money-wise women need to know
reeta bochner wolfsohn, cmsw

If you have financial problems you are not alone.

More bankruptcies than ever were filed last year. Mortgages in foreclosure also reached a new record in the last quarter of 2002, as did credit card delinquencies.

As mortgage rates declined over the past year, Americans have tried solving their financial problems by borrowing against their homes or refinancing their mortgages. Many used the proceeds to maintain or to increase their spending, or to pay off credit card debt.

Paying off credit card debt makes sense because credit card interest rates can be as much as three or four times greater than the refinance or home equity interest rate. Refinancing and home equity loans also provide tax advantages. Unfortunately, the good news about interest rates, lowering mortgage payments and paying of credit card debt can turn to bad news when the money isn’t used wisely.

Fixing up the home, buying a new car or paying for a wedding or a vacation, rather than paying down debt, may be good for the economy, but most often these aren’t the best choices for consumers. This is because in difficult economic times as we are currently experiencing, real estate values can decrease, unemployment can increase and retirement funding is often reduced when workers are having difficulty staying current with their expenses.

Not staying current with mortgage and debt payments threatens every homeowner’s economic self-sufficiency. If you are unable to make a payment, contact your bank or credit card company, and ask if they will work with you. If you fall behind on mortgage and debt payments you could eventually find yourself having to consider credit counseling, bankruptcy or foreclosure. These options provide some help, but they also have long-term repercussions.

To further complicate things, on March 19, 2003, the House voted overwhelmingly to make it more difficult to file for bankruptcy. This bill, supported by banks and credit card companies dissatisfied with all of the write offs they have had to take, will make it even more difficult for struggling consumers to find relief from their financial problems.

If you have credit card debt, do everything you can to reduce and to eliminate it. If you are considering filing for bankruptcy, meet with a bankruptcy attorney as soon as possible, so that you can learn what you need to know to make the best decision for your situation.

Stay focused on your financial situation. Help is available. The sooner you access it, the sooner you can begin to take control of your money, gain control of your life and create your own happily ever after.