Managing debt a critical taskWednesday, March 26, 2008 Worried about your debt? You're not alone. Credit reporting agency Experian reports the average resident of the east north central region of the United States, including Michigan, owes $15,285 on credit cards and fixed-payment accounts, excluding mortgages. ''(Debt) is on everybody's mind right now,'' said Emily N. Reed, a financial counselor who manages GreenPath's Saginaw Township office, 4600 Fashion Square, Suite 110. You may want to speak to a financial counselor, said Shelley L. Taylor, collection manager at Wanigas Federal Credit Union, ''if you have more week than paycheck, or if you have bills that you are putting aside and paying late.'' Calls from collection agencies about unpaid bills or shut-off notices for utilities also are red flags, she said. The first step to getting help, Taylor said, is to call a debt or credit counselor, who will go over your debts and credit report with you for free. Counselors will teach you how to set a budget and help you make a plan to pay off debts. In the plan, a debt management company will take a payment each month from you and use that to pay off your creditors, often with reduced rates that they negotiate on your behalf. ''A lot of credit card companies won't deal with the debtor on an individual basis,'' Taylor said. A debt management company will work with creditors to have interest rates lowered, adjust monthly payments or have debts re-aged, meaning the creditor will stop adding late-payment fees to the account. Many debt management companies are nonprofit, but they may charge a service fee. Taylor said to use care when choosing a company. Avoid settlement companies, which often charge large start-up fees, or any agency that promises to slash your debt in half. ''If it sounds too good to be true, it is,'' Taylor said. ''Going through debt management is painful.'' Look for someone local, Taylor said, or a company with a local office -- someone you can see face to face. Your credit union or banking institution also may recommend someone trustworthy. Reed said the National Foundation for Credit Counseling, an organization that certifies credit counselors, is a good resource for finding an ethical counselor. Its Web site, www.nfcc.com, allows users to search for a certified counselor by ZIP code. Another important step to managing debt, Reed said, is to look at your budget: Get out your bills and see what you're dealing with. It's important to actually read your credit card bills, as well, as many people pay the minimum payment each month without looking at the principal or the amount of interest they are charged, Reed said. If you get one bill paid off, put the money that would have gone toward that bill to paying off others, Reed said. And keep paying the same amount each month. Many companies will allow you to reduce your minimum payment, Reed said, but that can make things worse for you in the long run as interest continues to accrue on your balance. v Rhiannon Thomas is a staff writer for The Saginaw News. You may reach her at 776-9682. Source: http://www.mlive.com/news/saginawnews/index.ssf?/base/news- |
| Trust Deeds | IVAs |
| Home | About Us | Articles | Resources | FAQs | Contact Us | Privacy Policy | Terms & Conditions | Sitemap | Glossary | Testimonial |