How to Get Out of Debt With the Get Out of Debt Guy » Debt Interviews

Talk Credit Radio Interview With Gerri Detweiler

Steve Rhode — Thu, 15 Mar 2012 20:02:08 +0000

Here is the recent interview I did with Gerri Detweiler on Talk Credit Radio.

Listen to Talk Credit Radio Interview With Steve Rhode

I had the pleasure recently to talk with Gerri Detweiler about a wide range of debt related issues and scams. We start out talking about identity theft, fake debt collectors, and then move into a wide range of debt related topics.

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Maryland Attorney General Says Attorney Model Debt Settlement Has Not Risen to His Level

Steve Rhode — Wed, 13 Apr 2011 16:02:45 +0000

From How to Get Out of Debt

Doug Gansler, the Attorney General of Maryland told me in this recent interview I recorded at the National Attorneys General meeting in Charlotte, North Carolina that the FTC TSR had a positive impact in cleaning out the bad actors in the debt relief world and leaving the legitimate companies intact.

Interestingly he said that attorney model debt settlement companies had not appeared on his radar as a problem.

Attorney General Doug Gansler Interview

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Attorney General of Colorado Tells Me There are Several Active Investigations Into Attorney Model Debt Settlement Companies

Steve Rhode — Wed, 13 Apr 2011 15:53:03 +0000

From How to Get Out of Debt

At the recent National Association of Attorneys General meeting in Charlotte I had an opportunity to talk to Attorney General John Suthers.

General Suthers says attorneys should not hide behind attorney fronts and they are proceeding against attorneys since they are effectively debt relief operations.

Attorney General John Suthers Interview

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Humpy Wheeler and I Talk About How NASCAR Got Slammed in these Economic Tough Times

Steve Rhode — Tue, 12 Apr 2011 22:03:07 +0000

From How to Get Out of Debt

Humpy Wheeler was at the NASCAR Hall of Fame for a reception for the recent National Association of Attorneys General meeting in Charlotte, North Carolina.

Mr. Wheeler has played a large role in the growth of NASCAR as the past owner of the Lowe’s Motor Speedway near Charlotte, NC. You can learn more about Humpy Wheeler here.

Recently, in an off-track but still automotive related pursuit, Wheeler provided the voice for “Tex,” a 1975 Cadillac Coupe de Ville cartoon character, in the 2006 Pixar hit film Cars.

I thought it would be interesting to interview Mr. Wheeler and talk about how the recent economic times have hurt a sport with an audience that is primarily blue collar middle income families.

If you have any interest in NASCAR you’ll enjoy his insight and observations. His comments of reducing the cost of the sport and increasing the entrainment value are insightful.

Humpy Wheeler Interview

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My Interview With Attorney General Roy Cooper from North Carolina on Attorney Model Debt Settlement

Steve Rhode — Tue, 12 Apr 2011 21:37:47 +0000

From How to Get Out of Debt

At the recent National Association of Attorneys General meeting I caught up with Attorney General Roy Cooper from North Carolina.

We talk about debt relief services and the attorney model of debt settlement services. General Cooper talks about how the money paid in advance for debt relief services hurts both the consumer and the creditor.

He talks about how working with his Attorney General peers is important to addressing the the issues

Attorney General Roy Cooper Interview

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I Interview Robert Stephan Former Attorney General of Kansas

Steve Rhode — Tue, 12 Apr 2011 21:25:59 +0000

From How to Get Out of Debt

At the recent National Association of Attorneys General meeting I had the pleasure of interviewing former Kansas Attorney General Robert Stephan who served between 1979 to 1995. We talk about how financial issues from the 1980s and today are very much the same.

We talk about the problems he faced while the chief cop in Kansas.

Our discussion of payday loans is intriguing. The issue at hand, are groups stamping out payday loans helping or hurting consumers since there are not many options for people who normally turn to payday lenders.

We also talk about the approach some debt collectors have taken of having people arrested for contempt of court and spend a night in jail.

We also talk about if people should be ashamed about filing bankruptcy.

Attorney General Robert Stephan Interview

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My Walking Tour of Cambridge Credit Counseling

Steve Rhode — Mon, 28 Mar 2011 18:08:31 +0000

From How to Get Out of Debt

Recently I had the pleasure of meeting up with the folks at Cambridge Credit Counseling in Springfield, Massachusetts. I wanted to take you on an audio tour of the office and share with you what I saw.

Audio Tour of Cambridge Credit Counseling

During the tour you will hear me talk to Thom Fox about our previous visit to the prison together to talk with inmates about debt. Here is that past story and interview.

I think when you listen to the tour of the office you will be impressed with the focus and attention to client quality and the emphasis on doing things right the first time.

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Interview With Alex Viecco of New Era Debt Solutions About Their A+ BBB Rating

Steve Rhode — Wed, 01 Dec 2010 21:29:08 +0000

From How to Get Out of Debt

For those in the debt settlement industry I think the following interview with Alex Viecco with New Era Debt Solutions is important.

New Era has just been awarded an A+ BBB rating in an industry where most debt settlement companies have an F rating.

Alex talks about the process of getting their rating upgraded to an A+ and he even shares his thoughts that many debt settlement companies would never be able to provide the data necessary to have their rating reconsidered.

Putting customers first and watching out for the needs of the consumer ahead of the company was a key value in being able to get the BBB to evaluate New Era Debt Solutions based on merit rather than a blanket F.

Alex also states that new FTC regulations were a positive step for the debt settlement industry and helped New Era in raising their grade. The BBB took notice that New Era was now a fully compliant, no advanced fee, and not an attorney model debt settlement company and that provided some value for the BBB.

The tips offered by Alex regarding what other debt settlement companies need to do to improve their rating is helpful.

You can listen to the interview below.

Interview With Alex Viecco

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Transcript

Steve Rhode: I’m here today with Alex Viecco from New Era Debt Solutions. And New Era has just received recently an A plus rating from the Better Business Bureau. The controversy has been that debt settlement companies have been unable to get better than an F rating by the Better Business Bureau. But as shown by New Era’s new A plus rating, it is possible to get a better rating. And I wanted to talk to Alex to find out what was involved and to tell us more about the process. So, thank you, Alex for joining us.

Alex Viecco: Well, thank you, Steve. If you’ve been following our trials and tribulations, it’s been a long, long battle to try and get to this point. And not really to any fault of the BBB’s since there is a vast majority of the industry that was out there taking advantage of consumers. And so, obviously, when you paint the industry with a broad stroke, this is where most people end up with an F. We’ve been trying to work very diligently with our local chapter. But, obviously, the local chapter as well as all the BBB’s are influenced by what the rest of the country is experiencing, and consumers being taken advantage of.   So it’s been a long, long battle. Like most companies in this industry we had a very good grade with them. and as the industry continued to grow and they made the algorithm changes to our industry, it affected us as well. And we went from an A to an F, due to the industry that we were in. It took a long time, a lot of convincing and conversations with our local chapter. And I do want to give them kudos, that in spite of everything that is going on in the industry that they took the time to really do their due diligence to find out more about what we were doing different than perhaps other companies in the industry.

Steve Rhode: So I can only imagine that they asked you for just a ton of information. But on top of that, did they actually come out and take a look at your facilities and talk to staff?

Alex Viecco: Yeah, it took awhile for them to actually come out. We had requested. We’ve always been an open door. We have an open door policy. We welcome anybody from anywhere to come in and take a look at us. But it did, finally the president of the local chapter took the time to come out himself. He obviously had seen, even though we didn’t have that many complaints that our number of complaints had continuously continued to drop. And so he took the time to come out, take a look at us. Chatted with both my partner, Dan Smith, and myself. And looked at our operation, our day to day operation. Walked the grounds and saw what we were doing on a daily operations basis. And, of course, gathered a ton, as you said, of information. They pretty much, they know everything including our blood types, I guess, at this point.

Steve Rhode: Now the BBB noted in it’s change of your grade to an A plus that it has noticed, as you mentioned, a decrease in the number of complaints. Was there anything in particular that lead to the decrease of complaints? Was it a change in attitude or business policy or what?

Alex Viecco: I don’t think it had to do much with any of that. I think what happened is as the industry continued to grow and the consumer’s knowledge of it – and I’m not going to make excuses because some of the complaints, whether they were frivolous or not. We did for a long time, obviously, market the fact that we were with the BBB. And I anticipate even now and in the future, consumers may say, okay, we’re going to use this as leverage. We’ve had a lot of consumers that have gone directly to the BBB in order to try and collect a refund for the services. Not that we’ve ever been opposed to giving clients a refund if they find that they’re not getting their services.   But we’ve never had the opportunity to talk to the clients. So they use that as leverage. And if you don’t know much about how the BBB reports it, they file a complaint against you. It gets on there whether it’s valid or not until you go in there and clear it up. But it still stays on your record. As a matter of fact, two of our old complaints, I believe they’ve fallen off now. Two were complaints from clients that felt we did too good of a job. So go figure that one. We saved them so much money that our fee was a little bit higher than what the creditor got paid. And they thought that was unfair for the creditor. So they complained about that.

