DEAR SAVVY SENIOR: What resources can you recommend to help seniors with financial problems? I hate to admit it, but I've fallen behind on my house payments and have accumulated quite a bit of credit card debt over the past few years. Where can we get help?
Indebt at 70
DEAR INDEBT: There are actually a number of free and low-cost resources available today that can help seniors who are struggling with credit card and/or mortgage debt. Here's where you can turn for help:
To help you get a handle on your credit card debt, a good place to start is at a credit counseling agency. These are nonprofit agencies that offer free financial education and advice on how to handle financial problems.
And if your debt is significant, they can set you up in a debt-management plan that allows a counselor to negotiate with your creditors to lower your interest rates and eliminate any late fees and other penalties. The agency will then act as a consolidator, grouping your debts together into one payment that you would make, and distributes those funds to your creditors. Most agencies charge a one-time $30 setup fee and a monthly maintenance fee of around $20 for a debt-management plan.
To locate a credible agency in your area, use the National Foundation for Credit Counseling website at debtadvice.org or call (800) 388-2227.
Do not use a for-profit debt settlement company that claims to settle all your debt or cut it in half for a fee without counseling. Most of these companies use deceptive practices and will leave you more in debt then you were to begin with.
If you have fallen behind on your mortgage payments, or if you have received a letter or phone call about missed payments, you should contact your lender immediately to explain your situation and see if you can work out a payment plan. Be prepared to provide your financial information, such as your monthly income and expenses.
You also can get help from a housing foreclosure avoidance counselor. These are HUD-approved, trained counselors approved by U.S. Department of Housing and Urban Development that will work with you, examining your financial situation, and offer guidance on how best to avoid default or foreclosure. They can also represent you in negotiations with your lender if you need them to.