Where helpful & harmful sometimes meet

It may seem very helpful when someone offers to handle paperwork on your behalf. However, before you agree to relinquish control, you should know that you are ultimately responsible for your finances—and any mistakes made on your behalf. Here are a few situations where a little outside help sometimes leads to big headaches.

-Medical billing and insurance. It is common for a medical provider to bill your insurance company for you. However, this does not mean that you are not responsible for the bill’s payment. You are responsible for the debt even if the bill doesn’t get submitted, is submitted with an error, or (for whatever reason) is not paid by the insurance company. If you do not pay the bill in a timely manner, the medical provider can report the delinquency to the credit bureaus and begin collection efforts. In some cases, it is smart to pay the bill and then try to get reimbursed from your insurance company.

-Vehicle trade-in. I just read an article from the Associated Press about an increase in the number of consumers who are left on the hook for used-car loans that dealers were supposed to payoff. When you trade in a car with a balance still owed, the dealer may offer to take care of the outstanding loan for you. If that doesn’t happen and the dealership folds, lenders can then go after you for the balance owed or repossess the car from its new owner. If you are trading in a car, pay off the loan first if at all possible. The other recommendation from the article is to deal only with dealers who are less likely to go out of business.

-Co-signing. Beware if you are on a cosigned loan that the other borrower has offered to “handle.” It is dangerous to presume that the other borrower is doing as they promised. As a cosigner, you are 100% responsible for the debt’s repayment. Any late payments will appear on your credit report; this is true even if you were unaware that late payments were being made. To be on the safe side, it is best to make payments yourself and then try to collect any money owed to you from the co-borrower.

-Divorce decree. While a divorce decree is extremely important document, is unlikely that creditors will honor its arrangements. The divorce decree is between you and your spouse and not your creditors. Your creditors are not involved in this settlement and have no input on the results. Consequently, the contracts you and your creditors have cannot be changed by the divorce decree. The ideal solution is to pay off any outstanding debts and start over. If this is not possible, visit with an attorney to discuss your rights and responsibilities before taking it for granted that you are not responsible for a debt.

Bottom line is that my 4th grader’s favorite “naughty” saying is true in some cases:
When you assume, you make an ass out of u and me.

 

Kim McGrigg is the former Manager of Community and Media Relations for MMI.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.

  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

  • The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.

  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.