Steve Rhode: Well, I guess anybody can complaint about anything at anytime. That’s true. Now what about the company’s – you and I have chatted over the last year or so about some of the cowboy companies out there that have been, not necessarily been doing the best job. Do you see that those companies could pass the muster that you went through? Would they be able to improve the rating?

Alex Viecco: If everybody in our industry had to provide all the information and data that we had to provide – I would say that in any industry. Forget about just our industry. I would find it very difficult for most companies to be able to get to that point. Like I said, it’s been a long process. I’m particularly proud of our company for having been able to persevere in this thing. But it’s a lengthy list. And I would say most of the cowboy companies that are out there certainly wouldn’t even want to entertain the list, let alone try to meet all the requirements. The other thing that is worth considering is the fact that I know there are companies out there that may have decent ratings still that have figured out a way around the algorithm.   Maybe by putting themselves as a different type of business. I think one of the things we’re going to see a huge growth in is a lot of, so called, attorney models. And the algorithm for an attorney is certainly very different than in most other financial services companies. So just the fact that they’re an attorney model may put them in a better criteria to begin with. Which hopefully the BBB will wake up to that little scheme relatively quick to protect the consumers.

Steve Rhode: In fact, I think I wrote about legal helpers a couple weeks ago and looked at their BBB rating. I think they had an F. So I–

Alex Viecco: I’m not sure. I haven’t checked it. I can look it up but I haven’t checked it recently.

Steve Rhode: You have to look at their Chicago rating because they have ratings all across the country.

Alex Viecco: Okay.

Steve Rhode: So if a company was just starting out today and they wanted to improve. They’re seeing that you now have an A plus. And they know logic only is that you’re going to market the hell out of that and you’re going to use it to tell people you are an A plus agency with the BBB. And that’s great. But if somebody else wanted to get an A plus rating too, how long do you think it would take them? A year? Six months? What?

Alex Viecco: That’s hard for me to be able to answer that question, Steve. It’s all going to be determined and based on their particular jurisdiction that they’re working with. And the suggestion that I would have is to build a relationship with your local BBB. One of the things that I think this industry has been affected by is the secrecy of it all. A lot of companies did not want to put their head out there, head and shoulders above other companies because they thought that they were going to have a target on their back. I think one of the most effective tools for us is to really be transparent. Kind of like what we started talking to you, our transparency has really helped us in many ways, with our relationships with consumer groups, with consumer advocate groups, consumer advocate individuals, like yourself.   When you become transparent – and we’ve always been transparent but we now are more than ever absolutely transparent with everybody, the consumers and everybody else. I think it literally put some people a little more at ease where they’re willing to go out more on a limb because you’re not working hand in hand with them to protect the consumer. Ultimately, I think every industry, certainly in our industry, every company needs to put the consumer first. If we all focus on putting the consumer first, I think everything starts falling into place.

Steve Rhode: Well, if you don’t have an A plus rating and you continue to market with a less than desirable rating, do you think that’s going to affect companies? Now that you have an A plus rating–

Alex Viecco: I can tell you unequivocally the dropping grade has cost our company millions of dollars. Absolutely. And we did manage to maintain the numbers, the data, because we understand. And the sad thing that I believe about the rating is not whether a company got a better grade or this or that or whether the BBB made a mistake or not, I think ultimately – and going back to what I just said, if we all just keep the consumer in mind and make the consumer the priority. Then if the Better Business Bureau and whatever chapter they’re dealing with does their due diligence and sees that the company is doing the best for the consumers, then they’ll get whatever grade that they deserve to get.   But I think one of the most important things is if that a BBB branch does not do, per say, their due diligence and they rate everybody the same, many of the clients that I know for a fact, ended up going to some of these cowboy companies. And ended up getting taken advantage of. Could have been serviced properly by our company but, of course, because we were all painted with an F, it made it very difficult for consumers to find out. I believe that with the recent changes and maybe spotlight on the BBB, there will be opportunities for consumers to start getting more accurate information in their hands so they can make better decisions for their lifestyles.

Steve Rhode: So if a debt settlement company has not been gathering or tracking data at this point, what is the most important data for them to track in order to eventually give it to the BBB?

Alex Viecco: Results. I think the one thing that will overshadow all questions is the results. When you’re able to provide people results it puts a lot of people’s minds at ease. Because there’s a lot of people that claim a lot of things. I’m just answering an email right now from a consumer that says that they’re going to go to another company because they were told that they deal with a certain creditor that we know for a fact does not settle. Those are the things that, unfortunately, consumers – consumers need to do their due diligence. And I think as the BBB starts looking at this industry more as a legitimate thing now with the FPC, the PSR ruling, it will put consumers more aware. So they can start looking for ratings as a way to start helping them make better decisions.

Steve Rhode: Did you bring the fact that you had resign from task so publicly to the BBB’s attention?

Alex Viecco: Yeah, as soon as we resigned and you and I had the interview, I sent that to my local chapter. I’ve been keeping them very much abreast of everything that we’re doing in an attempt to certainly, as I mentioned earlier, to be very transparent.

Steve Rhode: So, congratulations.

Alex Viecco: Thank you very much.

Steve Rhode: I guess there’s nothing else to say but congratulations. It’s been a long hard battle. And you worked hard for the A plus. And while there has been this recent 20/20 expose about the BBB, I don’t think that we want anyone to assume that you got a pity A. [Laughter]

Alex Viecco: No. If I were to list the number of things that I had to provide to our local chapter – and not only that, let’s not forget that we’ve been doing this for a decade. So they have a decade worth of data on our company and the numbers available. I think, again, I’m going to give out local chapter a lot of credit for taking that initiative. Because, for the most part, they didn’t even want to accept anyone in debt settlement into the accreditation or membership process. But I think through perseverance and being able to demonstrate our absolute willingness to work always with the consumer in the forefront, they were able to reconsider that.   But it certainly was with a lot of information in their hands to allow them to make that decision. So, hopefully, we’ve opened up the path to opportunities for other legitimate, true, PSR compliant companies to be out there and start forging forward towards a better grade. But certainly, yes, I want to take advantage of this and make up for a lot of lost time and help a lot more people that deserve to get the kind of help that we provide.

Steve Rhode: It’s interesting. If we take a look at the companies that have an F rating now, a lot of them – I shouldn’t say a lot. There are companies in that pool that do not necessarily have the consumers first. And not matter what, even if there is a process to improve the rating; do you think those companies would ever go through the introspection that you went through in order to improve it?

Alex Viecco: No, I guarantee they wouldn’t. Absolutely not even possible. Because part of the criteria is to be able to provide the proof that consumers were benefiting from your program. Well, how are you going to get the proof when all you’re doing is taking consumer’s money and running.

Steve Rhode: So on top of having that A plus BBB rating now, where does providing exceptional customer service fall into that? Is that the number one goal at this point of New Era?

Alex Viecco: Well, I mean, I would say not only is it now but it always has been. And if you take into consideration the fact that we’ve always been performance based. Which I believe is the most logical way to operate any business. You don’t go to the dentist and prepay for your services. Certainly, I don’t believe that. To me, it’s always been puzzling how people are willing to pay 15, 18, 20 percent of the debt load in advance of getting any results delivered. I don’t know how people make the decision and that makes sense. But I guess lots and lots of companies made a lot of money off of consumer’s ignorance in that way. We just never operated that way. So for us, it’s always been based on performance. And when you’re talking about performance you got to be there to deliver true service for the consumer.

Steve Rhode: Well, again, I applaud your ability to get the A plus and to show that through performance and customer service that there are exceptional companies out there. And I hope that people seek you out.

Alex Viecco: Thank you very much, Steve. I really appreciate it. And, yeah, we want to continue to be the leaders in this industry to show people that there are absolute leaders in this industry that are willing to do what it takes to really provide the best service for the consumers.

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My Interview With Adam Baker From ManVsDebt.com

Steve Rhode — Wed, 13 Oct 2010 14:01:01 +0000

From How to Get Out of Debt

Adam Baker is a brave soul who places his financial reality out there for people to gawk at. Along the way he’s created a really nice blog at ManVsDebt.com and has a lot of good advice to share regarding doing better financially.

Recently I had an opportunity to interview him via video link and got a chance to discuss how he managed to break free from his debt, find happiness in having less, discovered he could dream hos way to a better financial future and we talked about how to unautomate your financial life.

