My husband and I, who are both 66 years old, have fallen behind on our mortgage payments and have accumulated quite a bit of credit card debt over the past few years. Where can we get help?
Unfortunately, credit card and mortgage debt have become a growing problem for many older Americans who often face medical expenses on top of their mortgage and other growing costs. Here are some tips and services that can help.
Credit Card Counseling
To help you get a handle on your credit card debt, an accredited credit counseling agency may provide assistance. These are nonprofit agencies that offer free financial information and advice on how to handle financial problems.
Depending on the significance of your credit card debt, they can help you sort out your finances and set up a debt management plan (DMP), which allows a counselor to negotiate with creditors to lower your interest rates and eliminate any late fees and other penalties.
The agency will consolidate your debts into one payment and distribute the payments to creditors. Typically, the first counseling session is free, but a DMP comes with monthly fees, often in the range of $20 to $75 a month.
To locate a credible agency in your area, visit the National Foundation for Credit Counseling website at NFCC.org (800-388-2227), and the Financial Counseling Association of America FCAA.org (800-450-1794).
Be wary of debt settlement companies that claim to settle all of your debts or cut your debt in half for a fee without counseling. Most of these companies use deceptive practices and will only leave you more in debt then you already are.
If you have fallen behind on your mortgage payments, or if you have already received a letter or phone call about missed payments, you should contact your lender immediately. 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 can also get help from a foreclosure prevention counselor. These are HUD-approved, trained counselors that will work with you, examine 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 necessary.
For a selection of housing counseling options see the Department of Housing and Urban Development website at HUD.gov – click on "Resources" at the top of the page, then on "Foreclosure Avoidance Counseling," or call 800-569-4287. You may also use the National Foundation for Credit Counseling or Financial Counseling Association of America websites. For phone numbers, see above.
You need to make sure you are not missing out on any financial assistance programs. The National Council on Aging's website, BenefitsCheckUp.org, contains a database of more than 2,500 federal, state and local programs that may assist seniors with prescription drug costs, health care, food, utilities, and other basic needs. The site will help you locate programs that you may be eligible for and will show you how to apply.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.