By John Napolitano, Financial Planning Association of Massachusetts

John Napolitano is president of the Financial Planning Association of Massachusetts and chief executive of US Wealth Management. He will be hosting a live Boston.com chat on Friday, Nov. 9 at 3 p.m.

We all eventually clean out a closet or basement, and find things that you forgot about and deem useful or valuable. From a financial perspective, the same process may also yield unexpected treasures. Living proof of this is your home state's unclaimed property list. In my home state of Massachusetts, it is estimated that one in 10 residents has unclaimed property.

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John P. Napolitano, the chief executive of US Wealth Management, will take your money questions live Tuesday, Oct. 30 at 1 p.m.

Keeping up with all the shopping discounts on the web and in your favorite stores can be a challenge. But what if you had a mini personal shopper that sits in the palm of your hand to help remind you that your favorite pair of shoes is now discounted and just a click away? Buzz 60's Priya Desai takes a look at the apps and websites to help you save some cash.

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The number of people taking on student loans keeps rising. Considering the economy, that fact alone shouldn't be surprising. But a new study released by the Pew Research Center finds that a staggering nearly 1 in 5 homes has student debt -- a number that won't be shrinking any time soon.

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By Christina Reinwald, Boston.com correspondent

How do you keep track of your financial information? Mint.com wants to help you improve it by importing your finances online. Stacy Rapacon, channel editor for personal finance website Kiplinger.com, said Mint.com offers the best overall online budgeting. What makes it even better? It’s free.

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Lots of people have life insurance (and that is certainly a good thing...) but very few people carry disability insurance. A recent study by Northwestern Mutual indicated that just 10 percent of people over age 21 have purchased a disability policy.

That statistic is pretty surprising since the average adult much more likely to suffer a disability than to die. According to the Social Security Administration, three out of every 10 workers entering the workforce will become disabled at some point in their careers.

And this disability can have a huge impact on how well prepared a person is for retirement. Another report from Northwestern Mutual shows that over $1M in retirement assets can be loss if a 50 year old suffers a two year disability and does not have disability insurance. The same person with disability coverage loses much less -- only about $230,000.

So, what is the best way to get disability insurance? Most larger employers offer short and long term disability coverage to their employees and they offer (generally) very affordable rates. If your employer offers this coverage, you should strongly consider it and be sure to ask if you have the option to pay the premium with before tax or after tax dollars. It might seem like paying the premium with before tax dollars is the way to go but it is actually better to pay with after tax dollars. If you pay with after tax dollars, any benefit you may receive in the future will be tax free. If you paid the premiums with before tax dollars, any benefit would be taxable.

If you are self employed or want to get an individual policy, you should expect to pay significantly higher premiums.

Are funds in my 401(k) plan and Roth IRA protected in bankruptcy?

When filing for Chapter 7 bankruptcy - also referred to as personal bankruptcy, a debtor's property is classified as exempt or non-exempt. Exempt property is considered protected in bankruptcy because the debtor can keep these assets. Non-exempt property is property that can be used to pay creditors.

Under federal law, funds in your 401(k) are exempt from Chapter 7 bankruptcy, however, Traditional IRA and Roth IRA accounts are only partially exempt. As of April 1, 2010, funds in Traditional IRAs and Roth IRAs are protected up to $1,171,650. This exemption amount does not apply to certain funds that were rolled over into your Traditional IRA or Roth IRA accounts. Other retirement plans that are exempt for federal purposes include 403(b) accounts and Section 457 plan accounts.

In addition to the exemptions provided under federal law, many states have bankruptcy laws that also provide protection for a debtor's property. Some states will allow you to choose between the federal exemptions and the state exemptions. Other exemptions include certain amounts for your homestead and educational savings accounts.

For a number of years, if you had student loans and went to work in the public service sector, you could have some or all of your federal student loans forgiven.  Last year, that program was expanded and now, just about anyone can qualify. 

A recent Wall Street Journal article does a great job of summarizing all of the particulars but basically, anyone with federal student loans could be eligible for help as long as they meet certain income limits.  Under the new rules, the amount you are required to pay in student loans is capped at 15 percent of your income and if you still owe money on your loans after 25 years, the remaining balance is forgiven.  If you work in the public service sector, your loans would be forgiven after 10 years. 