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Transcript

Steve: With me today is Adam Baker from the Web site Manvsdebt.com. Adam, who goes by Baker, lives an adventurous, insightful and somewhat torturous financial life. He’s laid it all out there for readers to see in the past, and he’s gone so far as to list his income and expenses each month to allow readers to poke internally inside his financial life. Welcome, Baker.

Adam Baker: Thank you. What an amazing introduction. I will try to live up to that. That was a good one.

Steve: You know, your Web site is Man vs. Debt, but I wanna make sure that everyone understands that the URL is manvsdebt.com.

Adam Baker: That’s correct, that’s correct. Man vs. Debt, man-v-s-debt.com.

Steve: You know, it’s amazing how many people can’t spell debt.

Adam Baker: [Laughter] This is – some people have asked me before when I’ve told them, they said, “Your site is what? Man vs. Death?” I was like no.

Steve: [Laughter] I know. I get debit, dept, death, everything.

Adam Baker: Yeah.

Steve: Well, your financial journey has been an interesting one, and I’ve enjoyed being along for the ride. I think we first met on Twitter through maybe our mutual friend Matt Jabbs.

Adam Baker: Yeah, very early on.

Steve: Yeah, who does a lot of stuff. And you’ve not always been so self-aware about your debt in your life. When did that switch flip in your head that getting out of debt became a priority?

Adam Baker: Well, I always would like to say that one day I looked in the mirror and I just realized I needed to get serious, but it really wasn’t me. It didn’t come from inside me. It came from the birth of our daughter, and so we had an external source, which so many of us need to make different changes in our lives. Sometimes we need a kick in the butt from outside ourselves, and for Courtney and I that was definitely the birth of our daughter. And when we brought her home from the hospital, we had knew we needed to get our personal finances, I guess I could say, we knew we needed to be more conscious about our personal finances, but we just didn’t have the kick in the butt. And so that was for us the birth of her and we looked at our life and said we’re willing to be risky. We’re willing to be unsustainable when it was just Courtney and I, but we’re not willing to leverage the future of Milligan, the future of our daughter to live an unsustainable lifestyle anymore, and so that was really the big change.

Steve: Did you ever have – since you’ve been so open and sharing, I’m gonna ask you a very personal question.

Adam Baker: Go ahead. Yeah, hit me.

Steve: Have you ever had a moment when you’ve had past-due bills or in collections and that created an “oh, shit” moment for you?

Adam Baker: I always like to tell people we were not in desperate financial situations. As you know on your site and a lot of your readers that there are some people that are in very, very desperate situations. We never had a problem putting food on the table. We have had paid late bills before but not where things were in collections and debtors were calling us. Just the normal like, oh my gosh, I didn’t realize we didn’t pay this this month, that kind of thing where it would go one or two months. But we weren’t being haggled or hassled. We weren’t in desperate fire situations. But I think without the birth of Milligan, we may have just unconsciously found ourselves in that situation not too much longer. So we turned it around at about the right time.

Steve: Not that long ago you were living in New Zealand and I was tracking your travels all around the world. Now you’re back in the US. What’s your life like now?

Adam Baker: Well, we did. We took a year after we paid off our consumer debt and decided to spend the year traveling abroad, and that was a really interesting time for us from both the personal finance standpoint, from a consumerism standpoint while we were mobile.

When we came back to the US, we decided that we were gonna take a little break from traveling. We had been fairly mobile during our travel and we had – Milligan was one at the time – and so we had a lot of ups and downs on the road and we said you know what? We’re gonna take a break. We’re gonna take a six-month break, move back and visit with family. That was probably a good decision. The bad because we had our guard down.

And when we came back, we rented a three-bedroom house, which was way more than we needed. And we immediately had seven rooms that we needed to fill with stuff and we had two backpacks of stuff, so we had nothing and so we started back into that kind of consumerism unconscious lifestyle. Not a whole lot but for us we had done so well at getting momentum in our life that we kind of had a little bit of a relapse.

And I’m not blaming that on the American society, although our consumerist society definitely makes it easy to relapse. So now we’re sort of realized, hey, let’s not fall back into that trap we were, and we’re sort of taken that dip and we’re trying to head in the right direction moving forward.

Steve: What was that process like for you when you realized all of the sudden that you were spending and accumulating to fill a physical void?

Adam Baker: I rejected it at first, right? You know, I run a financial Web site. [Laughter]

Steve: Oh, yeah. Not you. [Laughter]

Adam Baker: No one can know, especially. So we rejected it at first thinking that it wasn’t – things weren’t out of control. We still knew where things were going. We still knew where money was going. And then it was just fed up because it was one of those things like you know better. Okay, not only for the site, ’cause that’s never our motivation, but in some respect the site did help with the accountability. I’m like I’m writing about this. I have a community of people who like think my story’s inspiring. What am I doing to myself here?

And so I never do anything for the site, but this was one instance where the site kind of kicked me in the butt again. You know, some of that external influence said, hey, not only do this for yourself, but you built this community of people that are kind of counting on you to not slack off here. And these are our own goals anyway so that was kind of the though process when we went through it. [Laughter]

Steve: Was Man vs. Debt your fulltime gig?

Adam Baker: It is and actually Man vs. Debt has been my fulltime gig the entire time. Now, I say that and I’ve gone through periods of creative burnout like I’m sure you’re very familiar with. [Laughter]
Steve: Don’t we all?

Adam Baker: Yeah but I sold my property management business, which was what I was into before Milligan was born. I sold that when she was born, and I was a stay-at-home dad for six months, and then I was a stay-at-home dad/blogger/traveler, almost fulltime traveler, for the next 6 to 12 months. So I’ve been freelance writing as well, but between freelance writing and Man vs. Debt and Courtney teaching here and there, that’s been our fulltime income so…

Steve: Your focus is on how to do better financially while mine is all about helping people dig themselves out of the immediate. I feel like I’m the emergency room and you’re the general practitioner.

Adam Baker: [Laughter] That’s very good, very good.

Steve: I thought it’d be interesting for me to read a reader question from the Getoutofdebt.org site and then put both of our brains into the fire.

Adam Baker: Sure.

Steve: Okay so Rebecca writes, “A year ago, my pay was cut 40%. I spiraled into debt and now I’m $23,000.00 in credit card debt. I’ve kept my rent, car, phone current but was unable to make the minimal payments on the credit cards. I’m in a situation where I can start to pay them back, but I don’t know where to start. Please help.”

Adam Baker: That’s a tough situation. It sounds like at the beginning of that question I thought she was gonna blame external influences. Like I thought she was gonna blame the income and start to project that away, but then she finished up by really taking accountability for it. She paid what she could when she could and she let the things – the non-necessities slip. And so I think that’s a really empowering example of kind of how to take that hit and keep going.

So my advice to her on where to start would be to, first of all, she has to know who she owes and how much. She has to understand the problem before she can decide how to tackle it. So I would go to Annualcreditreport.com, and I would pull a free report if she hasn’t already used that up from all three bureaus. Hopefully, she has that available to her. If not, I would pay for a credit report because she needs to look at that and get into it.

I would sit down if it’s just her, hopefully, with a friend or with someone that she trusts and that is a good financial influence and that will donate a couple hours of time to really help her plan out how much she owes, where’s the interest rates and how to get in contact with those people.

Steve: So accountability, that’s always good.

Adam Baker: Yeah, have somebody else ’cause she didn’t mention being married. She didn’t mention any of that stuff, so I have a feeling that she’s overwhelmed from going at it alone, but that’s an assumption. But if she didn’t have anyone there, get a friend. Get somebody else that’s gonna kind of help her through and maybe even provide some advice.

And how I suggest that she pays off debt is that she sends at least a little bit of it. It depends on how long she hasn’t been paying, I should say. If she hasn’t paid them in a long time, I would not wake them all up at the same time. I would choose the one that she was most emotionally attached to. That’s just my option for paying off debt, so if there was a small debt that she knew she could knock out or there was a certain debt that she just hated herself for getting into – maybe she owed a family member or something like that – I would suggest she start there.

By default, then, if she doesn’t have any emotional attachment, I would suggest she started with the smallest debt and that’s how we proceeded, and that’s what I would suggest to her, and then pick two or three and wake those up at a time and start sending them the minimum payments, get those caught up. When she can afford to wake up another one, wake up another one. But through this all, make sure she has an emergency fund so it doesn’t all blow up in her face. So that’s a lot but that would be where I would start.

Steve: You come at it from a good point and that is I think that you realize that debt is not about the credit card. It’s about the underlying issues that got you into debt. And one of the things that concerned me in her question was that she said, “I spiraled into debt, and I’m now $23,000.00 in credit card debt.” And one of the things I’m gonna talk about coming up is budgeting, but in a situation like this, I think an awareness about how you got into debt, kind of that financial autopsy about what led you into that situation is important so that you don’t repeat that situation again.

