Ask Liz Weston

Dear Liz: I am 75, in poor health and live only on Social Security (I get $1,046 per month). I’ve been told that if I want, I can stop making payments on two credit cards that I owe on and will never be able to pay off. Is that true? I can’t afford to file for bankruptcy.

Answer: Normally, when someone stops paying a debt, the creditor will start collection attempts and may file a lawsuit. If the suit is successful, the creditor gets a judgment and can take further actions, such as garnishing wages or taking property.

If your only source of income is government benefits, though, and you have no home or other assets that can be legally taken to satisfy your debts, then generally you’re considered “judgment proof.” That means a creditor is unlikely to get any immediate payment if it sues you in court.

That doesn’t mean lawsuits won’t be filed, however. A creditor may get a judgment against you hoping to get something out of your estate when you die. Even if no suit is filed, you may have to deal with collection calls and letters that can continue for years, even decades.

If you really can’t pay these debts, then you might want to consult with an experienced bankruptcy attorney about your options. Many offer free initial consultations, and they may be able to help you find an affordable way to file your case if that seems like the best course.

So far, 25 states have passed laws allowing at least some of their residents to “freeze” their credit reports, which prevents an identity thief from opening new accounts in their names.

Here’s how it works. The consumer writes to each of the three bureaus, requesting that they freeze his or her report. Such a freeze prevents a prospective lender from viewing the consumer’s report; since most lenders won’t make a loan or open a credit account without seeing the bureau reports first, this effectively shuts down the ID thief. (The freeze doesn’t apply to the consumer’s current lenders, who can continue to peruse the consumer’s reports.)

If the consumer wants to lift or �thaw� the freeze to get credit, he or she uses a personal identification number to do so. Some states require the bureaus to comply within a specified period, typically 3 days.

Some states limit credit freezes to identity theft victims only, but most let any consumer request a freeze. The bureaus typically charge a small fee�generally around $10 each�to institute the freeze and another fee to lift it.

Here’s a list compiled by Consumers Union of the states that have passed laws, their effective dates, cost limits and where you can go for more information. (For updates and more details, please visit FinancialPrivacyNow.org, which is maintained by Consumers Union.)

California
Who: All consumers
When: Effective January 1, 2003
Cost: No fee for victims to place the freeze, others pay up to $10 per freeze; fee to lift freeze capped at $10 for temporary lifting for a time, $12 for temporary lift for one creditor.
For more information: www.privacyprotection.ca.gov

Colorado
Who: All consumers
When: Effective July 1, 2006
Cost: No fee for first freeze; $10 to place a second freeze, $10 to lift, $12 for temporarily lift for one creditor
For more information: www.ago.state.co.us

Connecticut
Who: All consumers
When: Effective January 1, 2006
Cost: $10 to place or lift, $12 to lift for one creditor only
For more information: www.ct.gov/ag/

Delaware
Who: All consumers
When: Effective October 9, 2006
Cost: $20 to place, free to temporarily lift for a period of time or specific creditor and to remove.
For more information: www.consumersunion.org/pdf/security/securityDE.pdf

Florida
Who: All consumers.
When: Effective July 1, 2006
Cost: No cost for ID theft victims (with investigative report) and seniors aged 65 years and older. For all others, $10 fee to place, temporarily lift or to remove a security freeze.
For more information:
www.consumersunion.org/pdf/security/securityFL.pdf

Hawaii
Who: ID theft victims only, with a police, investigative report or complaint filed with a law enforcement agency.
When: Effective January 1, 2007
Cost: None.
For more information: www.consumersunion.org/pdf/security/securityHI.pdf

Illinois
Who: Before January 1, 2007, only identity theft victims. After January 1, 2007, all consumers.
Cost: $10 to place, lift or remove. Free to victims with police reports and seniors 65+ years old do not pay.
When: Effective January 1, 2007
For more information: www.consumersunion.org/pdf/security/securityIL.pdf

Kansas
Who: ID theft victims only, with a police, investigative report or complaint filed with a law enforcement agency
When: Effective Jan 1, 2007
Cost: None
For more information: www.consumersunion.org/pdf/security/securityKS.pdf

Kentucky
Who: All consumers
When: Effective July 11, 2006
Cost: No cost on ID theft victims who provide a police report. Others pay up to $10 to place, remove, temporarily suspend, or have PIN reissued.
For more information: www.consumersunion.org/pdf/security/securityKY.pdf

Louisiana
Who: All consumers
When: Effective July 1, 2005
Cost: $10 to place, $8 to lift, no cost for ID theft victims or persons age 62 or older
For more information: www.ag.state.la.us/calerts/alert0015.aspx

