Dear Harry

: About two months ago, our van was broken into and $1,400 worth of stock was stolen. I contacted our car-insurance company, and I was told that we were not covered for theft of items in the car. I then called our apartment manager to see if their insurance covered our loss. I was very rudely told that they were not covered for such losses. He wouldn't even give me the name of the insurance company so I could see for myself. How can a complex as large as ours (800 units) not be insured for such losses? I have made a police report, and I have a detailed list of what was stolen. Don't I have some recourse?

What Harry says: You're looking in the wrong place. Your renter's insurance on the contents of your apartment very likely covers such losses. There could very well be a limit of $1,000, however. There is one additional step that you can take. Capital stock should have your name on it as the registered owner. Contact the company's transfer agent, and give that company the details. That will be enough to stop the fraudulent transfer of the stock to someone else. They will then issue you new stock upon receipt of a bond from you to protect them from a possible suit later. The cost of the bond is nominal.

Dear Harry: I'm 67, and I just retired. I have an annuity that I want to tap for a lifetime of income. That, plus my SS, will be more than enough to carry me. I was an only child, and I have no near relatives that I would want to leave an inheritance. The company is offering me a one-shot chance to change my payments to an inflation-indexed series of payments that are tied to the Consumer Price Index. This will mean a reduction of the proposed fixed annuity of approximately 13 percent for the first year. This won't be too much of a cutback for me to continue my present lifestyle, and inflation is a real worry for me. Does this sound like an OK deal for me?

What Harry says: It looks pretty good in your case. However, you should look into the possible direct transfer to another insurance company and at least one of the mutual funds offering inflation-indexed annuities. You'll be able to make a tax-free transfer if you find a better deal elsewhere.

Dear Harry: I want to add my voice against the use of debit cards. I bought a small TV at one of the large chain stores, and I used my debit card. The store's computer was malfunctioning, so everything was done by hand. My statement came through with a charge $849 instead of $449. I immediately protested by following the procedures printed on my contract with the bank. It's now two weeks after I protested, and the extra $400 is still not back in my bank account. When I use a credit card and something goes wrong, my bank account isn't touched. Fortunately, I have enough in the bank account to cover the shortfall, but something like this could be devastating to someone who keeps a minimum balance in his checking account. Please advise your readers to cut up any debit cards and refuse the offer of any new ones. And I just found out that I only get half the frequent-flier miles that I get on my credit card.

What Harry says: I have written numerous times about the disadvantages of debit cards. If you can qualify for a credit card, steer clear of the debit cards. They're good for the banks and the merchants, but not for you. Thanks for your input.

Dear Harry: My wife is very ill, and her prognosis is bad. We're trying to get things in order as best we can before the time comes. She has a will, which is satisfactory to both of us. She also has a rather substantial IRA, which leaves 40 percent to me and 30 percent to each of our two children. We were told to separate her present IRA into three pieces in order to enable me to make a direct rollover of my 40 percent to my own IRA. In her present condition, it would be a tremendous burden for her to do this. If we make no changes, how will this affect my ability to roll my share over to my own IRA?

What Harry says: I can see why you were advised to split the IRA. A spouse can roll over an inherited IRA when he/she is the sole beneficiary of the IRA. However, you are the sole beneficiary of your share of her IRA according to the regulations. So long as the IRA is split upon her death, you may make that direct rollover to your own IRA. I prefer a direct custodian to custodian transfer, although you can withdraw your 40 percent and roll it over within 60 days. The reason I prefer the direct transfer is that too many things can happen that will make you miss the deadline. That will give you a monstrous tax headache. Your children should take their shares and title them as inherited IRAs separate from any of their own. That way, they can each use their own life expectancies to make required withdrawals. The time limit for them is Dec. 31 of the year following the year of her death.

Dear Harry: I bought a home in Upper Darby back in 2003. I have a fixed-rate mortgage. The monthly payment includes interest, principal, and an escrow amount for taxes and homeowner's insurance. I have never been late with a payment. During my ownership, there have been eight tax bills and four insurance bills paid from the escrow account. Unfortunately, they have mishandled the payments on two tax bills and one insurance bill which were paid with the wrong amount in spite of my sending them a letter with the bills, which repeated the correct amounts. Further, one of the insurance bills got "misfiled" and would not have been paid if I had not notified them. I am terribly frustrated by all this, but I'm deeply concerned about the possible consequences of their failure to pay an insurance bill. If they fail to pay a tax bill, there can only be a penalty, but failure to pay the insurance bill will result in my coverage being dropped. I have formally requested that the bank close the escrow account and allow me to pay the taxes and insurance directly. I was told that if approved, I'd get hit with a .25 percent increase in my interest rate. This sounds stupid. I'm relieving them of a service that they performed poorly, and they want to charge me for the privilege! How unfair can they get?

What Harry says: When the lenders use an escrow account, it gives them the opportunity to make sure that the taxes and insurance are paid. If they rely on the homeowners, they have to keep after many to make sure those items are paid. Remember, unpaid taxes result in a lien that is ahead of the lender's lien. If the insurance is canceled, they could be left with bare ground as security for their loan. If you had asked for the privilege of no escrow at the time of the settlement, you would undoubtedly have been hit for the extra .25 percent on the mortgage from day one. In view of the fact that they handled things so poorly, you might be able to get an exception on the interest rate. Several readers under similar circumstances have been able to do this in New Jersey by contacting the banking department for their help. Try the Pennsylvania Department of Banking (1-800- BANKS) and your state representative for help. Good luck!.

Dear Harry: I believe that when you settle with a creditor for less than the full amount of the debt, the creditor is required to issue a Form 1099-C so you can report the difference as income. However, I just read that as part of the settlement agreement, you can request that the creditor not issue the form. Is this so?

What Harry says: You can request what you like, but unless you were insolvent both before and after the settlement, the saving is taxable income. This is so whether or not you get a 1099-C. *

Write Harry Gross c/o the Daily News, Box 7788, Philadelphia, PA 19101. Harry urges all his readers to give blood - contact the American Red Cross at 800-GIVE LIFE.