Bills Mounting? There Is Help
By: Source: AARP.org Date Posted: 2005-03-20 12:08:23
In this age of easy credit, it's not unusual to feel pressured from time to time by mounting bills. But if you or a loved one feel overextended most of the time, you could be heading for serious difficulties. Spending too much money or taking on too much debt can result in credit problems. It could even lead to bankruptcy. Health problems or disabilities can also make it hard for some people to manage their own affairs.
Fortunately, there are programs to help people manage their money and their spending.
What You Should Know
Credit Counseling
A credit counseling agency can help you or a family member solve nerve-wracking money problems. These agencies can help you develop a budget that sets aside enough funds to cover your living expenses. They can also help you come up with a plan to pay off your debts. Through a typical plan, you might deposit money each month into a special account. The credit counseling agency would then use the money in this account to pay your debts.
You will pay a nominal fee for credit counseling sessions. You should be aware that credit counseling agencies receive much of their funding from creditors that are interested in getting back the money that consumers owe them. These creditors support repayment plans that help clients pay off their debts.
Look for a credit counselor who is certified by the National Foundation for Credit Counseling or has passed the Accredited Financial Counselor exam.
Daily Money Management Services
Daily Money Management (DMM) is another service that helps people manage their spending. Money managers can help you set up a budget or balance a checkbook. They can also help you organize and manage your financial and medical paperwork. You might even ask them to manage all of your financial affairs, or the financial affairs of a relative.
People often turn to DMM in a financial crisis. DMM can help in cases like this. However it's better to use DMM to help prevent money emergencies from happening.
You can decide if you or a relative needs DMM by asking two important questions. Do you or your relative receive many letters from creditors? Do you or someone you know have a mounting pile of overdue bills? If you answered yes, then DMM may be helpful.
Most daily money managers charge between $25 and $100 per hour for their services. The actual cost of DMM will depend on where you live and how complex your finances are.
Representative Payee Program
Does a family member receive benefits from the federal government? If so, he or she can use a representative payee to help with money-management chores. A representative payee could be a relative or friend, a bank or social service agency. The federal agency that sends benefits checks will appoint a representative payee for an individual. First, the agency will determine that the individual needs this service.
A representative payee receives an individual's benefits checks and deposits them into a special bank account. The payee then uses that money to pay the person's bills and take care of his or her daily needs. Representative payees cannot make medical decisions for the person they are helping. They also cannot enter into contracts on that person's behalf.
For More Information
For Credit Counseling Contact:
National Foundation for Credit Counseling (NFCC)
The NFCC is a nationwide network of nonprofit budget and debt counseling agencies that provide education programs and individual counseling sessions, either in person or by phone and mail. These agencies teach people basic money management skills, and help them resolve debt problems. Address and phone: 801 Roeder Road, Suite 900, Silver Spring, MD 20910, 301-589-5600. To find a local agency, call 800-388-2227 or visit the NFCC Web site. On the left side of the opening screen, click "Where to Find Us."
URL: http://www.nfcc.org
Myvesta.org
This Internet-based nonprofit organization provides several money management services, including a debt repayment plan.
URL: http://www.myvesta.org
Federal Trade Commission
The Federal Trade Commission has a brochure called "Fiscal Fitness: Choosing a Credit Counselor," which offers advice on choosing a credit counselor.
URL: http://www.ftc.gov/bcp/
conline/pubs/credit/fiscal.htm
For Daily Money Management Services Contact:
AARP
AARP is working with local agencies to operate the AARP Money Management Program at many sites nationwide. This program offers daily money management services to help low-income older people, and people with disabilities who have difficulty managing their finances. The dollar limit on "liquid assets" for clients in the AARP Money Management Program is $30,000. Annual income can't exceed $20,371 for single persons and $28,797 for a couple. For more information, click on http://aarpmmp.org/.
'Kiplinger's Personal Finance Magazine'
This online magazine features an article called "Breaking Free," published in 1999, which discusses how to use professional DMM services when medical bills and insurance claims become overwhelming.
URL: http://www.kiplinger.com
The Eldercare Locator
The Eldercare Locator provides information on how to reach the Area Agency on Aging (AAA) nearest to your parent or relative. The AAA can provide information about local DMM services. Call 800-677-1116.
American Association of Daily Money Managers
This group provides a list of Daily Money Managers by state and ZIP code.
URL: http://www.aadmm.com
Representative Payee Programs
If you think a relative could benefit from the Representative Payee Program, contact the federal agency that sends his or her checks. Each agency runs its own program.
Social Security Administration (SSA)
Call the national SSA at 800-772-1213 or call your local SSA office listed in the phone book.
URL: http://www.ssa.gov
Railroad Retirement Board
Write, call, or visit the nearest Railroad Retirement Board office listed in the phone book.
URL: http://www.rrb.gov
Department of Veterans Affairs
Call 800-827-1000 or call or visit your nearest Veterans Affairs regional office.
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