And, in 2014, the program gets even more generous.  In that year, the re-payment cap is lowered to just 10 percent of income with all debt forgiven after 20 years. 

These programs apply to loans incurred by undergrads and graduate students but it is important to note that only government loans are included in the program.  Any private loans that you might take out are excluded from the program.  For more information on qualifying for this program, talk to your lender.

If you reduce your credit utilization from approximately 65 percent to 38 percent should that significantly improve your FICO score?

Yes, reducing your credit utilization ratio should improve your credit score but it is difficult to know exactly how much your score will improve because of the many factors used in calculating your FICO score. Credit utilization is the ratio that measures the amount of credit you are using over the amount of credit you have available. It is measured for your credit cards individually as well as in total, across all of your credit cards.

According to the creators of the FICO score, Fair Isaac Corporation, credit scores are calculated with credit data from five categories including payment history, amounts owed, length of credit history, new credit, and types of credit used. The importance of each category (in the calculation of one's FICO score) differs for different people because of their credit history. For example, the "Length of Credit History" category is less important and has less of an impact on the FICO score of someone who has not been using credit for very long compared to someone with a long credit history.

For the general population, the five categories are weighted as follows:

1. Payment History: 35%
2. Amounts Owed: 30%
3. Length of Credit History: 15%
4. New Credit: 10%
5. Types of Credit Used: 10%

Credit utilization is one of the factors included in the "Amounts Owed" category. In general, I recommend keeping the utilization ratio below 30 percent for each of your credit cards as well as for all of your credit cards in total. While it is difficult to know exactly what ratio is the best for each person, higher utilization ratios can negatively impact your FICO score.

Canceling an unused credit card with a high credit limit can increase your overall utilization ratio. However, there are many good reasons to cancel an unused credit card especially if it removes the temptation to use it or cleans up or simplifies your personal finances. As with many other financial decisions, you should weight the trade-offs of each decision as they apply to your specific circumstances before doing it. Your credit utilization ratio is an important part of your credit score but it is only one of many pieces used to determine your credit worthiness.

I have a significant amount of credit card debt and can only make the minimum payments due to my other monthly expenses. The interest that I am paying on the credit card debt is very high. While I know it is not good to withdraw money from my IRA account before retirement, should I take money from my IRA to pay down my credit card debt?

During tough economic times, people often consider tapping their retirement accounts as a source of funds to help make ends meet. While this may seem like an attractive option, making a non-qualified withdrawal from your IRA before age 59.5 can be costly. The federal government (and some state governments) imposed steep penalties in order to discourage these withdrawals. The federal penalty is 10 percent of the taxable amount withdrawn (i.e., pre-tax or deductible contributions and earnings on those contributions). There is no penalty for withdrawing your after-tax or non-deductible contributions from your IRA.

In addition to the penalty, amounts withdrawn are subject to federal and state income taxes unless the withdrawal includes after-tax or non-deductible contributions. For example, a $20,000 withdrawal would cost you approximately $7,000 in taxes and penalties (assuming a combined federal and state tax rate of 25 percent and an early withdrawal penalty of 10 percent).

I generally advise against taking an early distribution to pay off your credit card debt for a variety of reasons including the out-of-pocket costs mentioned above. That said, I can certainly appreciate the financial, emotional, and psychological benefits associated with reducing or ridding yourself of your credit card debts. From a short-term, financial standpoint, I think you should evaluate if it is worth the cost of the penalties and taxes to rid yourself of your credit card debt. Just as important though, is determining how you can satisfy your monthly expenses without incurring new debts while continuing to save and replenish your retirement funds.

As a final note, there are exceptions to the 10 percent early withdrawal penalty. If any of the follow apply to your situation you may be able to reduce the impact on your retirement savings of making an early withdraw. The exceptions include withdrawals made for:

• Medical expenses (to the extent they exceed 7.5 percent of your Adjusted Gross Income),
• Health insurance premiums paid by unemployed individuals,
• Qualified higher education expenses,
• First time home purchases (up to $10,000 dollars per lifetime), and
• Individuals called to active duty.