Adam Baker: Absolutely, absolutely. That’s a great point because $23,000.00 in credit card debt is a lot. And that’s what I said at the beginning when she said, “I lost my income and I spiraled into debt.” I thought take responsibility, but it seems like she was taking responsibility towards the end. So I think breaking that down and seeing where it came from will help her take responsibility, will help her say, “You know what? I lost my income, true, but a lot of this was because of choices I made.” And like you said, breaking that down is a great way to do that.

Steve: Recently you released a book that people could buy on your site and they could download. You were kind enough to send me a copy of it. It looks great. I read through it all. In the interest of total disclosure, I want people to know that if they go to manvsdebt.com, I get nothing. [Laughter] There’s no commission from that, but I’m plugging the book. I’m plugging the download because I really like it.

Adam Baker: Thank you.

Steve: And I’ve read through the book, but I thought it would be meaningful for you to describe the benefits of how to unautomate your financial life.

Adam Baker: Unautomating your financial life is sort of a fun term. I don’t know if anyone used that automate, but that’s the term that Courtney and I applied when we really sat down and started to break into our financial life. And there were two big components of unautomation for Courtney and I. The first was the actual tangible simplifying of our financial life. That involved simplifying our financial accounts. That involved cutting up our credit cards so that we did not have those accounts and those avenues in our life. That involved a lot of just paring down the possessions even, a lot of just simplifying how we approached our finances, budgeting by hand, that kind of thing.

The other aspect of it was just making sure that we were much more conscious of our choices in our spending, and these went hand-in-hand. The more simple we made the tangible aspects about dealing with our finances, we found the more conscious we were of our spending choices. And so those two elements – an increase in consciousness, which we could talk about this for however long you wanted, but there’s a lot that went into that increased consciousness. And then there was a lot of things that we chose to do to actually simplify our tangible accounts.

But doing those two things hand-in-hand is what we call unautomating our finances. Getting more in touch with your finances is sort of a fufu way of saying it, and that’s what the guid is about. It’s our process, our journey, our exploration and all of the juicy tips and strategies that we found that came out of it, sort of like a personal finance thesis, if you will, of…

Steve: There’s a lot of value. There’s a lot of tactile value in not paying that bill online but actually using an envelope method, where you’re stuffing the cash in the envelope.

Adam Baker: Yup, yup. I tell a story in the book about being in the grocery store, and when we used to swipe the credit card, we used to think can we pay this at the end of the month? And then, of course, the answer was always yes like, oh yeah, we’ll come up with it ’cause it was unconscious. There was multiple layers. When we used our debit card, we said do we have enough money in the bank because we didn’t wanna bounce it.

Steve: Right.

Adam Baker: And so that was still a layer but a little bit less. We more consciously had to think do we actually have the money for this. But when you actually sit with an envelope in cash, it sounds elementary. It sounds like I don’t need this. I’m an adult. But when you actually look at it and you’re like the bill is $80.00 and I have $60.00 in my envelope, there’s no better slap in the face than, hey, you aren’t budgeting. You need to put something back. And when you’re a 26-year-old with a kid and you run a financial Web site and you’re putting stuff back at the grocery store, then all the sudden it kind of hits you that, okay, this is for real. I’m doing this because I want to because I want to budget my money so I can spend it in better ways. So I’m the one leading this, but this is the most tangible way to do it. And so it’s those kind of things that helped us unautomate or simplify our financial life.

Steve: In your book you talk about dreaming, dreaming being important. I always think that in getting out of debt you need to know what the goal is. You need to know where you’re going so you can plan the journey. What’s the benefit of dreaming for you?

Adam Baker: I think that we found out that the bigger we dream, the more quickly and the more easy it is to get out of any problems that we get into or to just accomplish our general goals. When we decided to sell everything we owned, pay off $18,000.00 in debt and spend a year traveling abroad, that was very, very ambitious for us. We had – that required us to live on about a third of our income, which we would’ve never – if we just wanted to say you know what? Getting out of debt is good. It’s good for you. That’s why I can’t lose weight ’cause I keep thinking that losing weight is good for me. That doesn’t work for people or for most people, I should say.

Steve: That doesn’t work for me. [Laughter]

Adam Baker: Yeah, people don’t get wealthy because it’s good. It’s because they attach extreme emotional value to something. Sometimes it’s bad, and that’s obviously not what we wanna do. And other times you can set positive goals for your life and then attach those emotionally. So to make it really tangible, we did things like put pictures of Milligan on our credit cards when we were trying to pay them off so that every time we went to use our credit card, bam, there’s our daughter. She was the impetus for our turnaround. She’s the reason why everything we do. She’s the reason for everything we do, but this was very motivating for us and –

Steve: Did it stop you?

Adam Baker: Sometimes, sometimes. I can’t say we never made an impulse purchase, but at times it did where we looked and thought about that. Other people do dream boards or they change their background or they change their passwords to “debt free.” Don’t put all your passwords to debt free, but you know what I mean? Their passwords, their desktop, their poster on the wall were all pushing them to accomplish their financial goals, their immediate financial goals. And that’s what we did, and we surrounded ourselves with sites like your own when you’ve been going way before I got started. Gurus like Dave Ramsey, which I like most of what Dave has to say, another personal finance influences and authors and we surrounded ourselves and we pushed ourselves to help us meet that emotional goal that we set.

Steve: Your site and your messages resonate with me because they seem to be where the endgame is about happiness, achieving happiness. Now, you’ve had a lot in your life and you’ve had very little. You’ve had a backpackful in your life. When have you been happiest?

Adam Baker: Well, that is, first of all, a great question and a great setup that I find it very hard to gauge happiness itself, but I can tell you for sure when I felt the most in line with my purpose, in line with my passion and most secure in my element and that is when we had less stuff. And I guess the thing was we thought it was gonna make us more vulnerable. We thought that not having things was gonna make us weak, was gonna be a hurdle we had to overcome like how are we ever gonna live without these things? We can figure it out. That was our approach.

And what we realized was the far, far majority of things when we got rid of them actually made us more secure, actually made us less vulnerable because we no longer relied on, oh, I need to have this gadget or I need to have this thing. We tapped into ourselves. We were more resourceful. We had forced flexibility, as I like to call it, where we didn’t have a choice but to learn how to be patient. And that was a big, big thing for me traveling with very little things is that I learned to be flexible and patient, and I feel like I’m a much better husband, father, teacher, student. I feel like I’m a much more well-rounded person because of that experience.

Steve: Yeah, it’s interesting. People don’t realize that you don’t own stuff. Your stuff owns you.

Adam Baker: Exactly. One of my favorite quotes on the topic.

Steve: And when I did an article awhile ago, but it was about self-storage facilities and the explosion in America in self-storage facilities ’cause people have to buy stuff they don’t use and pay to put it in a place they don’t go to.

Adam Baker: Yup, yup, I saw when I was researching for a different project I was doing, I saw a statistic that now, as of last year or something, that every person in America could stand side-by-side under the roof of self-storage in America and fit. And so we have enough self-storage for all of us to fit under roofed storage in America, and so that was pretty fun statistic that I came across, eye-opening how big of an industry that is.

Steve: About four years ago, I moved to England. And in doing that – we lived there for a couple of years. But in doing that, we probably got rid of 95 percent of our stuff, so my journey was a little bit like yours. And at one point in the beginning it was hard parting with it. I put the stuff on Craig’s List and people would come and we’d barter and stuff. And then we got to the point where people would come and I would just say, okay, whatever, take it. And then we got to the point where we just gave it away.

Adam Baker: Yup.

Steve: [Laughter] Because it was amazing how freeing that was to get rid of your stuff and to live with a lot less. And now I probably don’t do as good a job at watching the accumulation of all that small stuff. But you’re absolutely right: Your life doesn’t become worse when you have less. It becomes better.

Adam Baker: Sure and I think it’s important – what you described is exactly what happened to us. We went in layers, in surges. Like the first layer was sort of a little bit tougher, and then once we got rid of that stuff, there was like a new level of stuff and we’re like, oh, here’s more stuff that we can sell. We thought we got everything the first time, and then we just kept going in waves and we kept selling stuff.

But I think that it’s important to always inject in this conversation that different people are gonna have different items in their life that are important and that are valuable and that are worth keeping, and I call it stuff versus crap. Everyone has stuff and everyone has crap. And the key is to be able to honestly tell the difference between the two and that’s very hard. But something that’s stuff in my life may be absolute crap in your life. It would just be wasteful. It would take your time and energy away from you instead of helping you get more of that and vice versa. You probably have several things in your life that I would be, oh, this is crap. Let’s sell it. And you’d be like, “No, no, no, this brings joy and value into my life. I wanna keep it.”

