Sonia wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, Why do all the web sites you go to say you can get a free credit report but all of them ask for a credit card. I don’t have a credit card so where can I go to get a free credit report? Sonia” Dear Sonia, You can get a free copy of your credit report online at AnnualCreditReport.com without a credit card . Just to make sure you still could get a free copy this way I went to the site and got mine. And thanks to you I found a couple of items I needed to dispute. Using the online links I was able to do that online. You can also get your free credit report by telephone. Call 1-877-322-8228 or by mail . You’ll need to print out this request form and send it to: Annual Credit Report Request Service P.O. Box 105281 Atlanta, GA 30348-5281 Big hug. Steve Source: Sonia Wants to Know How to Get a Free Credit Report Without a Credit Card Other Related Articles to Read Lorena is Worried That Having Multiple Banks Accounts Will Hurt Her Credit John is Worried His Debt Will Scare Away His Fiancee Bre Wonders Why Her Credit Report Still Shows Negative Items That She Thought Should Have Been Removed By Going Bankrupt Bob Was Injured And Is Now Behind On His Credit Cards Soon, Where You Shop Will Control Your Credit

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Rebecca wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, Student loans private 30,000 at 10% with five separate loan groups/amounts refuse to consolidate and lose control of options. Federal two groups one at 27,000 the other 29,000 both at 5.75%. 39 years old and have been working as a nurse for 1 year making at this time $62,000. I want to attack my sallie mae loans! I’m highly motivated to make great sacrifices in a monthly budget so ask to ask my above mentioned loan. How do I formulate a strategic plan to pay off this debt wisely? How do I best access up to date information regarding the student loan industry itself along with my consumer rights? Rebecca” Dear Rebecca, Unfortunately your private student loans have fewer options. While those student loans are protected from discharge in bankruptcy , there is no requirement that the lenders doing anything to assist you at all. The good news is that there are options regarding your Sallie Mae loans and the Sallie Mae website is an excellent source of repayment options available to you. Standard Repayment The standard repayment plan offers the lowest overall cost. When you start repaying, your loans are automatically placed into this plan. Your monthly payment amount remains the same over the term of the loan. Use Sallie Mae’s monthly loan payment calculator to see how this plan might work for you. Extended Repayment Lower your monthly payment without the inconvenience of applying for a new loan. Plus you can prepay your loan(s) at any time without penalty. If you have more than $30,000 in federal student loans, this option may be the best choice for you. Graduated Repayment With graduated repayment , your monthly payments are lower at the beginning of repayment and increase over the term of the loan. You can choose to make payments as low as interest-only for up to four years. Payments for the remaining term will then be higher. Income-Sensitive Repayment Your payments are based on a percentage of your monthly income — from 4% to 25% — as long as you pay at least the interest that accrues every month. If You Are Currently Repaying Your Loans If you are currently repaying your loans you can login and find out what your Sallie Mae options will be by going to ManageYourLoans.com . Big hug. Steve Source: Rebecca the Nurse Wants to Get Her Student Loans Off Life Support Other Related Articles to Read Anne is Struggling With Her Student Loans and Sallie Mae Lauren is in a Fabulous Foreign Country and Can’t Afford Her Student Loans C Wants to Defer Student Loans Without Hurting the Credit Report Alex Went to Law School, Business School and is Now Buried in Student Loans Alex is Buried in Student Loan Payments

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Alex wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, I have Federal Student loans dating back to ‘94/95. My situation was unusual. I first attended MBA school and left after a semester because I also got accepted to Law School at a different university. I went to Law School for a year and a half only to realize it wasn’t what I wanted to do so I left. I returned to MBA school and all the while I had been using student loans for both business school and my short term in Law school. When I graduated from MBA school, I deferred my student loand until I could afford to make my monthly payments. I have deferred and used forbearance until today. I have no deferment elegibility left so I have to forbear. Unfortunately, the $680 monthly payment is too much for me to pay. I now owe approximately $108,000 in student loans. I need help on how to takle this. I cannot afford that payment because I have a mortgage and other monthly bills. What can I do? I would greatly appreciate your insight and guidance. Sinking deeper into student loan debts, Alex” Dear Alex, I worry more and more about student loans as the years go by. It used to be that college was the preferred route to take to provide you with the skills necessary for a richer future, in many ways. But now, college loans are getting to be so expensive and such a noose around the neck of students, especially those like you that seek advanced degrees, that I’m no longer as supportive. The graphic above is from a great New York Times article, “ College May Become Unaffordable for Most in U.S. ” that everyone should read. It challenges our old assumptions that college is within reach of young students now. As I write this, your student loans are already 13 years old and you really have not even begun to start to repay them. This is a horrible problem. But your story is not unheard of. I’ve met many people that began law school, only to realize that it was not something that they wanted to do and so they quit or switched focus. Unfortunately that does not relieve you of your obligation to repay loans used for studies. Since your student loans are not eligible for discharge in bankruptcy , you’ve really got one option, make suitable repayment arrangements. The ICRP (Income Contingent Repayment Plan) plan is probably going to be your best opportunity. See “ Tiffany is Behind in Student Loans, Late On Other Payments, And Looking For Hope ” for a more in-depth look at student loan repayment options. Steve Source: Alex is Buried in Student Loan Payments Other Related Articles to Read Jake Wants His Transcript But He Defaulted On His Student Loan Debt C Wants to Defer Student Loans Without Hurting the Credit Report Do You Think You Are A Failure When You Break Your Budget? Pam Asks “Does a Deferred Student Loan Lower Your Credit Score” Pam Is Out Of Cash And Out Of Time

