Consumer Alert
ONE IN FOUR AMERICANS WOULD NOT INFORM SPOUSE
OF FINANCIAL DIFFICULTIES
Washington, DC - The National Foundation for Credit Counseling (NFCC) September online poll revealed that twenty-four percent of more than 1,400 respondents would not tell their spouse if experiencing financial difficulties.
Reasons given for withholding the information included the fear that it would worry the spouse (nine percent); that the spouse is unaware of the debt (eight percent); that it would damage the relationship (seven percent).
"Even if well-intentioned, withholding financial information from a spouse is not a sign of a healthy relationship, either emotional or financial," said Gail Cunningham, spokesperson for the NFCC. "It is encouraging that the majority, 76 percent, would share the information with their spouse so that they could work together to resolve the situation."
Even though having a discussion around money can be difficult, particularly if it is long overdue, it is a topic that ideally should be addressed early in a relationship, preferably before tying the knot. "People bring financial baggage into a relationship that they often don't deal with until there is a problem, making it challenging to have a constructive conversation," continued Cunningham.
To help facilitate a positive conversation about financial issues, the NFCC recommends the following Do's and Don'ts of a successful discussion:
Don't approach the subject in the heat of battle. Instead, set aside a time that is convenient and non-threatening for both parties.
Do make it a casual conversation about a serious subject, respecting the fact that each person has valid opinions and concerns.
Do be honest about your current financial situation. If things have gone south, continuing the same lifestyle that was possible before the change in income is simply unrealistic.
Do be open to adjusting your lifestyle. If spending cutbacks or second jobs are necessary, resist whining. It's likely that your situation will be temporary, and you could end up regretting the pity party you hosted.
Don't hide income or debt. This is known as financial infidelity. Instead, bring financial documents, including a recent credit report, pay stubs, bank statements, insurance policies, debts and investments to the table.
Don't point the finger of blame. That's a real conversation stopper.
Do probe to understand long-held financial attitudes, often present since childhood and ingrained by observing how parents addressed money issues.
Do acknowledge that one may be a saver and one a spender, understanding that there arebenefits to both mindsets and agreeing to learn from each other's tendencies.
Once everything is out in the open, it is time to make decisions about how to handle your finances in the future:
Do make a plan to deal with any skeletons that came out of the financial closet. Such surprises can greatly compromise your ability to obtain future credit opportunities. Now is the time to deal with them.
Do construct a new joint budget that includes savings. Emergency situations drop into your life at the most inopportune times. Without a rainy day fund, the financial hole becomes even deeper.
Do decide which person will be responsible for paying the monthly bills. It is likely that one person will be a good fit for this task, while the other finds it burdensome.
Do allow each person to have independence by setting aside money to be spent at his or her discretion.
Do decide upon short-term and long-term goals. It's ok to have individual goals, but you should have family goals, too.
Do talk about loaning money to family members and friends. Decide if it's something you're each comfortable with, or should be taboo.
Do talk about caring for your parents as they age, and how to appropriately plan for their financial needs, if necessary.
"Court records show that financial stress is one of the main causes of divorce. Taking action now could prevent a disaster later," commented Cunningham.
For professional assistance working through financial problems that have never been addressed, consider an appointment with a certified consumer credit counselor at an NFCC Member Agency. To be automatically connected to the Agency closest to you, dial (800) 388-2227, or to locate a counselor online go to www.DebtAdvice.org. For assistance in Spanish, dial (800) 682-9832.
The September poll question and results are as follows:
If I were experiencing financial difficulties, I
Would tell my spouse so that we could work together to resolve = 76%
Would not tell my spouse, as they have no idea about the debt = 8%
Would not tell my spouse, as it would worry them = 9%
Would not tell my spouse, as doing so would damage our relationship = 7%
Note: The NFCC's September Financial Literacy Opinion Index was conducted via the homepage of the NFCC Web site (www.DebtAdvice.org) from September 1 - 30, 2011 and was answered by 1,430 individuals.
