HELP ME CLARK!
From HLN's Money Expert Clark Howard

Urain:

My brother has been deceased since 2002, and yet I received a collection letter in his name at my address recently. If a credit report was pulled it would show my brother as being deceased and after seven years, from my understanding, it should have been written off. Correct?

Clark:

There are several things here. First, if your brother was still living, statute of limitations is how long somebody can sue you against the debt. Seven years is how long it can stay on your credit report. But the collection agency is looking for any last known address for your late brother. They don't care that he's deceased. They have no heart. But the reality is, you have no obligation for that debt, nor does any other family member. Best thing to do with that is put it in the circular file. That's right. You throw it in the trash or recycle it.

HELP ME CLARK!
From HLN's Money Expert Clark Howard

Stephanie:
My sister is turning 18 in a month and wants to go with a credit building service. They will help her build her credit by paying her utilities through them. She says it's a free service, but it doesn't add up. Is this a legitimate service that really is free for her? How can she pay her utilities and build credit?

Clark:
Well, here's what’s going on. There's what's known as an expanded credit score that was designed by the official credit scoring people, FICO. And their expanded scoring model covers things like how you pay apartment rent, how you pay utilities - bills that would normally only end up on your credit report if you went delinquent on them.

Now, the reality is, I know of no one in the credit granting industry that's using the expanded credit scoring model. It would be great if they were, but to my knowledge it's not going to help your sister. The best way for her to establish credit is with a secured credit card.

A secured card is one where you post a balance in a savings account and your credit limit is based on that. If you make on-time payments with a good secured card for 12-18 months, you then graduate to a regular Visa or Mastercard that will help you build the credit you want to.

Money Coach with HLN’s Money Expert Clark Howard

Having trouble managing money? Do your money goals seem impossible? Clark Howard wants to help you!

We’re looking for individuals or families who are willing to be profiled on HLN.

Those chosen will get money advice and information from Clark Howard.

This week’s question comes from the Kerry Genter of Duluth, Minnesota.

HELP ME CLARK!
From HLN's Money Expert Clark Howard

Pat:
I have had my credit card for about nine years. It was due for renewal this October. They sent me a new card that was good for three months. I have called them twice, only to hear that they "will send me a new card when this one expires." What is their purpose for doing this?

Clark:
My guess is this is based on all the disruption in the credit markets.

They may be trying to decide if they're going to fire you. And by giving you a new card, it's very expensive for a credit card company to issue a piece of plastic, believe it or not.

To do that for only 90 days means that you and maybe a lot of other customers are under credit review. Make sure that during this 90-day period, you apply for other cards if you don't have any.

If you have several other cards, you can rest easy even if they decide to fire you.

Money Coach with HLN’s Money Expert Clark Howard

Having trouble managing money? Do your money goals seem impossible? Clark Howard wants to help you!

We’re looking for individuals or families who are willing to be profiled on HLN. Those chosen will get money advice and information from Clark Howard.

This week’s question comes from the Lites family.

HLN Money Expert Clark Howard.

Help Me Clark!
From HLN's Money Expert Clark Howard

JAMES:
Two years ago, my mom charged about $11,000 dollars to my credit card and now they're coming after me. I am 22 and just graduated from college, and many employers look at my credit as a negative towards hiring me. The debt collectors call me and I have tried offering a settlement and they will not accept it even after I have explained the situation to them. What should I do? I cannot afford to pay them anything.

CLARK:
Well what a sad thing that your mom betrayed your trust and charged to your credit card. I get this question a lot where a family member or a friend abuses your credit card and you're left holding the bag.

Normally you would have to fill out an affidavit where you swear that you did not make the charges and you say that they were made by your mom and if you do that at the time that the charges have taken place or the time you knew the charges had taken place you normally are not liable for those charges.

You've let this go on and it doesn't sound at all like you want to put your mom in to legal jeopardy so it's going to be up to you to try to make a deal. You have two issues. One is the affect on your credit which for seven years the unpaid debt harms you on your credit report. If you reach a deal and the debt no longer exists on your report the harm to you lessens enormously and with time essentially disappears so the most important thing is to try to cut a deal. And the key number for you is you're two years out from this, once you hit statute of limitations in your state, which means the amount of time that somebody could sue you against a debt you have far more negotiating power to negotiate a settlement for a much smaller amount than the 11,000.

Likely once you go outside of statute of limitations you should be able to settle the debt for 1,000 or so dollars.

If you go and do a Google or Bing search and put in your state and put statute of limitations on debt as the search, you'll see. And that varies by state from either 3 or 4 years on a credit card debt. Some states it will be longer than that.

HELP ME CLARK!
From HLN's Money Expert Clark Howard

BRENDA:

We own a small Mom & Pop store and this economy is killing us. We have been searching online for a grant that will help us keep our business open. Is there anything out there as far as free money that we can get? We see a lot of grant offers online but they want money for the packages. Is there any government grant money for us without purchasing a package?