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Sally wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, Hi, I am hoping for some help. I have read some stuff already on your website regarding this, but my situation is a bit different. My ex-husband and I are divorced for a year, separated for 2 yrs prior to that. In our separation agreement it states that he is responsible for 2 investment properties we have in another state. He has paid on them up until last month Nov. 2008. He is claiming that he cannot afford the homes even though he makes 150K/yr and has a 450K home. I just signed over the martial home to him Sept 2008 and he just paid me the money out of my house. I cannot buy a new home right now because I lost my job, typically I make 80K a year. So now he wants both homes to go into foreclosure. We could not refinance the homes because the loan value is worth more than market value of the homes. So in a court order it is stated that he is taking over the homes until he can refinance them and that he will pay any of my legal fees or losses incurred if he forecloses. Since he has showed that he has paid on the properties himself since the separation will this matter to a credit company (FICO)? What do I do with the money I was finally given for my marital home. My credit score went from an 815 to 640 in the divorce already. Is it best to declare bankrupcy now or foreclosure. I would like to buy a home of my own by 2010. Please advise. Thank you! Sally” Dear Sally, In all my years of helping people, financial problems in divorce are always traumatic. There is so much weight, emotion, and anger placed around these issues that there is never a winner. Sadly, whatever it says in the separation agreement is a deal between you and your ex-husband and not you and your creditors. As long as you jointly signed for those mortgages, the lenders will still hold you jointly liable for those debts. If the properties go to foreclosure , the fact that he made a promise to you to cover your liability and costs will not make a bit of difference to your FICO credit score or to the lenders. Again, that is an agreement between you and your spouse, not you and the lender. What the lender will report to the credit bureaus and your credit report , which will impact your credit score , is that you failed to pay on a timely basis and lost the property to foreclosure . Your options are limited right now. I think you should assume that the other homes will be lost to foreclosure , your ex-husband will not have money to cover your liabilities for those homes and that the lenders will come after you. You should immediately go and speak with a bankruptcy lawyer as soon as possible to do some planning to prepare yourself if all of this dumps on you. The most important question you need to ask is if the money you received is protected at all from the mortgage lenders or can they go after that to repay some of the money owed on the soon to be defaulted homes. Seek legal advice, now! Big hug. Steve Source: Sally is Divorced and Ex-Husband Has Stopped Paying Mortgages 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?” Bankruptcy Judges Should Have the Power to Modify Mortgages Jason Has Not Paid His Mortgage in 10 Months And Wants to Keep His House Ed is Disabled and Falling in Debt Fast. What Can He Do? Listen to the Story of Dan and Mary

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Pam wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, I am a single mom, my daughter is 17 and trying to get a job, but even for her it’s hard. I have a couple of credits cards that I just can’t pay. My priorities are rent first, then car payment, utilities, then food, gas. I am still married but I can’t go to my husband for help, all I can say about that is temper. One credit card has already sent my account to a collection attorneys office. I am so afraid they will garnish my wages, which if they do, I will really be in the hole. After I pay my regular bills, I have about 350-400.00 to last the whole month, that has to buy gas, groceries and misc., I have nothing I put in savings. I have $1.26 in my savings account and have sold just about everything I can. We moved and had a garage sale, hoping I would make enough to get us moved. We now have no furniture, both of us have a mattress on the floor, no bed. Believe me, 54 yrs old, it’s hard to get up off the floor. My credit is already ruined, so I wish they would just write of the debt and be over with it. By going further with an attorney and whatever his fees would be, I still wouldn’t be able to pay anything, so I don’t understand why they would pursue something that I can’t pay. Pam” Dear Pam, My deepest sympathies about the bed on the floor routine. I agree it was a lot easier when we were younger. Just this year I spent two months sleeping on the floor as I waited for my possessions to arrive from overseas. That first night in my own real bed was heavenly. It certainly sounds like you are just making ends barely meet at this point. I was certainly encouraged to see that you’ve got your payment priorities in the right order. Good job. Without any income to be able to afford a bankruptcy lawyer , which is what you probably really need, your options are to not pay those credit card accounts and deal with being sued and a latter garnishment if it happens. The garnishment can be neutralized with bankruptcy so that can be addressed. You can find local legal aid that might be available in your area by doing a net search. If you are not eligible for free legal aid assistance, contact a local bankruptcy attorney and see what payment arrangements could be made that you can manage. Bankruptcy at this point is not going to improve your financial situation, just close the door on debts you just can’t pay. In order to improve your financial situation you’ll have to find a better job or a second income. See if your daughter can find anything local through the snagajob.com website. It seems to be able to easily connect people with entry level jobs. I’m sure she would love to help any way she can. Unless you can increase your household income I’m afraid the next step is homelessness and I don’t want to see that happen to you. Big hug. Steve Source: Pam and Her Daughter Are Sleeping On The Floor Other Related Articles to Read Trisha is a Single Mom, Separated, and Facing Bankruptcy. What Should She Do? Samantha Says “My Husband And I Are Young And Don’t Want to File Bankruptcy. What Do We Do?” Pam Is Out Of Cash And Out Of Time Ryan Writes In Looking For His Lifestyle Back