This is a question often asked by newlyweds: After marriage, does a good or bad credit rating of one spouse affect the other spouse?

The answer is that one spouse does not affect the other spouse directly. You continue to maintain your own credit rating and credit history regardless of whether you get married or divorced (and is also not affected by a name change after either event.) Credit that has been taken out in your name alone goes into the making of your individual history.

However a spouse's rating can indirectly affect you, by affecting your ability to establish a joint liability. For instance, suppose you want to take out a joint credit card or a mortgage. If one party has a poor credit score it might affect your rate. In this circumstance the spouse with the better score could take out the loan in his or her name alone.

Something else to consider is why one spouse has a low credit score. Does that person have poor credit habits, making payments late or building up a lot of debt? In this case you might want to keep all of your credit separate. Both parties on a joint loan are liable for the debt, regardless of who is responsible in your eyes for making the payments, and it affects both your credit scores.

On the other hand, taking out a joint loan and making sure you stay current may be a way to help the spouse with a poorer score to boost his or her numbers.

It is important for both spouses or partners to be upfront and honest about their credit history. It could affect your ability to save together for retirement, vacation, or other goals.

You might be aware that IRAs have some creditor protection.  In fact, a 2005 bankruptcy law allows an individual to protect an IRA worth as much as $1M from creditors.  However, a recent court case seems to indicate that this bankruptcy protection does not apply to IRAs that are inherited from another person. 

The precedent-establishing Texas case involves a daughter who inherited an IRA from her mother and later filed for bankruptcy.  The daughter maintained that the inherited IRA should receive the same $1M in protection afforded to other IRAs.  However, the Texas court ruled that only the debtor's own funds qualify for the protection.  The case likely hinged on the fact that inherited IRAs remain titled in the name of the original account holder.  (When you inherit an IRA from anyone other than a spouse, you actually keep the name of the original account holder and add "for benefit of the beneficiary")

Finally, you should know that the $1M exemption put in place with the 2005 law has now increased to $1,171,650 due to the impact of inflation. 

One of the most popular credit card related questions I see is "I have several credit cards that I no longer use, I'd like to get rid of them but I don't because I think it will hurt my credit score".  While it is true that your credit score can be hurt by closing out a lot of your accounts all at once, it generally still makes sense to close at least some.  This statement is especially true now that several credit card issuers are beginning to impose inactivity fees if you don't use your card at least once every twelve months.

In order to decide which cards (and how many cards) to close, you need to look closely at your credit utilization ratio.  This ratio is computed by adding all of the credit card debt you owe and dividing that figure by the total credit limit you have across all your cards.  For example, if you have $10,000 in total credit card debt and you have 10 cards which each have a $10,000 credit limit, your credit utilization ratio is 10 percent ($10,000 divided by $100,000).  If you close out two cards that you no longer use, your credit utilization ratio would increase to 12.5 percent ($10,000 divided by $80,000).  This relatively minor change in your credit utilization ratio would likely have only a very small impact on your credit score.  However, closing out 7 of your cards could send your ratio soaring which would likely result in a hit to your credit score.  So, the plan should be to get rid of cards you don't use gradually.  Alternatively, you can agressively pay down debt so even if you close some accounts, you can keep the ratio unchanged.

My son filled out the FAFSA (Free Application for Federal Student Aid) using his Mothers 2008 income tax info. In actuality, he should have been using his father's information because his father had primary custody of him for the past year. How do we go about correcting this on the FAFSA form?

The FAFSA form is intended to be a snapshot of your family's financial condition at a given point in time. Therefore, if the information on your form is incorrect or out-dated, you should correct it so that the schools have a more accurate picture of your financial condition upon which to base your eligibility for aid. There are several ways to make corrections and updates. Parents and students can make changes to a previously submitted FSA form via the Web, by paper or by telephone.

To make corrections via the Web go to the FAFSA's web site at www.fafsa.ed.gov. You will need to log in to the site with your PIN to submit any changes. You can use this system to submit most types of changes except for social security number changes.

