Widow Can Use Husband’s Social Security Number

Question: My 86-year-old mother-in-law has been using her deceased husband’s Social Security number since he died in 1978. She has several certificates of deposit at a local bank as well as savings accounts and a checking account. She has not filed taxes for the last 10 years or so based on advice from a tax advisor at her senior center. In addition, her Medicare number, and I’m sure all her doctors, have the wrong Social Security number. Where do we start to try to correct this, or do we even need to do anything? I tried e-mailing the Social Security Administration last week, but have not heard from them. Can you point us in the right direction?

Answer: Lowell Kepke, deputy public affairs director at the Social Security Administration, first wanted to apologize that the agency didn’t respond promptly to your e-mail.

Next, he wanted to assure you that your mom actually may be using the right number for Social Security and Medicare purposes.

If your mom became entitled to benefits as a widow on her husband’s record -- which is pretty common, given that women of her generation often didn’t have enough earnings to qualify for benefits on their own -- then she would rightly use her husband’s number, with the letter “D” after it, as her Social Security claim number and her Medicare number.

In other words, if she’s receiving widow’s benefits, there’s nothing she needs to do. If she’s not receiving widow’s benefits, Kepke said, call the Social Security Administration at (800) 772-1213 to straighten this out. Social Security can issue a new Medicare card if the number she’s using is wrong.

If she’s using her late husband’s number for those financial accounts, then she probably should switch it to her own.

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Late Payments Hurt Co-Signer’s Credit Score

Q: I am the co-signer of some student loans for my son. He has made some late payments but I have never been notified or asked to make a payment. Thus I was surprised to see the lender, Sallie Mae, dinging me on a recent credit report. Is this right? How long will that stay on my record? Anything I can do?

A: You have a few options, which you probably won’t like.

First, though, the question must be asked: What did you think you were doing when you co-signed the loans? Normally when you’re asked to co-sign it’s because the borrower can’t qualify for credit on his own. That means the lender is looking to you to make good if the borrower flakes. It’s pretty much up to you to keep track of the other borrower when you co-sign a loan because, as you’ve seen, you suffer the consequences when he fails to pay.

Late payments are among the kinds of negative items that can stay on your credit report for up to seven years. The further behind he gets, the worse the effect on your credit rating.

So, on to your options. If this is a Sallie Mae Signature Loan, your son could apply to have you removed as a co-signer -- but only after he makes 24 on-time monthly payments, and only if his credit is decent when he makes the application. You also could ask him to consolidate or refinance the loans, which would remove you as a co-signer -- but again, he’d need to get current and have good credit.

Obviously, you’re long overdue for a parent-son talk about the importance of paying bills on time and maintaining good credit. If worse comes to worst, you may need to take over the payments just to protect your credit rating.

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Tapping Home Equity Can Be Serious Mistake

Q: I’m a single mom with four kids, $13,000 in credit card debt and a car that’s on its last legs. I owe about $75,000 on a home that’s worth about $100,000. I figured if I borrowed against the equity in my home, or even got one of those loans for 125% of my home equity, I could pay off the credit card debt, buy a $10,000 car and put some money in savings, because we have none. My credit score is excellent. Any advice you have would be appreciated.

A: Here it is: Don’t do it.

Tapping all your home equity is a serious mistake. You’ll leave yourself with no financial cushion for an emergency. If home prices decline, you could find yourself trapped with loans that exceed the value of your house. If you had to sell, you either would have to pay the difference to the bank or wind up with a trashed credit rating.

Any time you borrow more than 80% of your home equity, you’ll typically face higher interest rates and fees as well.

If borrowing 100% of your equity is bad, then you can see how those 125% loans are even worse. You’re not allowed to deduct interest on the amount of a home loan that exceeds the value of your house, and the rates on 125% loans tend to be outrageous.

Finally, borrowing money to put in savings is a tad ridiculous. You’ll be paying much higher rates on the money than you could ever earn in a savings or money market account.

What you really need to do is stop using credit cards and start living within your means.

If you need some advice on how to cut costs, check out the Dollar Stretcher Web site at www.stretcher.com.

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Liz Pulliam Weston is a contributor to The Times and a columnist for MSN.com. Questions can be sent to her at asklizweston@hotmail.com or mailed to her in care of Money Talk, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012.