Financial News Features

I’ve counseled too many people who bought more house than they could afford because they justified it as an “investment in our future.” Yet, they won’t have much of a financial future if they fall behind on their mortgage, their credit score tanks and they’re fiscally paralyzed because every dollar is going toward this “good debt.”

Howard Dvorkin, personal finance expert and chairman of Debt.com, says creditors don’t necessarily care that you’re feeling bad, but they do want to know the basics of what happened and a general timeline for resolution. “Never just run away,” says Dvorkin. “You can say, ‘I’ve been very seriously ill and can’t make my payments.’ ’They may be willing to work with you. If you have a doctor’s note, even better.”

But here’s the thing, it’s entirely possible that we’re already in a recession, and just don’t know it yet, according to Howard Dvorkin, CPA and Chairman of Debt.com. Economists define a recession as two consecutive quarters of negative growth – which means production drops and unemployment rises. There’s a problem baked into that definition: You can’t know for sure if you’re in a recession for almost six months,” says Dvorkin. “We can read the tea leaves and make educated guesses, but we can’t confirm those until two quarters are nearly over. By then, of course, it’s too late to prepare.”

“There's no question in my mind that we’re in a recession,” Howard Dvorkin, Chairman of Debt.com and personal finance guide, says. “Maybe the economic and technical definitions of a recession haven't hit yet but we're there.”

“It depends not only on your financial situation but also on the kind of lien you have,” says Howard Dvorkin, CPA, and chairman of Debt.com. “The worst ones involve taxes — either property taxes you owe to your state or income taxes to the IRS. Almost always, these need to be paid off before anything else can happen.”

Howard Dvorkin of Debt.com recommends looking at recurring charges such as unused gym memberships or subscriptions.