enlarge John Patriquin/Staff Photographer

Edward Alexander, a Maine National Guard recruiter, is living in his parents’ Sanford home after filing for Chapter 13 bankruptcy protection.

enlarge Doug Jones/Staff Photographer

Josh and Jennifer Grant, shown with their children, Sierra, 6, and Sydney, 2 months, say they are making minimum payments on their credit card debt and fear falling so far behind they’ll never recover. Josh Grant is a trucker whose workload is down and fuel expenses are up.

enlarge Doug Jones/Staff Photographer

John Weeks, owner of J.R.’s Trading & Jewelry in Waterville, has filled the pawn shop’s basement with all-terrain vehicles and other expensive items taken in as collateral for short-term loans.

DEBT MANAGEMENT COMPANIES

MANY OF THE DEBT management companies people find advertised on the Internet are scams, so people should protect themselves by choosing a company licensed in Maine, said Will Lund, superintendent of the Maine Bureau of Consumer Protection.

A STATE LAW that went into effect in September allows the state to license companies that meet state standards.

THE COMPANIES, which must place a $50,000 bond, can charge consumers no more than $74 for a set-up fee and no more than $40 for monthly fees.

THEY CAN ALSO CHARGE consumers up to 15 percent of the amount by which the consumer's debt is reduced as part of each settlement with a creditor.

THE AGENCY LISTS the licensed companies online at Maine Bureau of Consumer Protection.

STAYING AHEAD OF DEBT IN 2008

BEFORE YOU BUY something, ask yourself these questions:

• Can I buy it cheaper later?

• Can I buy it used?

• Can I rent or borrow it?

• Can I do without it?

• Do I really need it?

Source: Leslie Linfield, Institute for Financial Literacy in Portland

WHAT TO DO

IF YOU ARE IN financial trouble, you should:

• Answer the phone and talk to creditors. They may suggest solutions.

• Open the mail, even if you are afraid it's only bad news.

• Contact a licensed credit counseling organization. n Get the entire family involved in making a household budget.

• Increase income or reduce expenses.

Source: Leslie Linfield, Institute for Financial Literacy in Portland

 

FEELING SQUEEZED?

For tips on managing money when times are tight, click here.

Second of six parts

WATERVILLE — Josh and Jennifer Grant are still able to make the minimum monthly payments on the $25,000 they owe on credit cards.

But Josh Grant, an independent trucker, says he's increasingly worried that the couple will fail to keep up, setting off a cascade of fees, penalties and higher interest rates that will push the family to a point from which they can never recover.

Jennifer Grant, who is home with a 2-month-old infant while Josh is on the road, says her only comfort is knowing that many working families in Maine today are facing the same situation.

"He gets so discouraged," she says of her husband. "But I say to him, 'Baby, we are not alone.'"

Indeed, thousands of Maine families are in the same situation, burdened with credit card debt and struggling to pay their household bills. Their incomes have not kept up with surging energy and food prices. Some have lost their jobs as companies cut back to adjust to the economic slowdown. It takes longer now to find a new job, and the new one often pays less.

The people who run food pantries and soup kitchens are seeing a surge in the number of seniors and working people asking for help.

Central Maine Power and Northern Utilities report that more of their customers are falling behind on their bills.

Bankruptcy attorneys, repossession agents, credit counselors and pawnshop owners are seeing a surge in business.

At J.R's Trading & Jewelry on Main Street in Waterville, the basement is packed with all-terrain vehicles, motorcycles, snowblowers and flat-screen television sets -- collateral for people who need short-term loans.

Owner John Weeks says more middle-class people are looking for loans. Many tell him they need the money to keep their cars filled with gas or to pay their oil bill.

He says the size of the loans are up 25 percent over the long-term average, and the value of the items they are using for collateral has almost doubled, from $35 per item to $65.

"I see lot of faces I haven't seen in the past," he says. "I have people coming in saying. 'I need gas money to get though the week.'"

At Northern Utilities, which supplies natural gas to 25,000 customers in Maine, the number of outstanding bills has increased significantly since a year ago.

The company examined its receivables -- the number of outstanding bills -- on March 8 at the request of the Portland Press Herald/Maine Sunday Telegram and compared it with the same date last year.

The number of accounts at least 30 days past due has increased 20 percent. The number past-due 60 days has increased 15 percent. The number past-due 90 days has increased 35 percent.

Unlike fuel oil, the price of natural gas has not changed much. The rise in delinquent accounts shows that people are stretched thin, says Sheila Doiron, a company spokeswoman.

"People are having a hard time paying the bills, period," she says.

About 29,000 Central Maine Power customers have not paid their electric bills since December.

That's an increase of nearly 4 percent from the same period a year ago, according the company, which serves more than 590,000 customers.

On April 15, the company will start shutting off power to delinquent accounts, and it is urging people to call to work out a payment plan.

It also appears that more Mainers are late on their car payments.

Stephen Sampson, owner of a repossession agency called Shield Security & Protection Services in Portland, says the company a year ago was repossessing 15 to 20 cars a month. Over the past six months, he says, the company has been repossessing 28 to 30 cars a month.

The number of people who are filing for bankruptcy protection has jumped. Every month in 2007, the number of filings was up significantly over the same month...