And for each person, you don’t have to sell everything you own and travel to Australia. That’s not the message. The message is that there is – most of us have crap in our life, and we don’t know how to find that line. And when we do, our life is much more beneficial when we can purge that excess layer.

Steve: You know, it’s funny in my journey in doing that, a lot of stuff we ended up giving away to friends: furniture and stuff around the kitchen and things like that. What’s now odd is that when I go visit them and I go to their house and I see my old stuff there…

Adam Baker: [Laughter] Okay.

Steve: How did I miss that? [Laughter]

Adam Baker: The sentimental attachment creeps back in. You haven’t missed it for three years, but as soon as you see it again, you want to have it. I mean, it’s just weird how that phenomena works, how we attach that emotional value to our things where when they’re gone we don’t need them. We never missed them. But once we start to see them again, we’re like hey. And that’s how advertising works, right? [Laughter] That’s how we find ourselves buying things and in debt is we’re bombarded with that kind of thing every day.

Steve: So let’s talk about saving for a minute. When people are trying to dig their way out of debt, they’re dealing with that. They’re living hand to mouth. They’re living month to month. People don’t think that saving is important at that stage in their life. They’re just trying to meet all the minimum payments.

Adam Baker: Yup.

Steve: But tell me what priority saving has when you think about getting out of debt.

Adam Baker: I don’t know about you, but I honestly feel that the most important thing that somebody could do – and I kind of threw it in at the end of that reader question that you tossed up to me – that the most important financial tool or technique in anybody’s situation is an emergency fund, is a liquid emergency fund. And it’s A) the process of actually building it. For most people it’s eye-opening and game-changing if they could actually save up $1,000.00, if they can actually save up $5,000.00 cash and not touch it. So that process of learning how to do that is important and just the having it there for emergencies.

That key aspect of it is insane because most people do “spiral” into debt because of some sort of illness, because they were already living unsustainable, so let’s not give them full credit, but then they did lose a job or they were already living unsustainable and they did have a medical bill. And they feel that it’s just the medical bill that put them over the edge, but it’s really that they were building up this unsustainable.

And for me, for Courtney and I, the building of our first emergency fund radically changed how we approached and how we psychologically thought about the process of paying off debt and saving, so we did $1,000.00. That was influenced by Dave Ramsey. We did $1,000.00 and having that in the bank where we needed it – we “needed it” – we needed it but we weren’t touching it and weren’t going to touch it. That was game-changing for us.

And so I am not – we are right now in a big saving mode. We do not save for retirement right now, and I have no qualms about telling people that. But the liquid savings, the emergency fund, is a core part of our financial strategy right now and I think is one of the biggest tools people can use at the start of their journey.
Steve: Yeah, if you don’t have the emergency fund and anything happens – car goes, tire blows – it goes right back on credit. You’ve eroded all the progress.

Adam Baker: Yup, yup and you’re right back into that cycle.

Steve: All right, Baker, it’s been a real joy. I’ve taken up quite too much of your time.

Adam Baker: [Laughter] Not at all, not at all.

Steve: I’m a real fan of your site, and I just can’t wait to see where you’ll go next.

Adam Baker: Well, thank you, Steve. As you know, early on, like I said, you’ve been doing it a lot longer than I have, and your site was a big influence on me in getting started. So it’s awesome to finally get the time to talk face-to-face, and I appreciate you having me on for the interview.

Steve: All right, thanks.

Adam Baker: Thanks.

Steve: All right.

Co-Founder of ReadyForZero.com Shares Details How They Could Revolutionize the Need for Credit Counseling

Steve Rhode — Tue, 14 Sep 2010 21:26:06 +0000

From How to Get Out of Debt

Today I spoke to Rod Ebrahimi from ReadyForZero.com. ReadyForZero.com has big plans to allow consumers to create a self-directed credit counseling program that will eventually work closely with banks to extend special terms to participating consumers.

If they can pull this off they could potentially revolutionize the credit counseling world by providing a web portal to login, create an optimized debt repayment plan with special terms, help people to save money as they go, pay bills, and watch your credit at the same time.

It’s very early days for ReadyForZero.com but these guys have a shot at a great debt relief product if they can work out deals with major creditors for reduced interest rates and credit counseling terms. They have a potentially good chance of pulling this off if they can deliver this product without charging a fairshare or fee and that will really get the attention of the banks.

This possible no fairshare fee model may be reality if ReadyForZero.com develops an alternative revenue model that is not dependent of creditor fairshare or monthly payments from consumers. If they can pull that off leverging technology they have a killer opportunity to revolutionize the debt relief credit counseling world.

You can listen to my interview with Rod below and find out how to get on the waiting list for the next wave of early testers.

Listen to Rod Ebrahimi from ReadyForZero.com

@GetOutOfDebtGuy

Interview with Alex Viecco from New Era Debt Solutions on How a Performance Fee Model Can Work

Steve Rhode — Tue, 29 Jun 2010 21:08:34 +0000

From How to Get Out of Debt

Here is an interview with Alex Viecco from New Era Debt Solutions that I recorded today. Alex talks about why the performance based debt settlement model works well for the long-term and a bunch of other issues that are brewing right now.

The story about New Era that I mention can be found here.

Alex talks about how and why some of the upstart debt settlement companies appeared in a flurry after the downfall of the subprime mortgage market. He also says he understands why they want to collect and take fees in advance of performing the service to improve their cash flow.

He discredits the statement that at least one debt settlement trade association made that a performance fee debt settlement approach would result in less favorable settlements for consumers and says that carrying clients while waiting for settlement is just the cost of doing business.

New Era has been in the debt settlement industry for a decade and when they started the debt settlement industry was a performance fee industry and only because of the influx of new companies in the debt settlement field did companies actually switch the model to collect fees upfront. And that’s what regulators and legislators want to prevent.

Alex latter speaks about the danger to consumers who may be enrolling in an advance fee debt settlement program today when the majority of those companies will probably fail and close with the introduction of regulations that prevent the collection of advance fees. The failing debt settlement companies would leave the consumer stranded and losing all the fees paid before service is delivered.

The attorney model was discussed as well but New Era does not feel that an attorney model alone is the mark of a company that operates in the best interest of the consumer.

Despite the fact that Alex runs New Era Debt Solutions he welcomes debt settlement regulation.

You can listen to the interview below.

Interview with Alex Viecco from New Era Debt Solutions

@GetOutOfDebtGuy

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Northeast Settlement Group – Small But Transparent

Steve Rhode — Mon, 28 Jun 2010 20:16:19 +0000

From How to Get Out of Debt

Recently I was contacted by Andy Faria of Northeast Settlement Group. He wanted to share with me the approach of his debt settlement company and their approach of basing their fees on the actual performance of his settling debts instead of collecting large fees up front.

While his company is small he is able to provide help and assistance to consumers on a contingency fee basis. The larger debt settlement companies say doing this is impossible, but yet here is an example of a company that is.

So let’s get the basic information out of the way.

Northeast Settlement Group, LLC is located at 320 West Main Street, Norton, MA 02766 and the company was formed on January 26, 2009. Andy Faria is the managing partner of the entity and his cousin, John Faria, is the other partner. Andy says that as of right now they have five other staff members as well.

The website of the company is settleshort.com and their telephone number is 866-794-1869.

They state they offer assistance in Connecticut, Massachusetts, Rhode Island, and New York. But according to Andy Faria 95% of the clients are in the Massachusetts and Rhode Island area.

My Interview With Northeast Settlement Group

I had the opportunity to speak with Andy Faria from Northeast Settlement Group and we talked not only about his company but also about some of the positions put forward by TASC and USOBA saying that the debt settlement industry needs to remain as an advance fee industry where consumers pay years in advance for services they may never receive.

Andy’s position is that it is ridiculous for debt settlement companies to claim consumers would be harmed if they were being charged when settlements are actually agreed to and creditors would be a lot more willing to work with contingency fee debt settlement companies even though the debt settlement trade try to persuade people they would not. Andy speaks out that those positions by other debt settlement companies and says they make no real sense.

We talk about how long people should be in a debt settlement program and Andy feels nobody should be in a debt settlement program for three years. The shorter the better in a debt settlement program he feels.

Andy talks about why debt settlement companies need to move towards a model where they are earning their fee on a contingency basis and he also believes that debt settlement companies who will survive industry regulation need to ditch the big advance fee model as quickly as possible.

You can listen to my interview with Andy Faria below.

