Handling Bills During a Job Transition

By J. McKenna

PowerPay Offers Debt Repayment Choices

Reduced income from a job loss is challenging when we have loan payments coming due. PowerPay was created by Extension professionals at Utah State University. This computer program shows the impact of making "power payments" on consumer debts. In just a few minutes a consumer can compare several ways of trimming credit costs.

Initially, PowerPay calculates the repayment time and interest costs if payments are made at current levels. It is shocking for most consumers to see the interest costs and length of time it takes to repay debts, especially if they're making only the minimum required payment. PowerPay calculates the possible savings of rolling over partial or full power payments according to three scenarios: paying off creditors with highest interest rate first, paying off creditors with the lowest balance first, or paying off creditors with the shortest term first.

People using PowerPay can explore possible savings from consolidating some or all the debts. PowerPay is a powerful tool to help people make decisions about trimming their debt repayments.

Extension educators use a software program, PowerPay, to help individuals decide how to best handle loan payments. You can contact your local Extension Office to make an appointment for a PowerPay analysis.

Consumer Credit Counseling Service

Another source of debt repayment help is Consumer Credit Counseling Service (CCCS) of the National Foundation for Consumer Credit. To find the service near you use the member agency locator at http://www.debtadvice.org/takethefirststep/locator.html.

They suggest a number of steps people can initiate right away.

"Contact your creditors with a revised payment proposal. Take the offensive. Call your lenders before they call you." When you call a creditor, have the following information ready: account number, reasons why you would like to renegotiate your payment, and how much you propose to pay until you get back on your feet.

The CCCS says, "If your payments have always been on time, don't be surprised if they refuse to negotiate with you. Unfortunately, your creditor may not believe you until your circumstances force you to make a reduced or late payment. Keep those lines of communication open. Be sure and keep a record of all of your calls and correspondence with your creditors. This will help you keep track of what your creditor has agreed to and protect you if your creditor forgets your previous conversations."

Don't ignore bills. You don't have to handle this alone. Seek help from a source who can help you understand what to do next.