Definitely see a credit counsellor, but first check with your local consumer protection agency (here it's through the Attorney Generals Office) to make sure they're legit. Nothing could be worse than signing up with a shady credit counsellor and finding yourself worse off than before. Don't fall for payday loans or other quick-relief schemes. And tell your friend you're handling it. My in-laws listened to a 'friend' and filed bankruptcy even though their credit was sterling. The only deal was that they couldn't make their car payment and credit card payments and still have enough to get by every month comfortably. Meaning there was no cushion. They didn't even have their cards charged up to the max, and were not behind on payments, EVER. Their total debt less than $10,000...most of that being the car loan. Some shyster got them to file bankruptcy using scare tactics and the same baloney logic you seem to be getting from your friend. Later, after it was discharged, they financed another car, but because of the bankruptcy they had a very high interest rate. Then those payments got too high for their comfort, so they traded in that car and got the balance added to the new loan (negative equity) so now they drive a car worth no more than $3000 that they owe $17,000 on and their payments were lowered only $20/mo, but spread out for 7 years. All because some one told them to file bankruptcy. How far out on your car loan are you? Can you sell it and get out from under it with any equity? Any way to unload the other party? Or at least make them start contributing? Best of luck, I feel for you!

A local church pre-marital counseling is going to give me a copy of their money quiz, so they can compare their money management styles... What a wonderful idea! Our pre-canna counseling (a million years ago) barely touched on finances. Tinam, you are so right about people retiring with debt--- that has got to be an incredibly stressful situation. Love the idea of a nice looseleaf binder in which you put each person's advice in with a three hole punch. There is a lot of free information available from the federal government about debt and finances, including consumer awareness info. Anything like that could also be punched and included in the binder. A lot of young couples who really don't know much about money would probably benefit from some course like Dave Ramsey's "financial peace university." It is taught at churches and community centers. I haven't taken it but occasionally listen to him on the radio and think he gives very good common sense answers to callers' financial questions.

Learning how money works is an interesting hobby ... and it pays well. Learning how taxes work is an interesting hobby ... and can be profitable, as well. As a financial advisor, for most of those years selling no financial products, I learned a lot from my clients and passed on a number of useful ideas, as well. And, being frugal myself, didn't overcharge for my services. One person, earning about 50K a year, paid next to no income tax. S/he had a number of Canadian stocks, dividends on which are taxed at a low rate. S/he gave around 20% or sometimes more of income to churches and various charities and to support of a political party. The political deductions died with the year ... but charitable contribution credits could be carried over into another year (5 year max) and s/he almost always had enough credits to bring her/his tax load down to near zero. You may have seen my story over on "Money saving tips" or "Household finance" of how to get a dollar's worth of charitable value for about 50 - 60 cents (applicable mainly in Canada) and that assumes gifts originating from one's bank account ... which contains after-tax money. But ... when a Canadian "taxpayer" transfers stock or mutual funds which have increased in value to a charity ... there is no income tax levied against the capital gain. As for my situation this year, a couple of weeks ago I transferred some stock that I'd bought 47 years ago for $4.20 or so to a local charity for somewhere around $95.00 - 99.00 (haven't heard if it's been certified and sold). If it's $94.20, there'll be $90.00 of capital gain and in the ordinary course I'd have to pay tax at regular marginal (i.e. highest) rate on half of the capital gain, or $45.00. Avoiding tax on $45.00 suits me fine ... if I plan to make substantial gifts to charity, anyway. Should have made the transfer a couple of weeks before I did ... before the market drop: oh, well ... one wins a few ... and loses a few, in this life. ole joyfuelled ... with a dollar or so, here and there, to help - preferably pre-tax ones

I have the same pit-in-the-stomach anxiety. We bought an old farmhouse last December and have been fixing it up with the intention of moving in. We paid cash for the house, but have already sunk about $73,000 into "improvements" including a modest master suite addition, new foundation piers, and a wrap-around porch. The remodeling so far has drained a significant portion of our ready savings and yet little work has been done to the interior. I am extremely nervous about the craziness in Wall Street and the economy in general, and am thinking DH and I need to hold tight and don't take on any more financial liabilities so the house may sit vacant for a while. I do like to garden, however, so have planted a considerable number of trees, shrubs and perennials around the house, which makes me feel better when we go over there and makes the house look better as well and overall wasn't very expensive because we did all the planting ourselves. I am good at delayed gratification and can wait until the time is right (if ever) to spend money on something. Like Chelone, I always pay more on my monthly mortgage payment on our current little house and last year at Christmas I paid an additional $1000. I don't like debt and don't have any, other than a mortgage. I think this is a good time to differentiate between needs and wants. As other posters have said, listen carefully to that inner voice. That is your intuition speaking.