Andy Faria of Northeast Settlement Group Interview

Northeast Settlement Group Wants to be a Good Guy in a Troubled Field

Andy and his Northeast Settlement Group want to show consumers they are good players in an otherwise troubled industry. He has embraced my call for transparent in the debt settlement industry, which you can read here.

Here are the answers to my transparency questions as given to me by Northeast Settlement Group.

Debt Settlement Program Fee Structure
- SettleShort Elite Program:
  The client will be charged a monthly service or maintenance fee of $25/mo for account handling and documentation processing. All clients will be offered the use of a Notworld Reserve Account, the monthly fee for this is $12.50. Our program fees are collected when debts are settled and paid, for example, when a settlement is established with a creditor the funds are allocated from their Noteworld account to settle the debt as well as our service fee. We will charge 20% of the amount we have saved the consumer/client spread evenly over the following 3‐6 months.
  
  Example: A consumer has a $10,000.00 credit card debt and we arrange a settlement of $3,500.00. We have saved the consumer $6,500.00 of that debt. Our service fee is 20% of $6,500 which equals $1,300.00. Both the payment to creditor and NESG will be furnished through the consumers Noteworld reserve account, the total cost to settle the original balance of $10,000.00 would be $4,800.00 (48% settlement).
  
  The monthly payment is calculated based the following criteria;
  Amount of enrolled debt
  Desired length of program
  
  The monthly reserve payment is calculated utilizing this formula;
  Total Enrolled Debt x .55 (55%) / Months in Program = Monthly Payment
  
  Example: A consumer has $40,000.00 in “Total Enrolled Debt”, 55% of that figure is $22,000.00 divided by the program length (let’s assume they desire a 3 year program which would be $22,000.00 divided by 36 months) which would equal a total monthly payment of $611.11, $25.00/mo. of which would be collected as our maintenance fee. This would give the consumer a reserve deposit of $586.11/mo. throughout our program which would over time, accumulate a significant amount of reserve funds to allocate towards future settlements creating the ability to establish these settlements in far less time than a conventional settlement program where service fees are collected on a monthly basis.
  
  1 YR Program: (Total Enrolled Debt *0.55)/12 [MONTHS IN PROGRAM] +25 [MAINTENANCE FEE]
  2 YR Program: (Total Enrolled Debt *0.55)/24 [MONTHS IN PROGRAM] +25 [MAINTENANCE FEE]
  3 YR Program: (Total Enrolled Debt *0.55)/36 [MONTHS IN PROGRAM] +25 [MAINTENANCE FEE]
  4 YR Program: (Total Enrolled Debt *0.55)/48 [MONTHS IN PROGRAM] +25 [MAINTENANCE FEE]
- Settleshort Green Light Program:
  Customer agrees to pay Northeast Settlement Group a program fee equal to 15% of the savings
  amount, of each enrolled debt. The program fee will be charged to the CUSTOMER as settlements of 50% or lower are reached with each creditor. Any settlement offers above 50% can be refused by the CUSTOMER and Northeast Settlement Group will continue to work until a settlement of 50% or less is obtained. Any settlements obtained at 50% or lower will be considered complete and it will be the responsibility of the CUSTOMER to meet all terms set forth in the creditors settlement offer. It is expected that CUSTOMER will maintain the availability to funds to cover at least 50% of total remaining enrolled debts at all times until all enrolled debts are satisfied. If CUSTOMER fails to meet the creditors’ settlement agreement and the need arises for Northeast Settlement Group to renegotiate the terms, this enrolled debts fees will be charged again. A $500 Retainer will be charged upon our completion of submitting all the initial settlement offers to all creditors.. This Retainer is non refundable.
Debt settlement program terms and conditions
Here are sample representative copies of the program terms and conditions.
- Elite Sample Agreement
- Greenlight Sample Agreement
Ongoing success rate of past clients that settled only some debt:
We have had less than 8% of our clients drop out of the program. All of them except for 1 were within the first 1‐3 months and granted full refunds for any fees collected. Most of them had a sudden change in income/expenses, or a change of plans and our program no longer made sense for them. We parted ways amicably with all of them and still maintain contact with many. We are in regular monthly contact with our clients and always return messages the very same day. Our negotiator is monitoring daily, all clients reserves and regularly opens contact with creditors even when the possibility of settlement may be months away. We have been able to successfully establish many long term settlements much earlier in the game than if we waited for the entire amount of reserves to build.

We also request that our clients forward any notices from their creditors in regards to complaints, law suits, or if the debt simply changes hands to an outside collector. Our policy here is to call on any debt immediately and open some kind of communication with them. I don’t have exact data yet(in an easy to read format that shows up to the second progress), but it’s a great idea. We have the data and will be creating a report from our CRM asap, I feel it will be a great tool to monitor our progress in one place. It may take a few days but I would be glad to provide you with that report when completed.
Ongoing success rate of past clients that settled all debt:
In our first year in business we have only had 1 client so far that now has a zero debt balance. He was our very first client and he took a very proactive part in the process. Together over 11 months we were able to reach agreements on all of his accounts totaling $114,000. His total paid will be $47,222 (42.3% overall). He still has about 10 months to go on two accounts that we established 12 month term settlements for him with Chase and AMEX, after those he will be done. This particular client was with us for 11 months and he was on the old fee structure, so he paid $200/mo ($2200 total). He is now on his own and no longer being charged any fees.
Average length of time in the program:
The average established program length for our clients is 34 months. [We will have to see on this statement since they are not aged enough to make an exact measurement.]
Settlement Information:
Total Amount Settled: $121,366.37
Total Settled Accounts: 40 Accounts
Average settlement amount: $4860.20
Average Settlement Percentage: 40.42%
Customer satisfaction data:
We handle our clients from start to finish, every aspect of the entire debt settlement process. We would never even consider sending our clients off to a back end. With this in mind we go way above and beyond in explaining every negative aspect that debt settlement presents (secret shopping calls welcomed). We will be working with each client from start to finish; it does us no good not to disclose everything. In addition, every single potential client is made aware of any and all options available to them (credit counseling, BK, etc) and we actually advise them to actively investigate those options before enrolling with us.

We have 2 sales/consultant staff and 5 back end staff to service our clients. We return all calls
the same day and any problems or issues that arise are always handled in house. We have NO
complaints with BBB or any other agency or organization. Our theory is that we would rather
grant a full refund to clients if an issue is so great that it can’t be worked out. Even if they are
being completely unreasonable, it’s just easier that way.
Percentage of clients that were sued for a debt that was included in the program.
We currently have 189 enrolled accounts still unsettled. Of those we have 18 of them we have marked “legal”. That would leave the “percentage in legal status” at 9.5%.

We instruct any of our clients to immediately send us any complaints, lawsuits or notice that the
debt is transferring to a law firm or collector. Our policy is to call these new creditors or law
firms immediately. We find many times we will be able to reach an agreement before a lawsuit
progresses.

We currently have 2 clients with court dates. One is in the end of July and the other is for late
September. Those accounts are currently on a weekly follow up at minimum and we are working
hard to reach an agreement before court is required. In the event that they do go to court, both
clients have been advised of their need for proper legal consultation or representation. Any
enrolled accounts in “legal status” are handled in this manner.
Percentage of clients that continue to get collection calls while in the program.
This one is almost impossible to calculate accurately. If I had to guess I would say 90‐100% of our clients still receive collection attempts of some sort. We do our best to have creditor calls directed to us, but it’s impossible to stop every call. Every client understands this completely before signing up for either debt program we offer. The pitch that debt settlement will stop collection calls is not true.
Reason why clients left the program before settling all debts, broken into category.
We have had 2 clients leave the program because they decided to file Bankruptcy. Another client had lost their job and wouldn’t be able to maintain their monthly payment towards settlement. Two other clients left because they had heard negative information about debt settlement and
decided to go in another direction. The last client that left, did so after 6 mos in the program and
we were able to settle 1 account for him in that time, saving him $954. I don’t really know why
he left, he never fully explained why.

Photos From Northeast Settlement Group

I really enjoyed the photos Andy from Northeast Settlement Group sent me. They brought back a lot of old memories for me from when I first started the credit counseling company in 1994. It’s nice to see them using the same old inexpensive furniture, dividers and desks.

Although I’m not sure they have the same problem we did of truckers on CB radios passing the office and cutting in on telephone conversations.

A review of the Northeast Settlement Group Web Site

Overall I’d have to give their web site a thumbs up over the disclosures that are made on 90% of other debt settlement sites. Here are some of the things they say on their debt settlement page. How refreshing.

Good Stuff on the Site
All you need to do is Google the term debt settlement and you will find story after story of people getting burned by debt settlement companies. Most of it is true and a direct result of the debt settlement companies charging the majority of their fees upfront or over the first 6-12 months. Many times the fee is paid in full and nothing substantial has been done.

