Dear Money Mom

Dear Money Mom,

You have good advice for people who have time to organize and money to budget, but things are hard right now. What do I do if I can’t pay my bills?

Sincerely,
Hoping for More

Dear Hoping,

Life is about relationships, and bills are no different. Unpaid bills are just agreements you are having a hard time keeping. If this is the case, communicate. Make new agreements. Don’t just let payments slide. Call every one of the people you can’t pay, and be in relationship with them.

1. Tell them you can’t make the payment and ask them what would be acceptable as a reduced amount.

2. Gather the same information from each entity you owe. Then put these amounts into your budget. See what adjusted payments you can handle, and call them all back to let them know what you agree to pay.

3. Take notes from the calls. Put the names of the Customer Service Reps in writing and email, or mail a reply that re-states the new agreement.

Honoring agreements goes a long way in a relationship. Remember that your own integrity will make you feel better, will make you a valued customer, and will help you stretch your financial muscle.

Dear Money Mom,

Like a lot of people, we are upside down on our house. We are having a hard time making ends meet. Do you have any suggestions?

From,
Cali Mom

Dear Cali Mom,

Yes. Reduce your property taxes. Contact the county assessors office and ask them to reassess your home if you believe its value has gone down since the time you purchased it. If you purchased between 2003 and 2008, there is a good chance this will work for you. There is no charge for the reassessment, and it could reduce your monthly payment substantially. Depending on where you live, paying $50 to $100 less in bills per month makes a big difference. Even greater decreases can be expected from homes in some areas.
Another new option is that every mortgage company received money from the new government mortgage modification plan. Many banks have been absorbed by other banks, and some are offering aggressive loan modifications. Contact your bank or lender and ask what kind of packages they are offering homeowners in your position.

Keep your eyes and ears open and stay in communication with your lender and others around you. Make online searches and ask friends and neighbors what they are doing to stay present with what their homes are worth. What is quite possibly a gift of the mortgage “crisis” is that so many are affected, we are living it in community. Creative options can come from right from your own neighborhood, if you’re willing to talk about them.