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On November 24, 2008 a class action lawsuit was filed against Bank of America, for deliberately engaging in a course of action that led to credit card customers to be intentionally penalized even though payments were made by the due date. The suit cites, as an example, the case of Bruce Trombley who received a credit card statement with a closing date of October 2, 2007 that indicated that a minimum payment of $248.00 was due by Saturday, October 27, 2007. Mr. Trombley went into a Bank of America branch on Saturday, October 27, 2007 at 11:44 am and made a payment of $250. Bank of America subsequently notified Mr. Trombley on his November 2007 credit card statement that he was to be charged a late fee of $39.00 and his promotional interest rate would no longer apply even though Mr. Trombley made his payment by the due date. The second example in the suit involves the case of Ryan Sukaskas who was charged a $15 pay-by-phone fee for making his payment on the due date. He had attempted to make the payment via the Bank of America website but the site indicated that since it was the date due that a payment could not be made via the site. It is alleged that consumers have been made to pay fees, charges and higher interest rates due to breaches of MBNA, FIA Card Services, and Bank of America credit card agreement and violation of the Truth in Lending Act. The plaintiffs in this case state that Bank of America has profited from the charging of fees, other fees, charges and/or additional finance charges for payments on accounts received on the due date. The primary issue here is if Bank of America failed to apply payments made on the day made without the imposition of additional fees and charges. Additionally it is stated that Bank of America is intentionally taken actions that are designed to increase the amount of finance charges, late fees, and other charges that customers must pay. The other issue is that Bank of America appears to be out of compliance with the Truth in Lending act and Regulation Z of the Consumer Protection Act of 1968 that says that “A creditor shall credit a payment to the consumer’s account as of the date of receipt, except when a delay in crediting does not result in a finance or other charge…” If you feel that you have been unfairly charged a late fee, a fee to make your payment on the due date, or have received an increase in the interest rate, even though you made your payment on the due date, you might want to contact the attorney in this case: Peter N. Wasylyk 1307 Chalkstone Avenue Providence, Rhode Island 02908 Telephone: (401) 831-7730 Facsimile: (401) 861-6064 E- Mail : pnwlaw@aol.com Photo: James Callan Source: Bank of America Hit With Class Action Suit Over Credit Card Fees And Charges Other Related Articles to Read Jairo Wants to Stop Paying His Bank of America Clean Sweep Debt Consolidation Loan Credit Card Companies Are Coming For You. Protect the Wife and Children. Pam Asks “Does a Deferred Student Loan Lower Your Credit Score” Mortgage Lender List of Loss Mitigation Contacts That Can Help You Avoid Foreclosure Karen Writes In. “My Interest Rates Are Going Up. My Minimum Payments Are Going Up. Help!”

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Tiffany wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, I’m a 23 year old college student and I owe around $40,000 in student loans, as well as having $8,000 in credit card debt. I was laid off for two years and just going to school (the debt obviously accumulated) and I just started working again for less money. I have been late on all my payments and I’m worried about what I’ve gotten into. I am supposed to get married in 2 years and I don’t know how to get out of this mess. I have always paid my bills on time until now. I had to take this semester off of school because I couldn’t pay for it, and now the student loan company wants more then my salary each month in payments! I’m drowning and ignoring 20-30 calls a day from collectors. Is there any hope for my situation? Tiffany” Dear Tiffany, If your student loans are government backed, there are repayment opportunities that you can take advantage off that are reasonable, affordable and contingent on your income. What you need to ask for is an income contingent repayment plan (ICRP) You can find out a lot more information about U.S. Department of Education collection options by reading the Department of Education publication “Options for Financially-Challenged Borrowers in Default” . The Direct Loan Program offers loan repayment plans designed to meet the needs of almost every borrower. Direct Loans are funded by the U.S. Department of Education through your school and are managed by the Direct Loan Servicing Center , under the supervision of the Department. The Direct Loan Program allows you to choose your repayment plan and to switch your plan if your needs change. To find out more about repayment options before receiving a Direct Loan, borrowers may contact their school’s financial aid office or the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243). If you currently have a Direct Loan and would like the exact payment amount on your loan, you can find it out online at the website for the Direct Loan Servicing Center or you can call the center at 1-888-447-4460. Direct PLUS Loan borrowers may only choose from the standard, extended, or graduated options. Standard Repayment With the standard plan, you’ll pay a fixed amount each month until your loans are paid in full. Your monthly payments will be at least $50, and you’ll have up to 10 years to repay your loans. The standard plan is good for you if you can handle higher monthly payments because you’ll repay your loans more quickly. Your monthly payment under the standard plan may be higher than it would be under the other plans because your loans will be repaid in the shortest time. For the same reason - the 10-year limit on repayment - you may pay the least interest. Extended Repayment To be eligible for the extended plan, you must have more than $30,000 in Direct Loan debt, but you have 25 years to repay it. Under the extended plan you have two options: for fixed or graduated payments. Fixed payments are the same amount each month you are in repayment, as with the standard plan, while graduated payments start low and increase every two years, as with the graduated plan below. This is a good plan if you will need to make smaller monthly payments. Because the repayment period will be 25 years, your monthly payments will be less than with the standard plan. However, you may pay more in interest because you’re taking longer to repay the loans. Remember that the longer your loans are in repayment, the more interest you will pay. Graduated Repayment With this plan your payments start out low and increase every two years. The length of your repayment period will be up to ten years. If you expect your income to increase steadily over time, this plan may be right for you. Your monthly payment will never be less than the amount of interest that accrues between payments. Although your monthly payment will gradually increase, no single payment under this plan will be more than three times greater than any other payment. Income Contingent Repayment This plan gives you the flexibility to meet your Direct Loan obligations without causing undue financial hardship. Each year, your monthly payments will be calculated on the basis of your adjusted gross income (AGI, plus your spouse’s income if you’re married), family size, and the total amount of your Direct Loans. Under the ICR plan you will pay each month the lesser of: the amount you would pay if you repaid your loan in 12 years multiplied by an income percentage factor that varies with your annual income, or 20% of your monthly discretionary income. If your payments are not large enough to cover the interest that has accumulated on your loans, the unpaid amount will be capitalized once each year. However, capitalization will not exceed 10 percent of the original amount you owed when you entered repayment. Interest will continue to accumulate but will no longer be capitalized. The maximum repayment period is 25 years. If you haven’t fully repaid your loans after 25 years (time spent in deferment or forbearance does not count) under this plan, the unpaid portion will be discharged. You may, however, have to pay taxes on the amount that is discharged. If Your Loans Are Not Government Backed Options for repayment of private lender student loans are limited and few. Unless the lender has some provision for modifying the loan to fit within your income, you may be stuck. Your situation clearly demonstrates the underlying issue that for many, student loans taken on with the assumption that they will lead to a better future, don’t always work out that way. You can see an extended discussion of this in the article Lauren is in a Fabulous Foreign Country and Can’t Afford Her Student Loans . I just hope that your loans are government backed so that you have some actual options to address this situation. If the collection calls are getting to be too much, consider the solution I lay out in How to Hide From Debt Collection, the Debt Collector, and Creditors . Big hug. Steve Source: Tiffany is Behind in Student Loans, Late On Other Payments, And Looking For Hope Other Related Articles to Read “I Have Three Degrees But I’m Broke And Miserable” Lauren is in a Fabulous Foreign Country and Can’t Afford Her Student Loans C Wants to Defer Student Loans Without Hurting the Credit Report Graduate From College With Good Grades And Get A New House Louis Says “I Feel Like Killing Myself Because of My Debts”