In addition, you can submit changes online even if you did not complete your original application online. Changes can also be made by mail by correcting your Student Aid Report (SAR) and mailing it to the address listed on the SAR. The SAR is a summary report that you receive after your FAFSA is processed. If you did not receive a paper SAR because you applied online or via the FAFSA web site, you can call the FAFSA at 1-800-4-FED-AID (1-800-433-3243) to request a paper version of your SAR.

The FAFSA also allows parents and students to make changes and corrections by telephone. However, the types of changes allowed are generally limited to processing errors. In addition, you will need your DRN (data release number) from your SAR to be able to make corrections by telephone. To make changes by phone call the Federal Student Aid Information Center (FSAIC) at 1-800-4-FED-AID (1-800-433-3243).

For more information visit the FAFSA web site at www.fafsa.ed.gov.

The housing market is still very unstable.  One month we read that sales are strong and prices are rising.  The next month we see that sales are down.  One piece of discouraging news that came out recently was that in the fourth quarter of 2009 another 600,000 homeowners found themselves "underwater" or owing more on their mortgages than their homes were worth.  In fact, the total number of households in this situation is now over 11 million people or 24 percent of all properties that carry a mortgage.  This information, reported by First American Core Logic, a real estate research firm, tells us that many people are still really struggling.

The first choice for many homeowners in this situation is to try to restructure their existing mortgages.  However, this can be a very long and painstaking process and many people find that they do not qualify.  As a result, more and more people are thinking about walking away from their existing homes and mortgages. 

Aside from the moral considerations, which are great, what are the points you need to consider before you think about walking away from a mortgage?  First, you need to understand that that is a huge decision.  It might seem like this option would solve a lot of your problems, but in reality, it generally just adds more. Probably the biggest impact is that you will not be able to get a new mortgage for quite some time -- five years is typical.  That means you need to prepare to be a renter for at least that amount of time.

Plus, your credit score and record will be adversely impacted for about seven years.  During that time, your ability to get any other kind of loan will be negatively impacted.  Car loans, assuming you can get them, will be at a very high interest rate.  Same for any other type of consumer loan.  Finally, there may be adverse tax implications as well.

So, walking away is certainly not without its costs.  If your financial life is going to be impacted for five to seven years anyway, it just might make more sense to hang in there and keep making the mortgage payments.  No one can accurately predict what the real estate market might look in 2015 -- perhaps by then your situation could be dramatically different.

Yes, there is a free credit report available to you but no, you don't get it at Freecreditreport.com. If that sounds confusing, it is!

I did a google search for "free credit report" and came up with 3 websites at the top of the search results, under the sponsored links. The first one, www.freecreditreport.com, will give you a free report, but at the same time signs you up automatically for their $14.95 per month Triple Advantage (sm) credit monitoring program. The second site, www.creditreport.com, also auto enrolls you in a $14.95 per month program that automatically monitors your credit. The third site, www.freecreditreportinstantly.com, auto enrolls you in two programs: a $29.95 per month "Credit Diagnosis" (sm) program and a $1 per month Your Savings Club, a discount buying club.

All of these automatic enrollment services give you 7 days to cancel, but you can't get your free credit report without the hassle of signing up and then cancelling services.

The New York Times recently reported that Freecreditreport.com has settled charges with the FTC and paid a $1.25 million fine for misleading consumers on their website.

If you want the free credit report that you are entitled to, with no strings attached, go to www.annualcreditreport.com. This is the site set up by the government that allows you to access a report from any of the three credit bureaus, at no cost - for real! Just remember that you are allowed one free report from each bureau every 12 months. So if you request a report from Experian in November you'll have to wait until next November to request another one from Experian, but you can request a report from Trans Union in December.

Are funds in my 401(k) plan protected from creditors if I file personal bankruptcy?

Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (a.k.a. the Bankruptcy Reform Act) tax-exempt retirement plan accounts (including qualified plans, traditional IRAs, Roth IRAs, 403(b) plans, 457(b) plans, SEPs, and SIMPLE plans), are protected from an employee's creditors in the event of bankruptcy. With the exception of the Traditional IRA and Roth IRA assets, all of these tax-exempt retirement assets are protected without a dollar limit.