We don’t believe that charging large upfront fees is fair or ethical and we don’t charge them. We offer two separate debt settlement programs and with both, fees are charged when an account is settled and always based on our performance. If we don’t perform, we don’t get paid.

The negative press that the debt settlement industry has received lately has been caused by more than companies just charging high upfront fees. Not disclosing the many downsides to debt settlement can leave consumers getting blind-sided by growing balances, collections calls, and even lawsuits. For some, debt settlement makes perfect sense, while for others it would be far better off dealing with their debt with a different approach.

As mentioned at the top of this page our goal here is to provide you all of the facts, so you can make an informed decision. Most websites related to debt settlement will have all the benefits in giant font, sometimes flashing and sometimes racing across the screen. The disclosures, downsides, and fees are typically all the way at the bottom of the page in a very tiny font. We’ll make it easy for you, we’ll keep the font the same size and we’ll explain as many myths and disclosures to the debt settlement process as we can.

Debt Settlement Myths
- “We can stop all collection calls” – No they can’t. It’s impossible to stop all collection attempts. Part of our written correspondence to your creditors requests they contact us with their collection attempts and not to contact you. The creditors many times ignore these, and you may still receive calls from them. We can resend the correspondence as many times as needed if a creditor is being overly aggressive or persistent.
- “A government bailout program has made this all possible” – No it hasn’t. This one is total BS, and you should RUN from any company that offers this as a credible reason for enrolling in their program. No such government programs exist and the person you are speaking with is either completely misinformed or a blatant fraud.
- “You’re protected because we’re part of an official organization” – The debt settlement industry has two major “associations”. TASC and USOBA. Any member of either of these organizations will tell you it’s a badge of honor and you should always try to work with a member affiliate. The truth is that neither of these organizations offers the consumers very much in the way of real protection, many of the worst offenders in the debt settlement industry are members of these organizations. In our opinion both of these organizations currently represent the best interests of the debt settlement companies, not the consumers. Until one of these organizations steps up to the plate and offers real consumer protection in the form of a limit to upfront fees, we will not be affiliated with either.
- “Getting out of debt is easy” – This couldn’t be further from the truth. For many, being delinquent on any account can be a shock to the system. You will go into the creditor’s normal collection process and will be subject to all the normal collection attempts. We will help to smooth out the ups and downs to the debt settlement process, but it still won’t be easy.
- “We’re a law firm, so we have an advantage” – You certainly won’t have any advantage or gain any leverage working with a law firm, but you will most likely pay higher fees. Most of the time an actual lawyer will never make any calls on any of your accounts, they are just using their name in order to sell more and charge higher fees. They won’t represent you in court, and their fee structures can be the worst in the entire debt settlement industry. Doesn’t sound much like an advantage to us.
Debt Settlement Disclosures
- Credit Score – A debt settlement program will most likely have a negative effect on your credit score. How much your credit score will drop will be determined by how your credit score is right now. If you have been behind on your debts for a while already, your credit score may not be affected as much. If you have a great payment history and good credit score when you enroll in a debt settlement program, your credit score will likely plummet. A debt settlement program is NOT designed to improve your credit; it is a strategy to eliminate your debt as fast as possible and for as little as possible. Maintaining a solid payment history with all of your creditors is the only way to improve your credit.
- Balances can grow – When you fall behind on credit accounts, there may be late fees or interest charged until the accounts are settled and your creditors are under no obligation to reduce the balance owed.
- Lawsuits – Creditors have the right to sue in order to collect their debts. Each creditor has their own rules and policies as to whether or not it will follow through with a lawsuit, and these policies seem to be constantly changing. The only sure way to prevent a creditor from suing is to settle the account before they decide to take legal action. The fact always remains that a creditor exercising their right to sue is a possibility and if you are sued or taken to arbitration it is important you get legal advice and follow it concerning how to respond to the statements in court or arbitration claim. In our experience any time somebody failed to respond correctly to a lawsuit or complaint, a judgment was automatically entered for the creditor.
- Income Taxes – Another thing to be aware of with any debt settlement process is that it may have an effect on your personal income taxes. If the amount of forgiven debt exceeds $600, your creditors must report it to the IRS on a form 1099C as “Forgiveness of Indebtedness Income”. According to information on the IRS website this income can be excluded from your income tax under certain conditions such as if you were insolvent at the time the debt was settled. We always recommend using a tax professional to help with your tax returns while involved in a debt settlement program.
- Income – In order to be successful with any debt settlement program you must be able to maintain a steady source of income. The goal should never be to stretch out a debt settlement program as long as possible; it only increases your exposure to all of the dangers above. A debt settlement program should never last beyond 36 months, you may be a better candidate for bankruptcy or credit counseling/consolidation if you need longer than that build the sufficient reserves. – Source
Stuff That Could Use Some Improvement
The FAQ page made me wince when reading the statements about bankruptcy.

Q. What is better, debt settlement or bankruptcy?
A. Many people struggling with debt consider bankruptcy. The main disadvantage of bankruptcy if compared to debt settlement is that it will damage your credit history and score so bad that you won’t be able to get any new loans for up to 7-10 years from the moment you file it! As opposed to that, a good debt settlement program will be able to settle your debts for a tiny fraction of their outstanding amount without letting the creditors make your credit history any worse. The second point is that debt settlement doesn’t take as much time and effort as the process of filing for bankruptcy. And last but not least, with the new bankruptcy laws, you will most likely be forced into a Chapter 13 repayment plan instead of being allowed to file Chapter 7 bankruptcy, which means that in the following years you won’t be able to spend money on anything but necessities. Doesn’t sound very tempting, right? – Source

I find that particular section to not be representative of bankruptcy. In fact, falling behind on your debts in a debt settlement program will be reported for seven years as well as a Chapter 13 bankruptcy.

People that go bankrupt and rebuild their credit will be able to get loans within a couple of years and will get offers for new credit immediately after the discharge of their bankruptcy.

The “tiny fraction” statement is a bit over the top for me, even an actual settlement near half, which is their actual percentage is not a “tiny fraction”.

The statement “without letting the creditors make your credit history any worse” seems inaccurate since the delinquent debt in the debt settlement program will be reported on the credit report and the debt settlement company has no control over what the creditors must report.

People that opt for bankruptcy, 70%+ file under a Chapter 7 bankruptcy that discharges their total debt in months. The remaining people file under a Chapter 13 bankruptcy and repay their debt over three to five years based on what they can afford.

The section also fails to mention the advantages of bankruptcy to give consumers a clear understanding what they are comparing. Bankruptcy will stop all collection calls quickly, will prevent lawsuits, will terminate and wage garnishments and give consumers legal protection from their creditors.

Q. Will my creditors still call me?
A. Once you miss a couple payments your creditors may still contact you. As soon as you enroll into one of our Settlement Programs we will send a “cease and desist” letter to all your creditors and this usually takes care of 99% of the phone calls, but if they continue to call we will work with you and the creditor to get them to stop. – Source

Ouch, that looks like it needs to be updated. By their own admission, “90‐100% of our clients still receive collection attempts of some sort.” That section looks like it needs to be updated in two ways. First, to reflect that most clients still do get collection calls and that a cease and desist letter has no power on the original creditor to stop calling, only third party collectors.

So…

So it looks like NortheastSettlement Group is trying to be one of the up and coming good guys. They have gone a long way to speak openly and honestly about the debt settlement industry and have provided their transparency numbers for all to see.

The issues I had a concern with on the FAQ page look like the standard messages you hear on most debt settlement sites that gloss over the reality of bankruptcy. I’m hopeful that once I point out these concerns to them they will update their FAQ page with more balanced information.

Since Andy and his crew have already started out under the contingency fee model and are enthusiastic to be paid for their actual performance and delivery of services, I’m sure they are poised to better survive upcoming debt settlement regulation.

@GetOutOfDebtGuy

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2003 Backroads of American Debt – Day 3

Steve Rhode — Mon, 24 May 2010 14:45:54 +0000

From How to Get Out of Debt

Day three brought more weather surprises but also a great pair of back-to-back- interviews from people that were very honest about how they handle money.

The first couple was retired and had not planed for retirement until just five years earlier and had never looked at their credit report. They trusted their banker to watch over them.

The second interview is a pair of women that is brutally honest about their consumption, use of credit without paying attention to the terms, and their desire to spend to reduce stress and shop unconsciously. One woman lights up and says shopping makes her feel like Christmas.

I so enjoyed meeting them.

And if you want to know why I’m wearing silly looking blue gloves, watch Day 2.

