Payments from credit firm late

Dear Liz: I have been in a credit counseling debt-repayment plan for the last four years. The money for my debt is automatically transferred from my bank account to the agency, which is supposed to pay my credit cards. The problem is that the agency pays one of my credit card accounts late or not at all. When I write or talk with the agency the responses I get are unfriendly and imply the problem is my fault, although I’ve made my payments on time. I am trying to do the right thing and pay my bills off. I think it was a bad idea to join this agency. How can I fix this problem?

Answer: It appears the credit counselor you chose is not affiliated with the National Foundation for Credit Counseling, the oldest and most respected of the groups representing credit counselors. If it had been, you would have been assured the credit counseling agency was truly nonprofit (rather than a for-profit corporation masquerading as nonprofit) and you would have had recourse with the foundation if your payments had been misapplied.

You might consider contacting a foundation-affiliated agency (you can find one at www.nfcc.org) for a review of your situation.

Using home to back speculating

Dear Liz: A financial planner recently suggested that we refinance our fixed-rate first mortgage (a $120,000 loan with 10 years left at 4.865%) and our second (a $90,000 loan with 12 years left at 6.75%) and get a 30-year fixed rate loan for $100,000 more than the combined total of the debt. That extra money would be spread in a variety of investments. We plan to be in our house for about 10 more years. Does our planner’s strategy make sense?

Answer: For the planner, certainly. For you, not so much.

It rarely makes sense to borrow against your primary residence to speculate. And it’s a rare fee-only planner who would suggest such a scheme, so you’re probably dealing with a stockbroker, insurance agent or someone else who’s being paid on commission to sell you that “variety of investments.”

If you’re still not sure, run the idea past a true, fee-only financial planner. You can get referrals from the National Assn. of Personal Financial Advisors at www.napfa.org or the Garrett Planning Network at www.garrettplanningnetwork.com.

Liz Pulliam Weston is the author of “Easy Money: How to Simplify Your Finances and Get What You Want Out of Life.” Questions for possible inclusion in her column may be sent to 3940 Laurel Canyon Blvd., No. 238, Studio City, CA 91604, or via the “Contact Liz” form at www.asklizweston

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