Being in a financial hole causes major stress
Dear Liz: I'm a 25-year-old mom of a 5-year-old, living with his father in a one-bedroom apartment. We split all expenses down the middle, which is fair. I work while Dad receives disability income. I'm about $4,000 in debt, which isn't a lot, but on my salary, I can't afford the payments the credit card companies want. The constant collection calls are really stressful. No one knows that I'm in money trouble and the secret is killing me. The stress is affecting my life on all levels. I can't seem to save any money. I feel like I'm drowning and have no idea where to turn for help. Liz, please if you can, could you give me any advice on how to tackle this so my life won't feel like such a wreck?
Answer: If you're close enough to live with someone and have his child, you're close enough to discuss finances -- including debt. You're going to need to make changes to deal with these bills, and you're unlikely to accomplish that if you're still trying to keep the problem a secret.
You may be a good candidate for a credit counselor's debt management plan, which would stop the collection calls and allow you to pay back your debt at lowered interest rates. You can find an agency near you through the National Foundation for Credit Counseling ( www.nfcc.org).
Even with a debt management plan, you'll probably have to cut expenses, earn more income or both. Let your son's daddy help with this process and you can speed up the day when you'll be debt free.
By the way, marriage provides more than a thousand legal and financial benefits. It's definitely worth considering.
Credit reporting can be too costly
Dear Liz: I recently sold a house to a young couple on a contract basis. They asked if I could report their payment history to a credit bureau. Am I able to do this and if so, how? I haven't been able to get an answer to this by Googling or by phone.
Answer: The short answer is that you could, but it would be prohibitively expensive to do so. The credit bureaus don't publicize the exact costs to subscribe to their services, but Maxine Sweet of Experian says those fees are substantial.
Companies that subscribe to Experian's credit reporting services have to pay for a thorough background check, including a physical inspection of the property, Sweet said. Companies are required to sign a contract detailing all relevant laws and Experian policy, plus participate in an automated dispute system that provides instant transmittal of complaints and responses.
