Archive for the ‘In Crisis Mode? Start Here…’ Category

Freshly Unemployed? Start Here

Well, actually, start with the new Resources section, and look for the article with the same title: Freshly Unemployed? Start Here. Really.

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NY Times: Rebuilding Your Credit

You know the Great Recession isn’t over when the New York Times’s personal finance column offers advice on rebuilding your credit (score) after a job loss, foreclosure, large medical bill, or other financial disaster.

bank imageThe article, “Healing a Wounded Credit Score,” has a lot of good advice, but lots of warnings too – and be sure to heed those warnings. For example, the main suggestion for rebuilding your credit is to get a secured credit card. Well, it turns out that (1) you have to put up a deposit equal to the credit limit on the card; and (2) like any other card, you pay interest on the unpaid balance. In essence, you are paying interest on money you already have.

The only reason you’d want to do that is to repair your credit rating, by having your (good) payment record reported to the credit agencies.

But some of the banks and companies that issue secured credit cards might charge a fee – against the card it just issued to you – equal to the amount you have put up for deposit. Say you put up a deposit of $1,000. Your card would have a $1,000 credit limit. But if the bank charged this fee, your card would start out with a balance of $1,000 – owed to the bank that gave you the card. There ought to be a law against that one.

Also, according to this article, some banks do not report your (good) payment record to the credit report service – defeating the whole purpose of getting the card in the first place.

Most banks charge an annual fee of $35 or more for the privilege of charging you interest on your own money, and most do not pay you interest on the amount you’ve put up for deposit.

There is one more reason to get a secured credit card: if the alternative is no credit card at all. These days, a credit card is imperative, even if you pay it off each month. Traveler’s checks are becoming extinct; you need a credit card for most online purchases; and a card has always been required to reserve a hotel room or a flight, and for car rentals.

But if you go this route, read the fine print very carefully.

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One-Stop Career Centers: A Wealth of Resources

Today I stopped at the One-Stop Career Center. These centers are nationwide – you can search for a One-Stop Career Center near you – and seem to provide a multitude of services, from job searches and resume help, including computer use, to business assistance like the SCORE workshops. They are helpful resources for the job search, worth seeking out.

CareerOneStop logo

But as I looked at the dozens of flyers near the entrance, I realized that many of these career centers have similar offerings, so I looked a little closer. I found a wealth of free and low-cost resources for all kinds of services including comprehensive lists for the following:

  • Food banks
  • Low-income and senior housing
  • Adult school
  • Thrift shops
  • Online job boards
  • Emergency shelter
  • Free after-school program
  • Free Community Bus for rides to doctor’s appointments, etc.
  • Consumer Information Catalog from the Federal Citizen Information Center, which offers informational brochures on all kinds of things – job searches, food safety, car buying, federal programs, you name it – most of which are free or very low cost, and most of which can be found online as well

There was even a flyer for a truck-driving school for the price of licensing fees totaling $227 – the usual cost is ten times that much – though I still have to check that one out.

It seems that each One-Stop Career Center is run by a local nonprofit, partnering with the federal government and local government and nonprofit agencies, so this center might have more resources than most. But the centers – and any other community services facility such as libraries – are worth checking out to see if they have a wealth of resources too.

image of money

Speaking of libraries, an online search for “hard times” – as in New Hard Times – turned up the State of Washington Library’s Hard Times Resources page for people out of work. Lots of info here too, much of it online, for Washington citizens and anyone else in the United States.

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Advice from Foreclosure Ground Zero

Foreclosure sign

Foreclosure sign

A new, local PBS-produced program offers advice to homeowners who are facing foreclosure. The show’s goal is to help those who are suffering right now under the weight of a mortgage they can’t afford, and can’t get rid of – and to those who desperately want to keep their homes.

Here’s the Web site for the show, with in-depth interviews on video and in words, plus lots of resources:
KVIE Channel 6: Facing the Mortgage Crisis

Many of the resources are local to the Sacramento/Stockton area  – Stockton being the #5 hardest hit area in the country, down from #1 last year – but some might be a local branch of a national organization. (There is also a link to HUD’s Guide to Avoiding Foreclosure, which I have posted here before.)

The big lesson: Do not pay someone who says they can lower your mortgage payment! Most likely, it’s a scam. Even if the company legitimate, they can’t and won’t offer any guarantees that your lender will agree to a modification at all, much less at a payment you can afford.

The next biggest lesson: Don’t wait! As soon as you realize you’re in trouble, get help! Above all – scary as it is – open your mail and pay attention to all notices related to your mortgage.

The bad news: Hardly any lenders or servicers are willing to modify mortgages to more affordable payments, even though many mortgages are for much more than the homes are now worth. The “why” of that was not made clear, but I have read elsewhere that many servicers are actually paid more if they collect on ongoing delinquent loans than they would if they modified the loan. It makes no sense, but for now, that’s the way it is.

The good news: There are a lot of trustworthy, nonprofit organizations who are there to help you get through the bureaucratic maze.

So yourself together, gather your paperwork, and take action! And if you aren’t in crisis but you know someone who is, help as much as you possibly can, even if all you can give is moral support and a shoulder to cry on. Don’t let them suffer alone, in isolation. This is what it means to help each other through this crisis. It’s the only way we’re going to get through it.

And if you aren’t touched personally by the foreclosure crisis, work for political change, by advocating and campaigning to force lenders to modify troubled loans, for all borrowers whose incomes could manage the new payments, whenever the cost of modifying would be the same or less than foreclosing. And make them fixed-interest loans!

It should be as simple as that.

Californians: How to Apply for Unemployment

If you live in California and you recently lost your job, you might qualify for unemployment. Even if you think you don’t qualify, apply anyway.

The state Employment Development Department just posted a video on how to apply for unemployment, which you can view here.

Credit / Bankruptcy / Housing Counseling

The nonprofit National Foundation for Credit Counseling can provide immediate help for credit cards management and delinquency, bankruptcy, and foreclosure. It also has a list of counseling locations throughout the country.

http://www.nfcc.org

HUD Guide to Avoiding Foreclosure

Whether you’re just beginning to get worried, are about to lose your home, or are anywhere in between, the U.S. Dept. of Housing and Urban Development has information and resources for you, including referrals to a local “forclosure avoidance” counselor.

http://www.hud.gov/foreclosure/index.cfm

The sooner you make the call, the better.