Traditional IRAs and Roth IRAs are protected up to $1 million dollars under the federal law. However, some states may provide additional protection beyond the federal limits. Additionally, the language in the federal law seems to suggest that any funds rolled over from an employer retirement plan are fully protected even if the amount exceeds the $1 million dollar limit.

Keep in mind that there are exceptions to the protection provided under the Bankruptcy Reform Act. Certain liens and debts are not discharged or fully discharged under this law. These include:

• Tax liens,
• Debts for luxury goods/services,
• Cash advances,
• Judgments against you for death or injury caused while intoxicated,
• Domestic support obligations,
• Educational loans,
• Debts incurred to pay taxes, fines and penalties,
• Debts from divorce or separation,
• Homeowner association, condominium, and cooperative fees,
• Fees on prisoners,
• Pension or profit sharing debts, and
• Debts or liens incurred from interference with lawful provision of services.

Yesterday, Congress passed the Credit Cardholders' Bill of Rights Act of 2009 and sent it to President Obama for his signature. This bill amends the Truth in Lending Act and provides consumers with many reforms to the way credit cards are issued and administered today. According to the bill that was passed, here is a summary from the Library of Congress of what it means to consumers:

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My Mom authorized me to be a user of her Master Card when I was in college. I only used it when I traveled one summer. I haven't used the card in 3 years but notice that my mother's credit card shows on my credit report. Am I liable for any balance merely as an authorized user? I didn't even have a job at the time I used it. I was a full-time student. I have asked the credit reporting agency if it can be removed from my credit report as it is my mom's account.

As an authorized user on your mom’s credit card account, you are not legally responsible for payment of the debts incurred on that account. Keep in mind that an “authorized user” is different from a joint account holder. An authorized user’s financial status (i.e., your income, financial assets/liabilities and credit history) is not considered by the creditor for purposes of that account. On the other hand, a joint owner’s financial status is considered by the creditor for the joint account. Joint account owners are responsible for repayment of any debts on a joint account.

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My father died almost a year ago now. He was the cosigner for my student loans and I was told that the loans he co-signed for me were forgiven. However, my account still shows $8000 in loans. Would the loans issued before his death be forgiven? And how do I go about getting loans in the future?

Your dad was only a co-signer on the loans. It appears from your description that you were the primary borrower so you are still responsible for re-paying the loan. (As a co-signer, your dad would only have been responsible for your debt if you were unable or unwilling to pay.) I would check with your loan issuer to be sure but I would assume that you are responsible for the debt.

If you are talking about a PLUS loan that your dad might have taken out for you, it is possible that the loan might be cancelled or discharged because he would have been the primary borrower on that type of loan. Again, you would need to review the promissory note that was signed and contact the loan provider.

For any future loans that you might apply for, you would have to apply using only your income information and hope you get approved. If you are denied a loan based on your own earnings, you may have to find another person willing to co-sign for you. These days, that might be very difficult to do. I always counsel clients to never co-sign for a loan unless they are fully prepared (and able) to pay back the loan in question. Being a co-signer can have all kinds of negative consequences. Many co-signers are not aware that their credit and credit score can be negatively impacted even if the original borrower is dutifully making all required payments. That is because the loan will still show up on the co-signers credit report. If the co-signer is hoping to be approved for a large loan for a mortgage or a car, lenders may deny the loan because the potential outstanding debt level is too high.

It’s always a good idea to be vigilant about your credit score, but even if borrowing loosens up a bit in 2009, you still need to do everything necessary to keep your credit score high. Fair Isaac, the company that created the FICO score, has been working on a new version of its landmark credit scoring method that might have serious consequences for you if you’re planning on borrowing for a home or establishing any other new credit in 2009. The new version of FICO is going to be particularly focused on your balances, not only on your on-time payment records.

Your top priority under this new system: Get balances down.

Reports say that the new FICO revision will actually allow a bit of lenience on late payments – something that might affect more than a few consumers with the downturn in the economy. Obviously, this won’t mean that someone can chronically pay late, but once or twice won’t make the same impact as in earlier FICO versions.

Yet credit utilization – essentially the amount of credit you’re actually using relative to your credit limit – is a much bigger deal simply because high balances are so prevalent right now. From the lender’s perspective, high balances mixed with a tough economy means a higher risk of default among customers.

