Q. My husband and I are retired on a small pension and Social Security. We have a home-equity loan for about $30,000 (no mortgage) and almost $50,000 in credit-card debt. We were living beyond our means, and we're now in a terrible fix. We have not missed any payments, but our savings are almost gone. Our home is worth about $140,000 in today's depressed market. We don't want to lose our home or our good credit score. If we could cut our monthly payments by about $300, we could stay out of bankruptcy. Please help!
A. I'm glad you got to me before you got behind on your bills or filed for bankruptcy. Even with a tight credit market, I feel certain that you can obtain a new mortgage to kill off the debts and have a single monthly payment. Your credit is still OK, so that will give you a very favorable interest rate, especially when compared with those credit cards and the home-equity debt. Without details on your interest rates and minimum payments, I can only make an educated guess that you'll save quite a bit more than the $300 and be able to go forward without those sleepless nights and hits on your savings. Don't delay, because interest rates are now at the lowest in my memory.