Bruce Williams
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DEAR BRUCE: My daughter got married two years ago. I charged the whole wedding on a credit card, about $15,000. She promised to make the payments until the balance was paid off, but I am lucky if I have seen $5,000 of it. Now I am struggling to pay the $300 a month payment, and I am thinking about just not paying the card at all. I know it will hurt my credit, which right now is at 769. I am working two jobs to pay it, and I just can't do it anymore. Is there any other way? I have called the card, and they can't do anything more. If I do stop paying, what will happen? I am almost 50 years old and I have no other help. — C.R., via e-mail
DEAR C.R.: My heart goes out to you. You, like many parents, have done what you could have for an adult child and are taking it right in the neck. It was easy for her to promise to pay, but the reality is she doesn't look like she's going to fulfill that promise. I know of absolutely no way that you will be able to get a better deal. As long as the payments are up to date, there is nothing to persuade the credit card company to cut you a break. If you do stop paying, they will probably move against you with a suit, and you can kiss your good credit score goodbye. That is not the more important part of this equation. If you have other assets and you attempt to go bankrupt, the courts will insist, in most cases, that you convert them to cash to reduce your obligations. This may be a rhetorical question, but have you made an effort to impress upon your daughter what an untenable position she has put you in? If she is still married, she and her husband should be able to scrape up $300 a month even if it means two jobs for them. In the absence of that, you probably would be best advised to at least consult with a bankruptcy attorney.
DEAR BRUCE: Due to the economy and stock market, I have decided that I would like to invest in gold, but I don't really know where to start. I'm not talking about gold stock, but actual gold. I want to be careful as to what to get and how to get it. I'm talking maybe $1,000 to $5,000 to get started. I'm not sure what information to pass on to you on this subject but would appreciate any advice you would be willing to give. — R.W., via e-mail
DEAR R.W.: When one is talking about gold, it is an extraordinary volatile proposition. It has increased roughly $150 an ounce in a very short period of time. I don't think that one can conclude that this is going to happen again. The point is, I have never thought of gold as an investment. It is a speculation. It pays no interest or dividends, and you have to have a safe place to keep it. If you are going to buy gold, there are many reliable dealers, many of which advertise in financial journals. Find out what type of a premium they are asking for. You would probably be best advised to buy coins. American, Canadian, Mexican, South African coins are all easy to buy, easy to sell and, unlike bars, don't have to be assayed for each sale. Just understand that the only way you can make money on gold is if it actually appreciates in price. Not necessarily appropriate for most people.
DEAR BRUCE: My husband has received several letters from his union. They expect the plan to run out of money and will become "insolvent" sometime during 2009. His pension was $1,401.34. After the first cut, he now gets $1,083.54. We have received another letter stating the next cut will bring his monthly benefit to $631.67. Do we have any recourse? We don't have any extra money for an attorney. — Karen, via e-mail
DEAR K.O.: I wish I had something positive to say, but, unfortunately, even if there were financial shenanigans involving the union (I'm not suggesting that), unhappily, the union did not have enough money in reserve taking into account the current recession. It seems they've been trying to stretch it out by lowering the benefits to all of its members. If the market really improves, it's possible that the insolvency will be avoided. In the absence of that, I'm afraid you're out of luck, joining a great many other people with similar problems.
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Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).