So what’s a good target utilization rate for all your revolving credit accounts? No more than 50 percent of your credit limit, and if you can get it significantly lower than that over time, that’s a good plan. So, the lower your credit utilization, the better your score.

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Just how do you go about correcting your credit information? About two years ago we applied for a car loan and found out that our son's financial info was included in my husband’s credit report. Our son pays his bills so that is not a problem but he does have loans and credit cards that are NOT ours.

We contacted all three credit reporting companies with NO results. We sent detailed corrections with proof of identification with no results. A person from one of the companies when we were discussing the fact that my son and husband have the same first name (but certainly not the same address, social security etc.) said "close enough".

How exactly do you get the wrong information corrected once they have it in their computers? I might also say that this experience has led us to have very little confidence in the privacy and accuracy of these reports.

Unfortunately, correcting your credit report can be a long and frustrating process. While the Fair Credit Reporting Act (FCRA) regulates how credit information is collected, maintained and used it does not ensure that the process is as straightforward as it should be.

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Is my executor or trustee responsible for my credit line loan at the bank after I die? There are no funds in my estate and no insurance on the loan.

In general, executors and trustees are not personally responsible for the debts and liabilities of the decedent. However, there are a couple of exceptions to this that I will explain in greater detail later in this posting. In terms of the debts and liabilities of an estate, the role of the executor or trustee is to make sure that legitimate debts and claims are paid from the decedent's assets. If the estate does not have enough assets to pay all of the outstanding debts, it is likely that some creditors may not get paid. State laws determine which debts will get paid and in what order. Debts such as funeral expenses, legal fees, and court fees are considered high priority debts and are usually paid off first. Outstanding credit card balances and other similar debts are usually considered a lower priority and are paid after the higher priority debts are paid in full. Debts and loans that are secured by property such as mortgages and car loans are usually the responsibility of those who inherit the property. If the property is sold rather than inherited, the debt associated with that property is usually paid with the proceeds from the sale of the property.

Earlier I mentioned that an executor or trustee is not usually responsible for the debts of the decedent. However, there are exceptions to this. An executor or trustee may be personally responsible for the debts and liabilities of a decedent if he/she is the decedent's surviving spouse or if he/she causes the estate to lose money due to his/her mismanagement or dishonesty.

Depending on the property ownership laws in your state and the type of the debt outstanding, the surviving spouse may be liable for the debts of his/her deceased spouse. For example, debts that were incurred together such as jointly held credit cards may become the sole responsibility of the surviving spouse once one of them dies.

An executor or trustee has an obligation to act in the best interest of the decedent's estate. Therefore, if the executor or trustee causes the estate to lose money due to their dishonesty or mismanagement, the executor or trustee may be held financially responsible for those losses.

Due to the unique nature of each person's financial situation and the differences in state laws, it would be a good idea to consult with an attorney if you have any questions about how your outstanding debts will be paid upon your death.

Many experts believe that borrowing will continue to be tight in 2009 unless the government does something to loosen the credit markets at the consumer level. This means that it will be increasingly difficult to get favorable interest rates on consumer loans including mortgages, auto loans, and credit cards unless your credit score is among the highest. According to Fair Isaac, the company that created the FICO credit score, those with a score in the range of 760 - 850 should receive the most favorable interest rates when looking to borrow. During the past year the bottom end of this range has increased by roughly 20 points as credit markets tightened up.

While your FICO score is only one factor used by creditors to make lending decisions, it is used widely by lenders as an indicator of your overall credit history. Understanding your FICO score and it components is critical to improving or maintaining your ability to borrow.

FICO scores range from 300 to 850. In general, the higher your score is the more favorable the interest rates available to you when you apply for a loan or for credit. An example from Fair Isaac illustrates the significant difference in the average interest rates available to those with a FICO score in the 760 - 850 range versus those with score in the 500 - 579 range. The average interest rate as of Nov. 24, 2008 for a $300,000 dollar, 30-year fixed mortgage in Massachusetts is 5.652 percent for those with a score in 760 - 850 range compared to 9.931 percent for those with a score in the 500 - 579 range. This difference in interest rates means higher monthly payments of $885 dollars for those with a FICO score between 500 and 579.

