? A debt management or debt consolidation company that charges a fee should not be avoided if you are comfortable working with them, they are providing you with excellent customer services, they are kind and treat you with respect. At a time like this you don’t need to be a number in line at the free clinic, you need to get top-notch kind and compassionate assistance to help you through this. Fee charging debt management or debt consolidation programs should not be solely judged on if they charge a fee, but the quality of the service and representation they offer you. Big hug. Steve Other Related Articles to Read How You Can Get Out of Debt Fast Without Filing Bankruptcy Daniel Writes In - “How Can I Get Out of Credit Card Debt?” Donald Writes In And Asks For Help “I’m Getting Behind on Bills!” Ben Wants To Know, “Will I Ever Get My Life Back After Bankruptcy?” Ryan Writes In Looking For His Lifestyle Back

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I’ve long resisted the iPhone movement. I certainly did not want to be on the bleeding edge of technology so much that I was going to camp all night waiting for the release. In fact I had no intentions of buying one at all, even as fanatic as iJustine is about them. (iJustine follows me on ...[Read More]

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You know, I remember the good old days when PayPal used to actually provide great customer service. Sure there were some rough edges now and again but compared to the service they deliver now, they were brilliant. It absolutely astounds me how a company like PayPal with Google Checkout wanting to ...[Read More]

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So yesterday I get this nice little email from T-Mobile in the U.S. that said: We recently notified you that we were unable to charge your credit card on file for your HotSpot service. We have since been successful in charging your card and have moved your account back to active status. You can ...[Read More]

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It appears that the BlueHost.com helpdesk customer service failure issue has come to an end with my account being closed and the year hosting fee I paid, refunded. In case you missed the first parts of my horrible customer service experience with BlueHost.com, here are the links. I. BlueHost Web ...[Read More]

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My last post was me bitching about being basically told to fuck off by BlueHost.com whom I initially recommended for their web hosting packages and ease of setting up my account but latter pissed on when they told me to get lost. I thought it would be helpful to give some examples of how the ...[Read More]

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Luckily I had the presence of mind to capture the chat with the customer service rep, Brandon, from BlueHost last night. Previously I wrote about this massive file upload I’m doing for a new site, see End of Week 1 And Still Uploading 215,000 Files. Now in all fairness I did promise to keep ...[Read More]

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I get sick and tired of having a problem with a company and then getting the royal run around trying to reach a human. And the worst in my book, Comcast, even when you can reach a human they often can’t help anyway. Why me Lord? So here are some links to reach a human at customer service ...[Read More]

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Great little post about a positive customer service experience received by a very nice couple when they visited a local restaurant. What makes this story so heart warming is that the business took the opportunity to contact the the customers with an intelligent and personal email that was not ...[Read More]

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In a move that can only be thought of as hostile and devious, the once domain name market leader, Netowrk Solutions, has now put in place an evil policy that takes any domain name you search for with them, and not buy, off the market for up to five days. As a domain name registrar they can ...[Read More]

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Apparently online Audio visual retailer NWVDirect has set a new low in how to treat customers. What makes this story even more unusual is that the person being victimized was able to record the conversation. [Consumerist] ----- If you enjoyed this post be sure to grab the RSS feed or get posts ...[Read More]

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Newspapers are facing some tough competition in tis electronic age and constantly searching for new ways to grow their business. While researching a story about a Bank of America teller that got married in the bank branch while customers made deposits, I came across this story of cars colliding ...[Read More]

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Have you gotten the runaround from a company you are trying to get something resolved with? Have you exhausted all the logical avenues to address your problem? Do you want to escalate your issue straight to the top? If you said yes, then first let me say how sincerely sorry I am that you’ve ...[Read More]

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