CLARK:

Well, the grant offers you're seeing promoted on the web are scams.

There's not even a grey area about that. The truth is that a lot of business owners are struggling right now and they're looking for funds.

The Small Business Administration (SBA) was out of money, but now has a new allocation and it would be a good idea to go to your local score office at score.org, the Service Corps of Retired Executives.

Make an appointment and go sit down with someone. They are experts on the SBA loan program, if there is an SBA loan you would qualify for, or any ideas they might have for how to survive these tough times.

Consumer Reports surveyed more than 1,000 consumers and found they learned big lessons from the Great Recession this year and vowed to permanently scale back their spending.

A whopping 71 percent of Americans purchased only what they absolutely needed this year, 53 percent used credit cards less and 39 percent said they put more money into savings.

Consumer Reports calls this "intelligent thrift." They say it is replacing credit-driven spending and this new fiscal conservatism will last once the recession is long gone.

Survey after survey show Americans are scarred and scared after two years of recession. Even when it ends, it is bound to lurk in our spending psyche, much as the Great Depression was never far from our grandparents' and great grandparents' minds. It's the way boom and bust cycles work, and it's a necessary response to a generation of profligate spending with other people's money.

And that's what it was - spending with OTHER PEOPLE'S money. Middle class living standards of the last 20 years turn out to be a mirage. Now that the jobs are disappearing and the home values have plummeted, the picture is getting clearer. There is no doubt that American families are just beginning to feel the changes that are coming as the middle class undergoes these wrenching changes.

And the upheaval is sparking some interesting trends. As the banks reel in the bubble of credit they offered with abandon (who could open the mailbox without getting a credit card offer?!) it's making credit card customers very angry.

The very banks that were bailed out by the taxpayer are now jacking up interest rates for good-paying customers, denying credit, and slapping overdraft charges on debt cards. But is it right to refuse to pay your credit card balance because you think the bailed out bank that issued it is unfairly raising your rates?

Ann Minch went viral on YouTube with her September 8 rant against Bank of America. She said she was staging a debtor's revolt because her interest rate on a $5,900 credit card balance was raised from 12.99 percent to 30 percent. Her rant resonated and was viewed more than 350,000 times. Bank of America relented and lowered her rate, but there is more here. She may have been late with a couple payments. There was nothing illegal about the bank's raising her rate. And she could have paid off the balance at the old rate and closed the account.

We want to know what you think about credit card fees, the "intelligent thrift" consumer, and whether it’s wise for consumers to take matters in their own hands and refuse to pay their bills.

Call or email us with any questions about your money, and your thoughts on how the Great Recession has changed your life. Call 877-266-4189.

HELP ME CLARK!
From HLN's Money Expert Clark Howard

LEE:

My mother is 83 and has been making payments on three credit cards that total about $350 a month. She has been paying these cards for many years. The principal has more than been paid off. My question is: Can she stop making these payments? She never has enough money in a month for her medications & glasses. I have helped as much as I can but I'm 62 and worried about my future finances.

CLARK:

Well you know, the frustration is yes, if you take what your mom has been paying each month over these years, it would obviously more than pay off the balance.

Except as they calculate all the interest charges, the balance either stays the same, shrinks a little or continues to grow.

And this is an endless cycle that is exactly where the credit card companies want your mom.

The realty is your mom should buy her medicines before she worries about the credit card companies. What are they going to do? Put her in debtor's' prison? We don't have that in the United States.

So if it's a matter of eating or having the meds she needs for good health, she should do those things and not send one penny to the credit card companies.

If she gets solidly back on her feet and somehow she's able to come up with money for them, she can pay then. Otherwise they have to sit and wait, and you have no obligation on any of her credit cards.

HELP ME CLARK!
From HLN's Money Expert Clark Howard

RYAN:

My lawyer accidently gave my social security number to a family member I cannot trust. This person also knows my birth date, address, employer etc. What is the best plan to "cover all my bases" and be sure that this information isn’t used to open new credit cards or loans without my knowledge? Thanks

CLARK:

Ryan, if I ever knew somebody who was made-to-order for doing a credit freeze, you are the one.

With a credit freeze, all this information in the hands of your relative does them no good to open accounts in your name.

What you do is, you put in to place a freeze with Equifax, Transunion and Experian and once you have those freezes in place, and depending on the state and your situation, it's from zero dollars to ten dollars to put a credit freeze in place.

Once you put those in place you don't have to worry anymore, because each bureau assigns you a secret code that's even different for each bureau.

So if this relative you don't trust goes to open a new credit card or whatever, and they don't know your secret code they're shut down cold.

FOR MORE ADVICE FROM CLARK VISIT CNN.COM/CLARKHOWARD