Dealing with serious credit problems
Despite our best efforts, sometimes unforeseen events occur that seriously impair our ability to get out of debt and get ahead. Talk with your young adults about some of these potential events and how to go about repairing the situation.
Consider events such as:
- Unexpected illness or injury (be sure to have medical insurance).
- Car accident (always carry sufficient car insurance).
- Losing your job (try to have several months' pay in savings).
- Unable to pay bills (always contact creditors before you fall behind; they'd rather work out a payment plan than have you default).
Also let your teens know that if they think they're falling seriously behind, credit counseling resources are available. The National Foundation for Credit Counseling (www.nfcc.org) is a national non-profit counseling network whose members help people deal with stressful financial situations. The Federal Trade Commission (www.ftc.gov/bcp/menus/consumer/credit/debt.shtm) also offers instructions on how to repair your credit, as well as information on scams to avoid, such as so-called "credit-repair clinics".