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Holy wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, I am a divorced 56 year old woman who suffered an injury as a teacher in a public school in May, 2000. I now suffer with a severe and permanent chronic pain condition (Reflex Sympathetic Dystrophy). Social Security refused me any disability (chronic, debilitating pain is not considered disabling) and due to the struggles I’ve experienced throughout these 8 long years, I am deeply in dept. This probably would not have happened had I not been ill and needed pain med and treatments, which I am convinced alter my ability to make good decisions. I relied upon help from my brothers who abused their powers and left me owing close to $50,000 in credit card and medical debt. I am trying to work but just can’t function well enough to be able to pay these debts off, and still accumulate medical expenses at a frightening rate. I am trying to sell medicare insurance in an attempt to work again at my own pace since I never know if I can work from day to day and can’t handle stress associated with typical 8-5 jobs. It is hard and I feel like I’m adversely affected by my meds and am always trying alternate forms of therapy to alleviate my symptoms, but instead am feeling worse as time goes by. Is bankruptcy my only option? I was never a credit risk until 2005 when my brother’s manipulations put me in debt, and my medical expenses escalated at a frightening rate. I have no property anymore, and live with my son. I went from having a 750 credit score, nearly $20,000 saved after my divorce, no debt and the ability to earn between $45,000-75,000 a year to struggling on $14,770 a year in disbility retirement. My lousy retiree insurance plan requires a $5,000 a year deductible! My medical costs (meds and payments on accounts) average $500 per month, and I’ll never pay some of those debts off, much less be able to pay future expenses off. My car is 11 years old and pretty close to expiration, my brothers stole anything of any value I could sell, and I just don’t know what to do? Unfortunately, my children are young and struggling with their own businesses and lives, and can’t help much, nor do I want their help. Can you suggest a plan for relief of some kind? Holy” Dear Holy, I am positive that with everything that has gone on and is going on it must feel like there is no direction to head in to get any sort of relief from the drumming pain and depressing debt. Let’s tackle this is stages. Disability Just because you have been denied disability does not mean you are not entitled to it. It just means you’ll have to fight harder for it, that’s all. Many denied disability claims are approved on appeal as they move up the chain of command. See a previous question, “ Roise Has Panic Attacks, Can’t Work, And Is Now Out of Money ” for more information on steps you can take to push your case forward. Instead of giving up, get professional help. Growing Medical Debt You stated that you are still accumulating medical debts at an alarming rate. That concerns me. Even if you went bankrupt right now I’m not confident that it would place you in a better position since you may just accumulate debts that you will be unable to pay following bankruptcy . So in that situation, while bankruptcy may eliminate your past debts, it won’t do anything to improve the future. Stop Paying Your Bills. Really! The best course of action for you to take right now would be to stop paying the bills of unsecured creditors that would be discharged in bankruptcy . I know that sounds crazy, but it’s not. In your current situation you have no assets, cash in the bank or property for a creditor to go after you if they sue you for non-payment and win. If you don’t go bankrupt the advantage is that you will not have to pay for bankruptcy , with money you don’t have but the downside is that not paying your bills will leave you with bad credit, subject to collection calls, and possible lawsuits. If a creditor does decide to sue you and you lose, you can always go bankrupt then to get rid of those claims. The most stressful part of not paying your bills is dealing with collection pressure. But there are ways to deal with that. See How to Hide From Debt Collection, the Debt Collector, and Creditors for details. If you find that you are able to pay for your regular expenses after you stop paying your bills, then maybe bankruptcy is an investment worth making. In that case, you should meet with a local bankruptcy attorney and ask for a free bankruptcy review to discuss your situation. But, if you continue to get further behind then going bankrupt now will prevent you from going bankrupt latter and completely discharging your debts for another eight years and that can leave you hassled and without options. Additional Steps to Take There are some other ways to help increase you deal with this situation. While they won’t give you income via a check, they can lower your expenses to help you live. Rent assistance advice is possibly available through the Housing & Urban Development agency. For medical care you quite possibly qualify for Medicaid . You’ll have to contact your state Medicaid office to learn how. You may be eligible for food assistance programs , like SNAP. Job directories are available online . You can contact your local city or county health department and let them know your situation and see what local programs may be available. I’d explore the Social Security denial some more. The DisabilitySecrets website has some good advice on it. Just because you have been turned down, does not mean that you are either not eligible or can’t get it. It may take a fight. You can also get a free case evaluation here . Gratitude This may be the hardest step to take but the most important in dealing with your situation. While your situation is bad, it could always be worse. It sounds like you have children that love you, you’ve lead a nice life up until your medical problems, and you are still able to see a beautiful sunrise and draw a breath. Rather then feeling as if life is raining down on you, look for every opportunity to be grateful for what you do have. While your retiree insurance plan has a “lousy” $5,000 deductible, at least you have some retiree insurance, many don’t. Each hour and each day start focusing your attention on being thankful for the help you do get, the lives you changed as a teacher, the door held open by a stranger, a hug from your child, or a nice word you can offer to a stranger. Smile. Granted, it won’t change the numbers of your debt but it will help you to move through the days with more grace, instead of more fear. Big hug. Steve Source: Holy, Divorced, Disabled and Desperately in Debt Other Related Articles to Read Willis Asks “Do I Pay Or Ignore My Credit Card Company?” Disjointed Use of Your Credit Score Can Leave You Unemployed or Dead Shellie Had Cancer And Is Now Slowly Dying From Terminal Debt Rachel is in Medical Debt, Was Sued And Lost. What’s Next? Trisha is a Single Mom, Separated, and Facing Bankruptcy. What Should She Do?

