Question: We are trying to decide what our next step is to help us with our debt. We have been in debt for several years and we have always been able to pay our bills on time. We have several credit cards and one consolidation loan. The interest rates on them all are pretty good with just a couple being as high as 17.24%. My husband lost his job a while back and has been unsuccessful in finding another. His unemployment is about to run out and we are starting to get behind on a couple of accounts. I don't want to continue to live our life this way...it is very stressful. Do you have any suggestions for debt relief? My husband has been adamant about never refinancing our house loan, so is there an option besides that? Thanks so much for your time! Jen, Southern Pines, NC
Answer: There are no easy answers for your circumstances. I'm glad you're acting now to get on top of the issue. It will hold you in good stead.
The big concern in this area of seeking debt help is to avoid the scamsters and to find a legitimate outfit. I also think it's always helpful to talk to a professional even if you decide the advice won't work for you and your husband. It's still valuable information.
I would get in touch with the National Foundation for Credit Counseling, the largest national nonprofit credit counseling organization. It has been around for a long time and, although the quality of its staff varies around the country, it's a legitimate organization. You can find a branch near you on their website. A number of the organization's offices offer credit and bankruptcy advice over the phone and the Internet as well as in person, such as the Consumer Credit Counseling Service of San Francisco.
The credit counselor will go over your financial situation. A consultation and some practical advice may be all you need for now. You should also see if setting up a debt repayment plan with the service makes sense at this time. The fees for the consultation will range from zero to $30.
I would ask the professionals you talk to about the benefits and downsides of refinancing your home loan. I understand your husband's reluctance. It's a good baseline approach, but it could also turn out to be a way of buying some financial relief until you're in better financial circumstances. I don't know if that's the case (and refinancing may not be a smart move at the moment). I would just keep an open mind for now, understanding all your options and then deciding the best financial steps for you. .
The United Way (which recently announced a partnership with NFCC) is another resource. A number of churches and religious organizations have made an effort to expand their personal finance referrals and even consulting services.