Credit counseling experts, financial planners run free call-in

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Oct 15, 2009 (The Akron Beacon Journal - McClatchy-Tribune Information Services via COMTEX) -- CSCRA | Quote | Chart | News | PowerRating -- Calls fielded by credit counselors and financial planners on Wednesday night were a mix of questions about investments, how to handle debt and savings issues. The majority of the subjects covered were about how to handle tight finances.

Volunteer experts answered calls as part of a free financial call-in, sponsored by the Beacon Journal, Consumer Credit Counseling Service of Northeastern Ohio and the Financial Planners Association of Northern Ohio.

Another free call-in will be 10 a.m. to noon Saturday. Callers can phone 330-996-3644 during that time.

Victor Russell, regional manager for the Consumer Credit Counseling Services of Northeastern Ohio (CCCS), took a call from a distraught middle-aged, single mother who said she was getting paid on Friday and had her car and house payments due as well as a stack of credit-card and utility bills.

"She didn't know what to pay first," he said.

Russell suggested she call her utility companies to ask for utility assistance and find out what programs she might qualify for. He also suggested calling the "loss mitigation department" of her mortgage company, not the collection department, to see if she could make other arrangements or modify the loan.

Russell said the woman said she was ready to go into a corner and not pay the bills.

Russell said he also told the woman about the CCCS services, which offer a free 11/2-hour consultation, by calling 800-355-2227.

Terri Campanelli, outreach director for the CCCS, took a call from a 55-year old woman who said she and her husband owed 27 more years on their home that they'd lived in for 32 years after they refinanced, her husband lost his job, had medical issues and then spent some time in jail.

"While she was trying to rob Peter to pay Paul, in her words, they were $100,000 in credit-card debt," Campanelli said.

The woman asked if she declared bankruptcy and agreed to make payments on her house and cars, could she keep them?

Campanelli said there was a possibility she could keep the house and cars, if she reaffirmed those debts, but told her about the negative aspects of bankruptcy.

"Bankruptcy does follow you for 10 years," she said.

Ted Sadar, a certified financial planner with Sadar Financial Management in Akron, took a call from a single woman who sounded as if she recently took a buyout or early retirement from her job. She said she would be getting 60 percent of her income and wanted to know how she should budget. She also had a first and second mortgage on her house at 10 percent, but hadn't been able to find anyone to refinance her loans.

Sadar suggested the woman begin tracking expenses and continue to think about the differences between "needs" and "wants." He also suggested that she look for a part-time job to earn some extra money to shore up the difference.

Darrell Claytor, a certified financial planner with Securities America Inc. of Twinsburg, took a call from an 84-year-old man who had a large number of "I-bonds," which are designed to earn interest and protect the holder from inflation.

However, I-bonds right now have a 0 percent interest rate.

The man told Claytor that he decided after having them for a few years, he was going to be better off paying the taxable income on the bonds and reinvesting the money. He asked Claytor whether he thought interest rates might be going up.

Claytor said it was unlikely and that he might be better off paying the taxes and reinvesting them in one- to two-year CDs.

Jay Seaton, area president of the CCCS, talked to a woman who started a new job in the spring and was working hard on paying off all her credit-card debt by December of January. But she wondered whether she should use all of her extra money to pay off her debt, at the expense of not joining her company's 401(k) plan.

Seaton asked the woman whether there was an employer match to the 401(k) program. There was.

He told her she'd do well to start now on her 401(k) plan -- perhaps splitting her extra money up by 75 percent toward credit-card debt and 25 percent toward the 401(k) plan.

"There's free money involved and compounding," Seaton said of the 401(k) investment.

"It was an 'either-or' for her and I told her it doesn't have to be," he said. The woman had an additional part-time job and was going to take that money and use it toward the credit-card debt also.

"She was convincing herself as we spoke," said Seaton. "It was nice to be able to talk to someone without a crushing amount of debt," he said.

The Counselors

The following volunteered their time for Beacon Journal readers during a free financial call-in session Wednesday night:

From the Consumer Credit Counseling Services of Northeastern Ohio:

Terri Campanelli, community outreach director

Victor L. Russell, regional manager

Jay Seaton, area president

From the Financial Planning Association of Northeast Ohio:

Darrell C. Claytor, CFP, Securities America Inc., Twinsburg

David W. Demming, CFP, Demming Financial Services Corp., Aurora

Ted Sadar, CFP, Sadar Financial Management, Akron

Brent R. Steiner, CFP, Ramsier Financial Services Inc., Smithville

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