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Holy wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, I am a divorced 56 year old woman who suffered an injury as a teacher in a public school in May, 2000. I now suffer with a severe and permanent chronic pain condition (Reflex Sympathetic Dystrophy). Social Security refused me any disability (chronic, debilitating pain is not considered disabling) and due to the struggles I’ve experienced throughout these 8 long years, I am deeply in dept. This probably would not have happened had I not been ill and needed pain med and treatments, which I am convinced alter my ability to make good decisions. I relied upon help from my brothers who abused their powers and left me owing close to $50,000 in credit card and medical debt. I am trying to work but just can’t function well enough to be able to pay these debts off, and still accumulate medical expenses at a frightening rate. I am trying to sell medicare insurance in an attempt to work again at my own pace since I never know if I can work from day to day and can’t handle stress associated with typical 8-5 jobs. It is hard and I feel like I’m adversely affected by my meds and am always trying alternate forms of therapy to alleviate my symptoms, but instead am feeling worse as time goes by. Is bankruptcy my only option? I was never a credit risk until 2005 when my brother’s manipulations put me in debt, and my medical expenses escalated at a frightening rate. I have no property anymore, and live with my son. I went from having a 750 credit score, nearly $20,000 saved after my divorce, no debt and the ability to earn between $45,000-75,000 a year to struggling on $14,770 a year in disbility retirement. My lousy retiree insurance plan requires a $5,000 a year deductible! My medical costs (meds and payments on accounts) average $500 per month, and I’ll never pay some of those debts off, much less be able to pay future expenses off. My car is 11 years old and pretty close to expiration, my brothers stole anything of any value I could sell, and I just don’t know what to do? Unfortunately, my children are young and struggling with their own businesses and lives, and can’t help much, nor do I want their help. Can you suggest a plan for relief of some kind? Holy” Dear Holy, I am positive that with everything that has gone on and is going on it must feel like there is no direction to head in to get any sort of relief from the drumming pain and depressing debt. Let’s tackle this is stages. Disability Just because you have been denied disability does not mean you are not entitled to it. It just means you’ll have to fight harder for it, that’s all. Many denied disability claims are approved on appeal as they move up the chain of command. See a previous question, “ Roise Has Panic Attacks, Can’t Work, And Is Now Out of Money ” for more information on steps you can take to push your case forward. Instead of giving up, get professional help. Growing Medical Debt You stated that you are still accumulating medical debts at an alarming rate. That concerns me. Even if you went bankrupt right now I’m not confident that it would place you in a better position since you may just accumulate debts that you will be unable to pay following bankruptcy . So in that situation, while bankruptcy may eliminate your past debts, it won’t do anything to improve the future. Stop Paying Your Bills. Really! The best course of action for you to take right now would be to stop paying the bills of unsecured creditors that would be discharged in bankruptcy . I know that sounds crazy, but it’s not. In your current situation you have no assets, cash in the bank or property for a creditor to go after you if they sue you for non-payment and win. If you don’t go bankrupt the advantage is that you will not have to pay for bankruptcy , with money you don’t have but the downside is that not paying your bills will leave you with bad credit, subject to collection calls, and possible lawsuits. If a creditor does decide to sue you and you lose, you can always go bankrupt then to get rid of those claims. The most stressful part of not paying your bills is dealing with collection pressure. But there are ways to deal with that. See How to Hide From Debt Collection, the Debt Collector, and Creditors for details. If you find that you are able to pay for your regular expenses after you stop paying your bills, then maybe bankruptcy is an investment worth making. In that case, you should meet with a local bankruptcy attorney and ask for a free bankruptcy review to discuss your situation. But, if you continue to get further behind then going bankrupt now will prevent you from going bankrupt latter and completely discharging your debts for another eight years and that can leave you hassled and without options. Additional Steps to Take There are some other ways to help increase you deal with this situation. While they won’t give you income via a check, they can lower your expenses to help you live. Rent assistance advice is possibly available through the Housing & Urban Development agency. For medical care you quite possibly qualify for Medicaid . You’ll have to contact your state Medicaid office to learn how. You may be eligible for food assistance programs , like SNAP. Job directories are available online . You can contact your local city or county health department and let them know your situation and see what local programs may be available. I’d explore the Social Security denial some more. The DisabilitySecrets website has some good advice on it. Just because you have been turned down, does not mean that you are either not eligible or can’t get it. It may take a fight. You can also get a free case evaluation here . Gratitude This may be the hardest step to take but the most important in dealing with your situation. While your situation is bad, it could always be worse. It sounds like you have children that love you, you’ve lead a nice life up until your medical problems, and you are still able to see a beautiful sunrise and draw a breath. Rather then feeling as if life is raining down on you, look for every opportunity to be grateful for what you do have. While your retiree insurance plan has a “lousy” $5,000 deductible, at least you have some retiree insurance, many don’t. Each hour and each day start focusing your attention on being thankful for the help you do get, the lives you changed as a teacher, the door held open by a stranger, a hug from your child, or a nice word you can offer to a stranger. Smile. Granted, it won’t change the numbers of your debt but it will help you to move through the days with more grace, instead of more fear. Big hug. Steve Source: Holy, Divorced, Disabled and Desperately in Debt Other Related Articles to Read Willis Asks “Do I Pay Or Ignore My Credit Card Company?” Disjointed Use of Your Credit Score Can Leave You Unemployed or Dead Shellie Had Cancer And Is Now Slowly Dying From Terminal Debt Rachel is in Medical Debt, Was Sued And Lost. What’s Next? Trisha is a Single Mom, Separated, and Facing Bankruptcy. What Should She Do?

