Q.: There was a time when I was convinced that store credit cards were the way to go. Unfortunately, they got the best of me. Five years later, I’m still trying to pay them off. The problem is that the interest on the cards is as much as 22 percent. I am not even close to paying off the principal amounts. My credit is shot, and I can’t get any loans at the moment.
Do you think I should consider debt consolidation? I have contacted the companies and asked them to lower the interest rates, but to no avail. I don’t know where to turn next. – Reader, via email
A.: When you say "debt consolidation," I think you are referring to companies that negotiate with your creditors for lower rates of interest. Debt consolidators most likely would charge you an upfront fee; they also might charge you a percentage of the amount you pay the lender. Even though you might end up paying less per month because of these companies’ ability to negotiate with your creditors, I would be reluctant to pay a continuing fee.
If you have a full-time job and cannot put a dent in this debt, you should consider getting a part-time job and devoting that money to paying it down. Good luck.
Q.: My mother recently died, and I discovered she has no will, estate, executor, etc. When she died, she had only $350 in her bank account, which has subsequently been closed out.
She has outstanding bills, and there is no money to pay any of them. She didn’t even have life insurance that we could use to pay these bills. We had to pay for the funeral with the money she had and supplement it with our own money. What happens to the rest of her bills? – Reader, via email
A.: The easiest thing for you to do is to write to each of the creditors. Enclose a copy of your mother’s death certificate, along with a letter telling the creditor that there was no money left in her estate even to pay for her funeral. You can further state that the estate was not probated because there was nothing to probate.
I think this should close out the matter. Whatever you do, don’t ignore the bills. Meet this head-on and let the creditors know the situation.