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My elderly grandfather is a cosigner for my $25,000 student loan and I am worried about how this might affect his modest estate after he dies. I plan on paying off the loan when the time comes and I assume I will not be in default when he dies. But what if I default after he dies? How long after his death are my grandfather and his estate on the hook? I don't want my mom, uncles and aunts to be burdened with the specter of this cosigned loan.

Good question! Unfortunately, there is not a single universal answer to this. Similar to when a borrower dies, it generally depends on the type of loan or loan program, the guarantor or lender, and the specific terms of the loan. As the economy tightens and lending standards increase, borrowers are increasingly turning to other options to improve the chances of successfully securing a loan. One option has been to seek someone to co-sign the loan. Often this means asking a family member, a relative or a close friend to assist. Although a co-signer may not have primary responsibility for the repayment of the loan, their obligations (or their estate’s obligations) may continue after death.

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I am planning to borrow some money from a family member for little or no interest. I would like to use it to pay off three of my credit cards totaling $15,000 dollars. What would be the best way to get these companies to lower the total amount owed so I can pay them off for less?

If you are having difficulty meeting your credit card obligations, one option may be to try to negotiate a settlement with the credit card companies directly. Credit card companies may be willing to provide you with various forms of relief including reducing your interest rate, reducing your monthly payments, waiving late payment fees, reducing the total amount that you owe, or extending your payment period.

If you decide to contact them to negotiate some form of relief, you should contact them as soon as you suspect that you will have difficulty making your payments. Let them know if you have experienced any financial hardships (such as a job loss or a medical emergency) that may have contributed to your inability to make timely or full payments. Also, discuss the things that you are trying to do to remedy the situation. These steps may give you a better chance of successfully negotiating a settlement with them.

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I have $15,000 in credit card debt. I have $40,000 in a Rollover IRA. I have a 1 year old and a 3 year old that are both in daycare so my weekly expenses are high. I charge on my credit card monthly about what I pay for my minimum payment. I was thinking that if I took out $20,000 out of my IRA and paid off my credit card that the money I am spending on my minimum payment I could use for my monthly expenses. I know it is bad to take money out of an IRA but what I am paying in interest on credit cards is going to cost more than taking a hit on taxes by taking out the money out of my IRA. What are your thoughts?

In difficult economic times, one of the more common places that people want to turn to in order to make ends meet is their IRA account. While this may look like an attractive option to get cash, making a non-qualified withdrawal from your IRA before age 59½ can be costly. The federal government and some state governments discourage non-qualified, early withdrawals by imposing steep penalties on these transactions.

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I have $11,000 in credit card debt and I recently missed two payments. Now my interest rate has soared. Why am I having a hard time getting them to lower my interest rate? I usually pay my bills on time.

I wish I had better news for you but you are probably out of luck. According to a recent study by the Center for American Progress, in the first quarter of 2008, banks charged off 4.7 percent of their credit card loans. This represents a 33 percent increase from the first quarter of 2006.

There is no question that banks are feeling the pinch and they are doing whatever they can to reduce risk and and raise cash. Most often, banks have been systematically lowering cardholder's credit limits and raising fees. And, as you have recently learned, they are increasing interest rates at the very first sign of trouble. One missed payment can send your interest rate to the maximum permitted under the terms of your cardholder agreement. By raising your interest rate, the bank is hoping to scare you into paying down the debt.

You can always try to call the credit card company and plead for a lower rate -- sometimes persistence does pay off. In my opinion, that avenue is always worth a try. If there was a specific reason you missed two payments, try explaining your particular situation. If you have been a lifelong customer with a solid payment history, throw those facts in as well.

At the end of the day, however, you might not have any choice but to accept the higher rate and try to pay off the debt as aggressively as you can. You might have some success moving the balance to another card but even that would be a longshot now that you have missed two payments.

For more information on this topic, check out this interesting post on msnbc.com, it details how a new policy at American Express allows that firm to penalize cardholders based on where they shop and which bank holds their mortgage.

I have $2,000-$3,000 to either put in a retirement account or use to pay down debt but I am not sure which would be best for me at this time.