Maine
Who: All consumers
When: Effective Feb. 1, 2006
Cost: No cost on ID theft victims who provide a police report. Others pay up to $10 to place, remove, temporarily suspend, or have PIN reissued, and $12 to lift for a specific
creditor.
For more information: www.consumersunion.org/pdf/security/securityME.pdf

Minnesota
Who: All consumers.
When: Effective August 1, 2006
Cost: No cost on ID theft victims who provide police report. Others pay $5 to place, remove, temporarily suspend, lift for specific creditor, or have PIN reissued.
For more information: www.consumersunion.org/pdf/security/securityMN.pdf

Nevada
Who: All consumers
When: Effective October 1, 2005
Cost: No fee for ID theft victims who submit a police report, for others $15 to place, $18 to lift, $20 to lift for one creditor
For more information: www.consumersunion.org/pdf/security/securityNV.pdf

New Hampshire
Who: All consumers
When: Effective January 1, 2007
Cost: No fee for ID theft victims who submit a copy of a police report, investigative report, or complaint to a law enforcement agency, for others $10 to place, temporarily lift
or remove
For more information: www.consumersunion.org/pdf/security/securityNH.pdf

New Jersey
Who: All consumers
When: Effective January 1, 2006
Cost: No fee for initial freeze. Up to $5 to remove, temporarily lift or have PIN reissued.
For more information: www.njdobi.org/creditfreeze.htm

New York
Who: All consumers.
When: Effective November 1, 2006
Cost: No fees for victims. Free to place first time for everyone. After first time, or to lift temporarily or remove there is a $5 fee.
For more information: www.consumersunion.org/pdf/security/securityNY.pdf

North Carolina
Who: All consumers
When: Effective December 1, 2005
Cost: No cost for ID theft victims with valid report/complaint with law enforcement agency. For others, up to $10 to place, remove, or temporarily suspend.
For more information: www.ncdoj.com

Oklahoma
Who: All consumers
When: Effective January 1, 2007
Cost: No fee for ID theft victims with investigative report and no cost for seniors 65 years +.
For more information: www.consumersunion.org/pdf/security/securityOK.pdf

Rhode Island
Who: All consumers
When: Effective January 1, 2007
Cost: No fee for ID theft victims or seniors 65 years +.
For more information: www.consumersunion.org/pdf/security/securityRI.pdf

South Dakota
Who: ID theft victims with a police report
When: Effective July 1, 2006
Cost: None
For more information: www.consumersunion.org/pdf/security/securitySD.pdf

Texas
Who: ID theft victims with a police report
When: Effective September 1, 2003
Cost: One $8 fee
For more information: www.consumersunion.org/pdf/security/securityTX.pdf

Utah
Who: All consumers
When: Effective September 1, 2008
Cost: Fees must be �reasonable�
For more information: www.consumersunion.org/pdf/security/securityUT.pdf

Vermont
Who: All consumers.
When: Effective July 1, 2005
Cost: No fee for victims; $10 for all others
For more information: and www.consumersunion.org/pdf/security/securityVT.pdf

Washington
Who: ID theft victims, including persons who receive a notice of a security breach of computerized personal information
When: Effective July 24, 2005
Cost: None
For more information: www.atg.wa.gov

Wisconsin
Who: All consumers
When: Effective January 1, 2007
Cost: No fee for victims. Up to $10 for others to place, thaw or remove freeze.
For more information: www.consumersunion.org/pdf/security/securityWI.pdf

How long the states will be able to offer this solution to their residents is uncertain. Some in Congress want a single federal standard for credit freezes that would pre-empt state laws. The problem with federal legislation is that it’s usually less consumer-friendly than

Dear Liz: We are facing a challenge in regard to financing our son’s education. We are being asked to contribute $30,000 a year for a private college education. Is this really a wise move? We have a daughter who will be in college in two years. Help!

Answer: A good education is virtually essential to success in today’s competitive, global economy. That said, there are plenty of ways to get a good education, and bankrupting yourselves on a too expensive college shouldn’t be one of them.

If you can’t manage this bill without sacrificing your own retirement plans or your daughter’s education, then you need to think about some options.

If your son has his heart set on this college, then he should be willing to take on at least part of the cost by incurring student loans. (He should be careful, though, to make sure that his total student loan debt doesn’t exceed the salary he expects to make in his first year out of school.)

Another option, obviously, is for him to attend a less expensive school for at least a couple of years, if not the duration of his education.

The fact that you’re asking this question just months before your son starts college indicates that you haven’t done enough thinking and planning, but it’s not too late.

Head to the bookstore or library and grab a copy of a college financing guide and explore your options. You might also use FinAid.org’s expected family contribution calculator, available at http://www.finaid.org , to estimate how much you’ll have to kick in once your daughter starts school.

Good luck.