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Bob wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, Can I ask for your advice since I’m so overwhelmed with debt. I have 4 credit cards with approximately $48,000 in balance. I’m only paying the minimum amount due per month because that’s all I can afford considering the other expenses I need to pay (mortgage, car loan bills, etc). Most of the debt here were house related since we were expecting to have our house refinanced after several months and payoff some if not all our credit card debts. But we are underwater so refinancing is not possible. The I stumbled upon your website. I’m the only one working since my wife takes care of our baby. What can I do? Please help. Bob” Dear Bob, You are drowning in debt and the only fundamental ways to change the balance of debt problems is to lower obligations, increase income, or a combination of both. Or think about it this way, lower the water level or increase your height above the water line. The technical way to get out of debt is easy, spend less than you earn. But when your income is completely spoken for and obligated, even before you bring it home, that’s a problem. The liability of debt is that in order to repay it you must work and earn in the future to meet that obligation. Currently all of your future labor has been pledged to meet those past obligations. The only way around that would be for you to get a raise, to get a second job, for your wife to go back to work and earn more than the cost of daycare for your baby, or to look at reducing or eliminating your debts. The two most mainstream approaches available to you would be to look into a debt management program and see if your credit card payments could be lowered in a debt managment program ( click here ), or bankruptcy ( click here ). Bankruptcy would allow you to get out from underneath your underwater house and discharge your credit card debt to allow you to start over. But before you do anything, I would encourage you to speak to a local bankruptcy attorney and ask for a free bankruptcy review and to speak to a debt management program provider. Only once you are armed with the facts of how those solutions will assist you can you make the best decision about which option is best for you. My gut tells me that once you evaluate both a debt management plan and bankruptcy , that bankrupty will make more sense. Big hug. Steve Photo: Chris Carpenter Source: Bob Is Underwater And Drowning, In Debt Other Related Articles to Read Government Handing Out Secret Bailout Money to Pay Off Credit Card Debts Tanisha Wants to Cash Out 401K To Get Rid Of Debts. Diana Is Struggling to Make Credit Card Payments And Afraid Terrance Says His Debt Problems Are Worse Than Anyone He Knows Kayte Has Drained Her Savings And Can’t Pay The Bills Anymore

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“Little Three” Detroit automakers seem to be consumed with fear that people would not purchase a new car from an automobile manufacturer that was or has gone bankrupt and that the fear of bankruptcy is scaring buyers away. I think this just shows how out of touch that Detroit is with the American buyer. It is not the thought of a car marker going bankrupt that is keeping people away from showrooms. Hey Detroit, maybe it is: The fear of job loss. Economic doom and gloom. Low gas mileage cars for sale. Can’t get financing to buy them. Lack of innovation. Realization that the cars that come from Detroit are full of cheap plastic. Years of not being treated like a valuable customer when a problem with the car occurs. And Detroit, before you get all high and mighty with yourself, look around, other car maker sales are down as well. Just yesterday I was sitting with my cousin who was born and bread in Detroit, who always buys Detroit made cars and even he was saying he had no sympathy for Detroit car companies. “I’ve always bought Detroit cars but not anymore, the current car I’ve got I’ve had to go after them under lemon laws to try to get my check engine light fixed. Instead of fixing it they’ve given me such grief and run around I can’t believe it. And a friend of mine had an engine go on his Toyota shortly after the warranty ran out and the Toyota dealer replaced it, no problem.” I’m not sure how giving the carmakers a bailout is going to even address those issues and Detroit, that’s the problem. If you want to make sure that people will still flock to you if you go bankrupt, which you probably should to restructure your legacy obligations, then simply create a third-party trust fund to pay into for warranty service liabilities. That would go a very long way to ease purchase worries that you think people might have. And would your bankruptcy potentially impact the retirees that count on you for full medical care, it probably would but the underlying issue here is that it is a promise that should never have been made to employees, at all. Promising employees any sort of lifelong benefit is irresponsible unless you already have the money set aside to meet that obligation. If not, then those promises were nothing more than empty promises. When I bought a new car last year, I looked at domestic cars and foreign cars, which are also made in America, and I bought a Honda. You know what, Honda could go bankrupt today and I just have ten times more confidence that they would make provisions to treat their customers with grace and consideration. I’m not sure that you guys in Detroit deserve that kind of respect and loyalty from the people that have purchased your cars and trucks over the past decade. Big Three Bankruptcy You know Detroit, you can continue to spend tens of millions in lobbying Washington and trying to paint a picture about how bailout money will hurt your workers but let’s be real here. Your financial dilemma did not just happen, it has been brewing for years. If anyone has let down your workers and retirees, it is only you. Failed and arrogant management has continued practices and ways of doing business that have lead to legacy obligations and commitments that simply can not be afforded in this economic winter. That is not the fault of the tax payer. I think taxpayers would be more willing and supportive of your case if you actually had a plan about how to money would be used to restructure your businesses and lead us forward with quality products into a new age. But what am I to think when I hear you say that in this economic climate that you are going to have to cut way back on research and development. What! It is exactly research and development that needs to be ramped up to lead us where we want to go in safe, fuel efficient cars and trucks. Hey Detroit, Lead, Follow, or Get Out of the Way . Sound familiar? Photo by Derek Farr Other Related Articles to Read Chris is in College With His Soon to be Wife And Slipping Below The Waves in Debt Government Help With Credit Card Debt So What If GM Goes Bust. Let’s Just Hope You Don’t Own a New GM Vehicle. Humor: US Solves Credit Crisis, Credit Cards Is The Government’s Financial Bailout Going To Help You Get Out Of … - WebWire

