How to conserve your credit during these shaky times

By Charla Young - bio | email     
Posted by Charles Gazaway - email

LOUISVILLE, KY (WAVE) - It is easy to feel like you have no way out in this tough economy.  Unemployment is at an all-time high. Foreclosures are through the roof and the dollar just doesn't stretch as far these days. I want to share the thoughts of one Louisville man whose story may sound familiar.
We are seeing the Dow's ups and downs, failing banks and home foreclosures in full swing, but the government is not calling it a recession yet. For Ron Marshall, his life has gone from recession to depression in just one year.
"I was working every day. I didn't have any problems with my health that I knew of and then all of a sudden - quadruple bypass and heart valve replacement," says Ron.

That is when his life came tumbling down. He lost his good health and is now forced to take 14 pills a day. He eventually lost his job as an auto assembly line worker in Kentucky. Finding another job is not an easy task, especially for someone who is 60-years old.

"Nobody wants to train somebody who can work for six or seven years then you have to retrain somebody after that," says Ron.

Ron's story is the story of many Americans left unemployed in a tough economy. When he lost his job, he lost his employee insurance coverage.

"I was paying $109 a month at work when I was working for my wife and myself. When I lost my job, I had 60 days to convert to COBRA," said Ron.

His medical insurance jumped to almost $800 a month. Just a few days ago, it jumped again to $1,044. That's something Ron says is not affordable.
"It's a Catch 22 situation cause if you don't have this, then everything you've got that you worked for is gone," Ron says.

Because Ron had no job, his mortgage company would not renegotiate his home loan. He tried to terminate the lease on his car, but the company said no. Ron says no one is willing to help.
"They have the opinion that you're just beating your head up against the wall," he said.

I looked into Ron's case and found out there are options available for people like him who are desperately trying to stay afloat and save what they've worked so hard for all their lives.

As part of that $700-billion rescue plan passed by Congress, the government's working on a plan to help struggling homeowners avoid foreclosure. In addition, credit counselors tell me mortgage companies are willing to work with their customers more than ever before.

"Loan modifications are a new option from mortgage servicers. This is where mortgage companies are willing to put the amount in arrearages to the end of the mortgage and make the payments affordable," said Mary Fallon Jackey of Consumer Credit Counseling Services.

This option is available now before your home is in foreclosure. Credit card companies are also willing to negotiate your debt.

"Credit card companies are offering reduced interest, skip a payment. I know skip a payments are very popular for the months of December and January," Jackey said.

By requesting an internal hardship, your payments can most often be deferred. Your status will be made current and late fees can be waived. The only provision is that your account has to be delinquent.

There are also similar options available with auto loans. At least one payment can be deferred every 12 months.

Ron tells WAVE 3 he is just trying to stay afloat and plans to schedule an appointment with a credit counselor. He says his credit is excellent credit and he wants to keep it that way. But with everything going on at the same time, he knows he can't possibly make the next step alone.