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Question: I just learned that my job is being
cut. Is there anything I can do to keep from
getting buried with bills?
Answer: Contact your creditors right away and/or
work with a credit counseling service. Try to
work out a plan that will reduce your monthly
payments to an amount you can handle until you
begin a new job. Don't wait until your accounts
have been turned over to a debt collector.
Late payments and non-payments will show up on
your credit record, and that can negatively
affect you in the future. A poor credit record
may mean higher interest rates on loans, higher
insurance premiums, being turned down as a
renter - and could even stand in your way of
getting the job you want.
There are several advantages of working with a
credit counseling service. A counselor can help
you analyze your income and expenses and
identify areas where you can cut back as well as
suggest strategies for saving money. A counselor
also can negotiate a repayment plan on your
behalf.
Last year, about 3 million people took advantage
of credit counseling services. That number is
expected to rise dramatically for two reasons:
the uncertain economy and the new bankruptcy
law. In the future, anyone considering
bankruptcy will be encouraged to seek credit
counseling.
Credit counseling is available face-to-face, by
telephone and over the Internet. No matter which
process you prefer, Consumer Reports (July 2001)
recommends that you ask seven basic questions:
- What will counseling involve?
- How much training do counselors have?
- What information do counselors need from me
to make an assessment?
- What is the most I will have to pay?
- What sources of income does the counseling
service receive?
- How long is the wait for counseling?
- How long does the counselor take to assess my
financial situation?
For face-to-face counseling, contact The
National Foundation for Credit Counseling
(NFCC), 1-800-388-2227; Web site: www.nfcc.org.
Locally, call 229-0695.
The InCharge Institute of America at
www.incharge.org offers credit and debt
counseling and management by phone and counsels
consumers who are considering bankruptcy. Call
1-888-454-2355.
Myvesta, an Internet-based agency at
www.myvesta.org, can be reached at
1-800-680-3328. There are many more, so shop
carefully.
For more information, contact your local
Colorado State University Extension office.
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