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Rosie wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, I worked as a teacher for sixteen years. I developed disabling panic attacks which would no longer allow me to work. Soon after, I filed for bankruptcy. I later applied for social security disability in 2001 but was denied. In 2003 I was forced to sell my home in order to have money to live. I began renting an apartment with a roommate and have managed to frugally live on the proceeds of the sale until now. I was able to reestablish an excellent credit record. But my funds have now been completely depleted and my credit cards have been my sole source of support the last several months. I have nothing left, no money and no family or friends that can help in any way. I tried reapplying for social security disability recently but was denied again. All I have is some credit card credit left. But by next month, I will no longer be able to make my minimum payments, pay rent/utilities, or buy food. My roommate was just laid off and cannot help either. I am 46 years old and facing homelessness and hunger. I am completely terrified. I am a good person and have always been a very good money manager. I suffer from extreme anxiety disorder and after many years of therapy and treatment, my condition just will not go away. I do not have the money for anymore treatment, and I have continually looked for work that I can do at home, but I just have not been able to find anything. What do I do? I’m afraid I am a hopeless case. Thank you for reading this. Rosie” Dear Rosie, I’m so sorry that you are living through this situation and a resurgence of your panic attacks. Debt does not help anxiety, it intensifies it. The biggest issue is that for whatever reason, you have held off finding a solution for this terrible situation until the very last minute. Debt problems are not like a fine wine, they don’t get better with age. I understand the limiting factors of your situation with the anxiety and panic attacks. I feel for you but that does not change the fact that you have no money coming in to live on, to safely shelter yourself or to keep you warm. The reality of your situation is that once you started living on credit cards to get by, you were also living on very borrowed time. With cash gone, credit gone and soon, your apartment potentially gone, there is a good chance that you may wind up homeless. The good news is that there might be some solutions to provide advice and assistance. Rent assistance advice is possibly available through the Housing & Urban Development agency. For medical care you quite possibly qualify for Medicaid . You’ll have to contact your state Medicaid office to learn how. You may be eligible for food assistance programs, like SNAP . Job location assistance and job directories are available online . You can contact your local city or county health department and let them know your situation and see what local programs may be available. I’d explore the Social Security denial some more. The DisabilitySecrets website has some good advice on it. Just because you have been turned down, does not mean that you are either not eligible or can’t get it. It may take a fight. You can also get a free case evaluation here . Although disability claims based upon mental impairments may be harder to achieve an allowance at the initial and reconsiderations levels, these claims have a fair chance of allowance at the administrative law judge hearing. Therefore it would be sound advice to appeal your claim if you are denied at the initial and reconsideration levels of the Social Security disability process. Specific guidelines for anxiety related disorders are found in Social Security’s Listing Of Impairments in Section 12.06. According to these guidelines an anxiety sufferer must have “a persistent irrational fear of a specific object, activity, or situation which results in a compelling desire to avoid the dreaded object, activity, or situation. Or recurrent severe panic attacks manifested by a sudden unpredictable onset of intense apprehension, fear, terror and sense of impending doom occurring on the average of at least once a week”. Since the Social Security Administration approves panic attack disability benefits on a case by case basis, there is a formal application process. There are strict guidelines for average monthly income made year-to-date, case severity, and future work plausibility. However, for those stricken with debilitating anxiety and panic attacks that make work impossible, it offers a glimmer of hope and financial assistance. But even with all these helpful tips we can’t take our eye off the primary issue, the lack of income. Establishing a source of income must be the number one priority. Without income you will not have many, if any, choices. I would suggest taking a look on Snag A Job for places that are hiring, right now, in your area. Rosie, I think that if you put effort into exploring all of these options that out of it you may create at least an emergency solution that may assist you. Big hug. Steve Source: Roise Has Panic Attacks, Can’t Work, And Is Now Out of Money Other Related Articles to Read Clinton Wants to Know “Am I Doing The Right Thing By Repaying My Debt?”

