Finance & Banking


cially if you are already deep in debt or if it will take years to pay off the card bal- ance, in which case the interest charges could add up significantly. If you can’t afford your medical or hos-


pital charges, don’t allow the debt to be turned over to a collection agency, which could damage your credit score. Instead, contact the service provider’s billing de- partment to try to negotiate a reduced bill or a payment plan with monthly payments. Also ask about assistance from a govern- ment program or charitable organization. You can also consider turning to a


credit counselor for guidance, but choose one carefully because some offer ques- tionable or expensive services and others may be scams. For guidance on choosing a credit counselor, see a Web site from the Federal Trade Commission at www.ftc. gov/bcp/conline/pubs/credit/fiscal.shtm. If your medical bills are sufficiently


high, you could qualify for a federal tax deduction, so be sure to save bills and can- celled checks or other receipts for your tax preparer.


A divorce. Consult legal counsel because unin-


formed decisions could cost you. Also consider discussing tax issues with an ac- countant or other advisor because certain decisions, such as who will claim children on his or her tax return, can affect each parent’s tax liability. For more informa- tion, see IRS publication 504, “Tax Infor- mation for Divorced or Separated Indi- viduals,” online at www.irs.gov/pub/ irs-pdf/p504.pdf - PDF 1,02 You also may be able to reduce some


legal fees by working with a mediator to resolve issues such as child custody. Cancel joint credit cards to prevent the


other spouse from running up large bills. Start or build your own credit history in- dependent of the marriage, such as by opening a new credit card in your name only. Decide who is responsible for debts incurred during the marriage. If you change your last name, notify the major credit bureaus (www.equifax.com, www. experian.com and www.transunion.com). It’s also important that you update your


will and the list of beneficiaries you desig- nate on life insurance policies, retirement savings accounts and U.S. Savings Bonds,


42


so your money and other assets will go to the right people upon your death.


A job loss. Try to keep spending under control so


you can pay your bills using existing bank and brokerage accounts for, say, the next three to six months. If possible, avoid withdrawing or borrowing money from your retirement savings. If you anticipate problems paying debts, such as your mort- gage or the minimum due on your credit card, contact your creditors immediately and attempt to work out a payment plan. One reason to keep loan and credit card


payments current is so that you can main- tain the best possible credit record. Pro- spective employers may review your cred- it reports when you apply for a new job. Also, carefully review your employer’s


severance benefits, including the tempo- rary continuation of your salary and health insurance, and try to negotiate a better deal.


You can’t make your


mortgage payment. Regardless of the cause, if you’re hav-


ing difficulty paying your mortgage, you should contact your loan servicer and find out if you qualify for modified loan terms or other options to help you keep your home instead of losing it to foreclosure.


www.blackeoejournal.com You may also want to seek help from a


trained homeownership counselor. To find a reputable counselor, contact the Home- owner’s HOPE Hotline at the Homeown- ership Preservation Foundation (1-888- 995-4673 or www.995hope.org) or the U.S. Department of Housing and Urban Development for a referral to a HUD-ap- proved homeownership counseling agen- cy (1-800-569-4287 or www.hud.gov/of- fices/hsg/sfh/hcc/hcs.cfm).


You’re having problems making credit card or


other loan payments. No matter what triggers a personal fi-


nancial crisis, the important thing is to be proactive and address the problem as soon as possible by contacting your lender to try to negotiate a long-term, workable so- lution. And if you need help negotiating with


a lender or otherwise getting a debt prob- lem under control, consider asking an at- torney, accountant or another trusted advi- sor to refer you to a reliable credit counselor who, at little or no cost, can help you develop a recovery plan. If you’re facing problems on a loan secured by your home, including a home equity loan, see the previous bullet point about mortgage payments. Source: mymoney.gov


The Black E.O.E. Journal


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