Editorial Policy

Key to Financial Independence is Helping Yourself

Erica Sandberg

January 4, 2013

QDear Erica,

I started with credit counseling at ClearPoint about a year ago. It was OK, but then after some months I had to stop. I could not afford the payments anymore because my boyfriend stopped helping with all my bills. When I started counseling, I had a total of five cards from assorted credit card companies. Two were already blocked due to nonpayment, so I closed the other three. Now I’m in bigger trouble than before with no credit cards, bad credit and people calling me day and night. I’m embarrassed to call my counselor, and my mom said she won’t help me any more either. Please tell me what to do now. — Heather

AHi Heather,

Do not for a moment be ashamed or frightened to contact the credit counselor who worked with you to set up your original debt repayment plan. As with all credit counseling agencies, ClearPoint is more than familiar with clients who struggle with and then drop out of the arrangement. They would welcome a call from you.Ask Erica

Of course, I would like to help you as well, but my assistance will come more in the form of motivation. You must take firm control over your money and credit future. Declare your financial independence, Heather. No more leaning on other people to cover your expenses or to fix the mistakes you made. It should be obvious by now that you cannot control what another person does. People break promises all the time, and when that happens, it can leave you in a terribly precarious position.

Here’s how you can get out of the hole for now and for good.

Swallow your pride, pick up the phone and request another credit counseling appointment. While the agency you worked with may not be able to reduce the amount you need to send to your creditors, they’re already intimately familiar with your situation. Ask for a second session, and ask for suggestions to resolve your troubles. That’s what they are there for.

In the meantime, what you need to do is make sure you have enough money coming in to cover what’s going out. You must have developed a budget with ClearPoint, so if you still have that paperwork, dig it out and review the numbers.

Write down what you take home monthly — and exclude your boyfriend’s contributions. Then list every essential expense you have. If there’s enough to cover those, fabulous. If not, you’ve got to earn more money. Working more or acquiring a better-paying job will be your No. 1 priority.

When you do have more than enough income to meet your critical bills and have some left over, parcel the remaining funds to those you owe. If you can’t do so by jumping back on the credit counseling plan (most allow you to give it another shot), contact the creditors individually and let them know you’d like to pay what you can until you are earning more. You may be able to fend off a lawsuit by doing this.

While you are paying your debts down, your credit rating will go up. When they’re all at zero, you can reapply for credit cards, and you should be able to get at least a secured account.

Ultimately, reaching out to a credit counseling agency when you need help is great — they provide professional guidance, much like a tax adviser or stockbroker does. However, when you’re an adult, relying on a boyfriend or parent for financial support is too risky. You want to be dependable — not dependent.

Got a question for Erica? Send her an email.