The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation's largest and longest serving national nonprofit credit counseling organization. The NFCC's mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services. NFCC Members annually help over three million consumers through close to 800 community-based offices nationwide.
COLLECTION RIGHTS AND RESPONSIBILITIES
Piling new debt on top of old is never smart, but in today's economic environment, it's downright dangerous to accumulate debt you cannot readily repay. According to the NFCC's Financial Literacy Survey co-sponsored by MSN Money, roughly 15 million Americans are already receiving calls from collectors or considering filing for bankruptcy. Therefore, any new debt may be the final nail in the financial coffin.
Collectors also may become more aggressive in 2009. Consumers who are delinquent on accounts are likely to receive calls or letters from creditors sooner than in the past. Since money is tight, the creditors want to be first in line, thus enhancing their chance of being repaid.
Realizing that holiday bills are arriving, and millions of consumers may have accounts in collections with a third-party collector, or headed there, the NFCC wants to remind people of the protections afforded by the Fair Debt Collection Practices Act:
When can they call? - A debt collector may contact you in person, by mail, telephone, telegram, or fax. However, a debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree to such times.
Can they call me at work? - You may not be contacted at work by a debt collector if the collector knows that your employer disapproves of such contacts.
Can they harass me? A collector may not use threats of violence or harm, use obscene or profane language, or repeatedly use the telephone to annoy you. Further, they may not imply that you've committed a crime or will be arrested if you do not pay your debt, or pretend that they are an attorney or are a government representative if they are not.
Is there any way to get collection efforts to stop? - The consumer can stop all contact from the collector by writing a letter to the collector telling them to stop. Once the collector receives the letter, they may not contact you again except to say there will be no further contact, or to notify you that the debt collector or the creditor intends to take some specific action.
Can they tell others about my debt? - A debt collector may contact other people, but only to find out where you live, what your phone number is, and where you work. Typically, they may only contact a third party once, and in most cases, the collector may not tell anyone other than you and your attorney (if you have one) that you owe the debt.
What if I don't think I owe the debt? - You are entitled to a verification of the debt within five days of initial contact. This confirmation must be sent to you in writing and must include the amount of money you owe, the name of the creditor to whom you owe the debt, and provide you with options to take if you do not owe the money.
Can they continue to contact me after I dispute the debt? Collection efforts may not continue if, within 30 days after you receive the written notice, you send the collection agency a letter stating you do not owe the money. However, a collector can renew collection activities by providing you with proof of the debt.
Job loss and financial instability have forced many consumers into making tough choices when it comes to how they allocate their money. Such decisions can result in accounts going into collections. Even if this happens, the consumer deserves to be treated fairly, which is most often the case.
However, if a consumer comes in contact with a collector who crosses the line, the problem should be reported to their state Attorney General's office and the Federal Trade Commission. Abuses can result in fines for the collection agency, but equally important, reporting such violations can save others from being taken advantage of.
"What you must do in 2009
Make it a priority to pay off your credit card balances.
•Read every statement and all correspondence from your credit card company to make sure you are aware of any changes to your account, such as skyrocketing interest rates.
•Work to get your FICO credit score above 720.
•Be very careful where you turn to for help with credit card debt. Debt consolidators are often a very bad deal. The National Foundation for Credit Counseling is a smarter choice."
Suze Orman;excerpt from her book “Suze Orman's 2009 Action Plan"
Make it a priority to pay off your credit card balances.
•Read every statement and all correspondence from your credit card company to make sure you are aware of any changes to your account, such as skyrocketing interest rates.
•Work to get your FICO credit score above 720.
•Be very careful where you turn to for help with credit card debt. Debt consolidators are often a very bad deal. The National Foundation for Credit Counseling is a smarter choice."
Suze Orman;excerpt from her book “Suze Orman's 2009 Action Plan"
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575 E. Plumb Lane
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Fax: 775-322-2059
Reno, NV 89502
Toll free: 800-275-0137
FCS: 775-329-0623
CCCS: 775-322-6557
Fax: 775-322-2059
