It’s Your Money Column – Making Power Payments on Consumer Debts

Reduced income from a job loss is challenging when loan payments are coming due. Laurel Kubin at the Larimer County Extension Office uses a software program, PowerPay, to help individuals decide how to best handle loan payments. You can contact her at 498-6000 to find out more.

PowerPay was created by Cooperative Extension professionals at Utah State University. This computer program shows the impact of making "power payments" on consumer debts. In just a few minutes, a consumer can compare several ways of trimming credit costs.

Initially, PowerPay calculates the repayment time and interest costs if payments are made at current levels. It is shocking for most consumers to see the interest costs and length of time it takes to repay debts, especially if they’re making only the minimum required payment. People using PowerPay can explore possible savings from consolidating some or all the debts. PowerPay is a powerful tool to help people make decisions about trimming their debt repayments.

Laurel suggests that you take the offensive and contact your creditors right away to talk about revising your repayment schedule. Don’t wait until they have to call you. When you call a creditor, have the following information ready: account number, reasons why you would like to renegotiate your payment and how much you propose to pay until you get back on your feet.

Be sure and keep a record of all of your calls and correspondence with your creditors. This will help you keep track of what your creditor has agreed to and protect you if your creditor forgets your previous conversations.

Another source of debt repayment help is the Consumer Credit Counseling Service, or CCCS, of Northern Colorado and Southeast Wyoming. They offer financial and housing counseling. You can reach them at 229-0695.

There are other credit counseling services, but make sure you are working with a legitimate company such as the CCCS of Northern Colorado. They will send you information about their programs before you sign up. They also will provide educational materials and answer your questions without payment of large fees.

You don’t have to handle this alone. Don’t ignore your bills. Instead, seek help from a source that can help you determine what to do next.

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Judy McKenna, Ph.D., CFP, Family Economics Specialist, Colorado State University Cooperative Extension,