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Eva wrote to me through the GetOutOfDebt.org site and asked the following question. If you have a credit or debt question you’d like to ask just use the online form . I’m happy to help you totally for free. Income from the GetOutOfDebt.org site advertising is used to help alleviate poverty . If you would like to help me to help others, there are easy and free things you can do, click here to learn how you can help . “Dear Steve, My husband and I just bought a home and besides the mortgage, we are in debt for $26,000. I called up my credit card companies and they said they aren’t offering lower rates to customers now. I went to CCCS website and they say lowering customers rates is one of their ways they can help out. If I can’t get the credit card companies to lower my interest rates, how can CCCS? I have also read some negative things about CCCS and other agenices like theirs. What can I do to protect my family from not being able to make ends meet? Eva” Dear Eva, Congratulations on the new house. I got you this answer for a house warming gift. CCCS or any credit counseling group offers what is called a Debt Management Plan or Debt Management Program , DMP, as a way to consolidate your debts. Many people think it is a loan, it’s not. Others think it is an easy way out of debt, not necessarily. Credit counselors are recognized by creditors to offer special terms that might involve lowering your interest rates. These terms are generally reserved for people that are having financial problems, not as a way to just lower your monthly payments. Entering into a credit counseling program can negatively impact your credit score since it is an indication that you are having financial problems. And once your creditors see or learn about your participation, your interest rates and/or monthly minimum payments could go up. A credit counseling program is paid for primarily by the creditor that pays the credit counseling group a percentage of money they collect from you and return to the creditor. I know, it sounds dangerously close to the services provided by a debt collection agency. Now, there are times to use a debt management program , especially if you are having a tough time getting by each month and if you don’t get into a debt management program then you will fall behind or go bankrupt. Nobody can give you specific advice about what terms will be offered to you in the debt management or credit counseling program until you contact the credit counseling group and ask about what terms your specific creditors typically offer. Since the terms and interest rate reductions are very important to you, I think you should contact this group and see what the current terms are. When you contact them, also be sure to ask what your creditors will do with your minimum payment when you are in the debt management plan and ask for an estimate of what your monthly payment would be. There is no reason for you to enroll or signup for a debt management plan to learn this information and while CCCS is one group that offers debt management plans, they are not the only one. Finally, a debt management plan is primarily dictated by the terms the creditors offer through the credit counseling agency and not by the credit counseling agency negotiating on your behalf. There is no negotiation. Protecting your family from not making ends meet has less to do with CCCS than it does with utilizing your money so that your most important bills are paid first. This means that your mortgage , car payment, utilities, food, etc. should be paid before you send any money towards your credit card debts. In fact, I think you should also be putting at least $100 a month into a savings account as part of your most important obligations. If you were to fall behind on your bills and creditors closed your accounts, you’d need the savings account money to help you in an emergency. Its logical and makes sense. Big hug. Steve Source: Eva Has Heard Negative Things About CCCS Other Related Articles to Read April Wants To Know “As A Single Mom, How Do I Get Out Of Debt?” Jeannie Already Went Bankrupt And Is Now With CCCS But Can’t Afford to Feed Her Daughter The Perfect Debt Assistance Program Rita Asks “Should We Consolidate Our Debt?” Tony Writes In “I Have Too Much Debt On My Credit Cards”

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I do more than just write answers to questions, I read as well. And my days involve math as well. It’s like being back in school, but this time with a calculator and spell check. Oh where were you when I needed you. Back then we had flash cards and now we have flash RAM. I still remember when my high school chemistry teacher let us put down our slide rules and bring in a calculator. And those early calculators were expensive. But my best memory was when fellow classmate, Jeff Kemp , latter NFL quarterback, brought in the first calculator and someone stole it. Damn you chemistry students! So anyway, the original plan for this post was to share with you what I’m reading today to see what is going on. I’ll just post a running list below. What I’m Reading Today Economists React: CPI Reflects ‘Crunch’ in Consumer Spending Automakers’ Issues Worry Credit Markets Investors Hit BofA Loan Modifications ‘Saved by Zero’: The Toyota Ad That Won’t Stop Plastic Surgery Below the Belt (I thought the title referred to cutting credit card debt, ‘plastic surgery’, oops. Warning: It’s Not!) The New Star Trek Trailer Is Online Reid seeks to lower expectations for auto bailout Less Power to Purchase: Consumers’ Credit Card Limits Slashed as Companies Try to Reduce Risk Mortgage ‘Reform’ Is Just a Small Step Forward The Money Has Come From Somewhere Time Inc. Layoffs: Publishers, Top Execs. at Southern Progress and Cooking Light Out BASF to Shut Down 80 Plants Temporarily, Cuts View Top Traders Still Expect the Cash Fury at U-turn on IVAs: Insolvency experts attack Government’s retreat from plans for simplified IVAs. The ten most expensive places to park in the world What I’m Watching Today Embedded video from CNN Video Embedded video from CNN Video Embedded video from CNN Video Source: What I’m Reading and Watching Today Other Related Articles to Read Kam Says “I Have Charged Off Debt In Collections And I’m Scared to Tell My Husband” Hank is on Disability And Wants to Borrow From His Retirement Plan to Pay Off Credit Card Debts Karen Writes In. “My Interest Rates Are Going Up. My Minimum Payments Are Going Up. Help!” Government Help With Credit Card Debt MJ - “I’m Ill, I’ve Got Bills, And I Don’t Know What To Do”

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There is more to worry about if GM goes bust. Sure, nobody likes yet another bailout but the repercussions in job losses will rocket through not only the car company but all the suppliers, local economies, GM dealers, and so much more. But here is a subject that I have not heard talked about. If GM goes bust and you own a GM car or truck then your car or truck will immediately become worth less, a lot less. If GM no longer exists then warranties are gone, dealers are gone, a deep supply of parts is gone and along with that goes the value of your now defunct GM manufactured car. This will spell real trouble for anyone who has financed and still owns a GM car or truck when the value of the ride plummets but the loan remains at the current amount due. You will instantly become upside down in that loan without any way to escape it. All of this happened a couple of years ago when Rover in the UK went bust. Owners were instantly stuck with a nice car with nothing behind it. If you wanted to buy a Rover car you still could, but why would you want to invest in an unsupported ride? Take a look at what many of the old Rover dealers are doing now. When you visit their sites you won’t find a mention of Rover support or service anymore. So before you start gathering wood to build torches to march on Washington against yet another government investment in our quickly sinking economy, just hope that you are not drive a GM, and oh yes, a Ford. Other Related Articles to Read How to Talk to Your Children About Your Financial Problems As Economy Slows, Lenders Begin to Curb Credit Cards In this economy, layaway is in vogue Which Presidential Candidate Is Better For Debtors? Personal Finnance Bloggers Question of The Week. Humor: US Solves Credit Crisis, Credit Cards

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