Debt Tips

Not everyone has the knowledge and discipline to get out of debt by themselves. Many people -- maybe you're one of them -- need someone to take them by the hand and walk them out of debt. There is nothing wrong with this.



My recommendation, if you decide you need some outside help, is that you consider working with a non-profit credit-counseling agency. According to the two major non-profit credit-counseling trade associations -- the National Foundation for Credit Counseling (NFCC) and the Association of Independent Consumer Credit Counseling Agencies (AICCCA) -- some eight million people came to member agencies for help in 2009. So if you need help, trust me, there's no reason to be embarrassed. You've got plenty of company.

Let's take a look at eight ways that a great non-profit credit counselor can help you:

There are 79 million baby boomers and all of them want their Social Security.

The latest reports on the health of Social Security say this massive number of retiring boomers will exhaust Social Security's trust fund money by 2037. After that the payments will have to come solely from current worker contributions. That's a scary thought, considering that there will be only two workers for every one retiree by then.

But before you panic, there are still 26 years to fix the problem. Here are five ways to right the sinking ship and keep Social Security flowing until at least 2075 when babies born in 2010 will be 65 and old enough to devise their own solutions.

This is the third installment in our Paying Off Your Debt series that looks at how real people beat their debt for good.

Sandy Reid, 41, got into debt the way a lot of people do -- with help from a spouse. "My husband and I were living large on a small income," says Reid, who has been divorced for a little over 10 years and debt-free for about six months.

How large? "We probably ate out for dinner five times a week," Reid says. "He was an avid golfer and needed all the newest toys for that. When we got married, we spent two weeks in Jamaica, which cost over $10,000. We felt that we deserved these things and didn't pay attention to the cost."

Your credit score impacts your ability to get out of debt and stay out of debt. The worse your credit score, the higher the interest rate you will be charged on money you borrow. The better your score, the less your debt will cost you and the quicker you'll be able to pay it off.

Being in debt isn't fun. While that's hardly groundbreaking news, that's the bottom line of a survey released last week by GreenPath Debt Solutions. Obvious or not, the survey still has some interesting nuggets about what it's like to be in debt, useful information to anyone who knows they're in trouble but wonders just how much trouble that debt is going to be.

Three debt-relief companies and their owner have been banned from the business under a settlement with the Federal Trade Commission for phony claims about their ability to help consumers eliminate credit card debts and halt harassing calls from debt collectors.

The defendants, Jonathan Greenberg, Hermosa Group LLC, Media Innovations LLC, and Financial Future Network LLC, have also been fined $500,000 to settle the charges.

As home values slip below what people owe on their mortgages, people are strategically defaulting on their loans. Why? Because in some cases, it makes good business sense to walk away from a bad investment -- just like the banks do all the time.

Of course banks like to beat their chests about how walking away from a mortgage will ruin your credit. Truth is, having good credit may be a luxury that no longer makes financial sense for your family -- right up there with taking vacations to Europe and leasing a new car every year.

We spoke to various mortgage and credit advisers, all of whom advised that walking away cavalierly from a financial loan obligation may be injurious to your financial health. But if you are going to do it, they quickly add, do so prepared:

The sluggish economy is still a cloud over many of our heads. And for those still unemployed, paying a mortgage on an underwater house or desperate to get out from under credit card debt, a lean budget may be more than just temporary.

If you're trying to make money stretch further in 2011, here are five tips and strategies.

WalletPop readers already know that credit scores fall into a range between 300 and 850. While it can be difficult -- if not impossible -- for most of us to reach that "holy grail" of 850, it turns out that it's even tougher to hit the bottom of the barrel. Even people who make every mistake in the book don't drop to a 300 score, experts say.

Part of the reason is that lenders have a tendency to stop handing money to people who blow off their bills and have to be hounded for payments. That said, though, banks once again have begun issuing credit to people with poor scores, although the cost for them to borrow is much higher.