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My mother is in serious financial debt she really needs a way to get back on track, can you help?
Hello, my mother is in serious financial debt. She owes about $6,000 and is behind on all of her bills right now. Most of it is non-credit debt and she really needs a way to get back on track. Currently she owns a home in Tampa and she rented it out but she still has $300 in mortgage that has to be paid off a month besides the rent that she has to pay where she lives now. Also, she cant sell the home because the terms on the mortgage say that she can re-sell for 2 years. She is a single mother and she still cares for my younger brother and sister. I would help if I could but I don't make enough. I am guessing debt consolidation is not an option here since it's not really credit card debt. Please help. I need some advice for her. Thank you.
Thanks for your question, and there are a few possible solutions. What you are referring to with your mortgage is a "pre-payment" penalty. She could sell or refinance, but she would be charged a sizable fee by her lender if she does this in under 2 years.
Given her debt load, it may make sense to try for either a reverse mortgage or for credit counseling. A reverse mortgage can pay her a portion of the equity in her home each month. I will describe credit counseling below:
Credit Counseling
Credit counseling, or signing up for a debt management plan, is a very common form of online debt consolidation. There are many companies offering online credit counseling, which is essentially a way to make one payment directly to the credit counseling agency, which then distributes that payment to your creditors. Most times, a credit counseling agency will be able to lower your monthly payments by getting interest rate concessions from your lenders or creditors. It is important to understand that in a credit counseling program, you are still repaying 100% of your debts ? but with lower monthly payments. On average, most online credit counseling programs take around five years. While most credit counseling programs do not impact your FICO score, being enrolled in a credit counseling debt management plan DOES show up on your credit report? and, unfortunately, many lenders look at enrollment in credit counseling akin to filing for Chapter 13 Bankruptcy ? or using a third party to re-organize your debts.
Bills.com makes it easy for you to apply, by following this link: https://www.bills.com/debthelp/debt/
I hope this information has helped you Find. Learn. Save!
Best,
Bill
www.bills.com
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Debt statistics
Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q1 2024 was $17.69 trillion. Housing debt totaled $12.82 trillion and non-housing debt was $4.88 trillion.
According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.
The amount of debt and debt in collections vary by state. For example, in Tennessee, 32% have any kind of debt in collections and the median debt in collections is $1892. Medical debt is common and 18% have that in collections. The median medical debt in collections is $888.
Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.