I am 65 and work. I intend to retire at 70, but could do so sooner. My debt includes a $68,000 mortgage at 4.78 percent; $9,000 home equity loan at 4.88 percent; credit card loan of $7,500 at 3.99 percent and a second credit card loan of $8,500 at 1.99 percent.

Considering the current state of the financial markets and how close I am to retirement, should I invest the $2,000-$3,000 in an IRA or use it to pay down my debt?

My inclination is to use the extra money to pay down debt or possibly to supplement your emergency fund if your emergency fund is on the low side. None of your debt is at a high rate (which would ordinarily make me want to see the money invested) but you will be retiring soon and it would be nice if you could enter retirement with as little debt as possible.

Right now you have $16,000 in credit card debt. That is quite high. I see that the rates are low, but I have to wonder if these rates carry an "expiration" date. If these rates are fixed, I would leave use your extra money to pay down some of the more expensive debt, like the home equity line. (That being said, you should still be trying to pay down your credit card as aggressively as you can.) You are not living within your means if you carrying that level of credit card debt.

These days, with the market so rocky and the job market looking worse and worse, there is definitely something to be said for having a ready supply of cash. In this blog, I have always been an advocate of having an emergency fund. Generally, I recommend a fund equal to 3 to 6 months of your necessary monthly expenses.

Now, more than ever, this emergency fund is critical. If you are worried about your job and your financial security, build this fund up to 6 months of expenses as quickly as you can. Money in the bank can do a lot to ease a worried mind.

These days, if you miss even one payment on your credit card, you could be receiving a call from your bank instead of a letter. That is because more and more people are now defaulting on their credit card debt. A recent article in the Wall Street Journal stated that 4.5 percent of bank credit card accounts are now delinquent.

Banks are so anxious to see balances paid down that some are offering payment incentives. Citibank has been contacting some of its credit card holders and offering to match a percentage of the payments made over the minimum amount due if the cardholder agrees to pay off a percentage of their balances quickly. There is a cap on the match ($550) and the cardholder usually has to agree to at least temporarily stop using their card.

Another bank has realized that cardholders are using caller ID and answering machines to avoid collection calls so they are mailing phone and gift cards to late payers to get them to call back. The trick is that the gift cards are not activated until the account holder contacts the lender.

The point is that if you are struggling with credit card debt, you should contact the bank as soon as you can. Companies are definitely trying harder to work deals that will work for you. Some will offer temporarily lower payments until you catch up on your debt. At the end of the day, the credit card companies want the debt paid off just as quickly as you do.

I am very concerned about my in-laws' financial situation. They are in their mid- and late-60s, still working, and to my knowledge, have no retirement money saved. The only thing that I see as an asset is their house, which is probably worth over $1 million, though I'm certain they have a number of loans against it.

What financial issues should we anticipate as they get older? In cases like this, will the responsibility of paying for their medical treatment (should it be necessary) or debts fall on us?

This is certainly a very tough situation. It seems to me that your in-laws will almost certainly have to continue working well into their 70s and possibly longer. You (and they) have to hope that their health is good enough to permit that.

I would suggest approaching your parents with your concerns. It is possible that they have some retirement savings that you are not aware of. Tell them that you are concerned about their future financial security and ask them if they think they might need some professional assistance. There are many financial planners who do financial "check-ups" and maybe you could arrange one for your in-laws. Cost for these kinds of meetings would be approximately $500. You won't get a full plan with this type of consulation but the planner can make the "tough calls" about what kind of retirement your in-laws will face if they can't change their habits.

If your in-laws started aggressively saving right away, they could still build a retirement nest egg. They should also probably delay taking Social Security until age 70 so they can receive the largest possible benefit. It might also be necessary for them to sell their home, pay off their loans and move to a less expensive property when they retire. They may even have to relocate to a less expensive area of the country.

You would generally not be legally responsible for any of your parents expenses or debts but you might feel an emotional obligation to help them out if their situation becomes particulary dire. If you think this will be the case, you should adjust your financial plans accordingly.

This is one of the big reasons that financial planners always tell clients to save for their own retirement first. It doesn't do anyone any good if parents direct all of their excess savings to their children's college tuition at the expense of their own retirement.