@GetOutOfDebtGuy

2003 Backroads of American Debt – Day 2

Steve Rhode — Thu, 20 May 2010 11:28:36 +0000

From How to Get Out of Debt

Here is day two of the backroads debt trip. While I managed to survive the switchback West Virginia mountain roads in the dark the night before. Day two started with a big surprise, you’ll see.

@GetOutOfDebtGuy

2003 Backroads of American Debt – Day 1

Steve Rhode — Mon, 17 May 2010 14:14:19 +0000

From How to Get Out of Debt

In 2003 a small team and I traveled across America from Maryland to California to talk to people about money. credit, and debt.

After making the trip, before the tapes were able to be professionally edited, my life and the non-profit group I founded changed dramatically and the tapes never made the light of day. It was on this trip that I decided I no longer wanted to run a large non-profit group and I needed to take some time off and regroup.

What you are about to see is the trip, the interviews, and what we learned by talking to a lot of great people about money, credit, and debt. I thought it was insightful.

The editing of this video is not sophisticated. I’m putting it together myself, nearly seven years latter. But for those of us interested in consumer debt, I think the words of the people are more important than a slick edited production. At least that’s what I’m hoping.

There were three of us that made the trip. I rode my BMW K1200LT in the rain, fog, cold and intense heat. Andrew and Jim followed in a climate controlled one way rented minivan. Andrew is the British guy you’ll see and Jim is the cameraman.

When we made it to San Diego I shipped my motorcycle home, we turned in the minivan and flew back. The end of the trip was just the beginning for me.

On a long ride across Texas one day I came to the personal conclusion that founding and running a large company, even if it was a non-profit, was not bringing me happiness in life and as evidenced by all we had seen on the trip up to that point, there was so much other stuff to see in do with my remaining days. On this adventure I made the big decision that following the trip I would pursue happiness over worldly success. Not long latter I resigned as president of Myvesta and took a year off. After a year I returned, latter closed down the non-profit group and moved to England.

Without further adieu, day 1.

@GetOutOfDebtGuy

I Go to Prison and Talk to Bob and Angel Behind Bars About Life, Credit, and Debt

Steve Rhode — Mon, 02 Nov 2009 13:55:46 +0000

From How to Get Out of Debt

So life is hard, tough and difficult. Dealing with debt collectors is stressful and often feels like we just can’t deal with yet another collection call or difficulty in life. Hell, there is so much crap we all have to deal with in a standard week that it often feels like the hurdles are too high, the obstacles, too many.

But what if you were in prison, now had a felony record, and need to build your life up again. Imagine how tough that must be.

So I had this opportunity to go and talk to some guys behind bars about their lives. I got on my motorcycle and made a 1,800 mile round trip to record this interview for you. The long ride gave me a lot of time to think about what I was going ask and reflect on what I learned.

Look, I’m not making any excuses for anyone that has made mistakes, got caught, and went to jail. But I really got to thinking about what life is really like, trying to get back on your financial feet after landing in jail.

After a long ride up to Springfield, MA I got to go in and sit down face-to-face with a couple of guys who have been in jail multiple times. What started out as a conversation about money, credit, and debt, soon turned to a very educational conversation about life on the streets, life in prison and things to come once released.

This was an hour interview but was full of so much good information. By halfway through I started to feel very positive for these guys, thinking they’ve heard and absorbed some good life advice. While they had made mistakes, they also had learned. Only time will tell if they will be able to break the cycle of prison.

We can only hope Bob and Angel find a better path in life.

Thanks guys for all that you shared and here is hoping your words and wisdom can find their way to help others.

Listen to my conversation with Bob and Angel.

You can subscribe to my series of debt interviews through iTunes by clicking here.

Transcript

Interviewer: So I’m sitting here in Massachusetts, actually. We’re in – how would you describe this facility?

Angel: It’s a low security – it’s actually a place where they help you reenter the community, you know, from being locked up in the main facility.

Interviewer: Okay.

Angel: So it’s more like a college to me. You know? Like a college dorm setting.

Bob: Like dorms, yeah. Yeah.

Angel: Yeah. You know, we got keys to our own doors. We don’t –

Bob: You get to wear your own clothes.

Angel: Right.

Bob: Your own sneakers. You know? And it’s awesome privilege.
Interviewer: And I’m sitting here with Bob.

Bob: Right.

Interviewer: And Angel.

Angel: Yes.

Interviewer: Right?

Bob: Yep.

Interviewer: Well, has it been awhile since you’ve been out?

Angel: I came in in January, so I actually went home in June and came back in June.

Interviewer: Okay.

Angel: Yeah, it was a bad thing there on my birthday. I came back in. So I had a rough hit, but doesn’t matter how much time you do. You know? People say you know, you got a little small bit or a long bit, losing your freedom is losing your freedom and that’s the bottom line.

Interviewer: Do you think being in here impacts money, credit, debt, you know, bills you’ve got to pay?

Bob: Yeah, if you have responsibilities, family, you know, or a business, yeah, it slows it – yeah.

Interviewer: Did you have responsibilities on the outside?

Bob: Yeah, I got two daughters, you know, wife, kids. You know, I was – I’m receiving Westford Comp from an accident I had back in 1999 and when I got incarcerated automatically it stopped that, it stopped the payments. So the payment that was going to me I was giving to my wife and kids, I had to wait and get out and reprocess that whole thing again.

Interviewer: Do you think that you’ve got bills out there that you’ve got to pay?

Bob: Oh absolutely. Yeah. Economy’s down right now.

Interviewer: Yeah.

Bob: You know.

Interviewer: So are you being contacted by debt collectors at all, your family?

Angel: I’m not, but –

Bob: Yeah, I have a few. I have multiple letters. You know? I call it junk mail. You know?

Interviewer: Yeah.

Bob: Yeah.

Interviewer: Well, how do you deal with the? I mean, do you think about it? You know, here I am, I’m locked up, I don’t have my freedom and then I’m gonna get out and these things are waiting for me.

Bob: Yeah, start from scratch again, you know, but I was receiving child support, so I had ____ child support even though I’m incarcerated, so out of all debts, you know, child support _____ _____ because they managed to understand the situation I’m in. I’m incarcerated so they’re like, you know, “Okay, what we do is we’ll minimize the bill,” and they isolated my bill until I get out and that’s cool to me ‘cause all the debts will do that.

Interviewer: Yeah ‘cause otherwise in other states, they put you back in.

Bob: Yeah, and they put on one collector and they put you on another collector and the next thing you know, you’re on the line for, you know, they mark you and that’s not a good thing. Being incarcerated, you know, but –

Interviewer: Well, how about you, Angel?

Angel: Me personally, I try not to think about things that I can’t have an effect on while I’m here. You know? If I can’t do anything about it, why stress about it at the moment. You know, there’s plenty of other stresses going on. Why overwhelm myself. But I think mostly it’s harder once you’re released ‘cause here you know, it sucks. You know, you don’t have your freedom or whatnot, but you’re provided your meals daily. You know, you know what you’re going to wake up to tomorrow.

Once you’re out those doors, it’s a big world. It’s a world of mystery and everything hits you at once, all the time that you’ve missed while being in here, it’s like someone digging a hole the whole time you’re here and then they just throw you in that hole. As soon as you walk out, you’ve got to climb out of it. And that’s the overwhelming part. I think that’s why a lot of guys come back in because they’re overwhelmed and they don’t have – well, there is a lot of resources out there, but sometimes we don’t know how to get to those.

Sometime we see those things as they’re gonna take too long and we’re desperate at that moment to fix a certain situation because our family or our loved ones depend on it. You know? So with me personally, while I’m here, I just try to focus on which steps I’m gonna take when I’m out there. But I also know once I’m released, it’s gonna be a fight. You know, it’s gonna be a huge fight because the world is ugly.

Bob: For some people that they’ve been here incarcerated right now at this present moment, Think Hard is, you know, like sort of a hero situation because they do have the privilege to go back out there and take care of these debts that’s behind them. You know, like most people here, a lot of debts is buried. They have to wait to get out there and then they have to start with a shovel, you know, to get under and start from under to the top. But, you know, and most part, you know, people have been – this place has been a hero because you get privilege to go out and they can tell you this, I want my job back, you know, where I got fired at or I’ve been suspended. So this place gives the opportunity to work with you, you know.

Interviewer: Do you think that some people when they get out, that the pressures from bills and having to make money and pay – do you think that that kind of leads them to do desperate things again?

Angel: Yes, that and when you’re out there looking for work, you’re CORI (Criminal Offender Record Information) follows you everywhere. And –

Interviewer: I’m sorry, your what?

Angel: Your CORI, you know, your arrest record.

Bob: Your record.

Interviewer: Okay.

Bob: You know, your previous records.

Angel: We call it a CORI, and things look so horrible on paper. You know? If you could be in a certain situation and you know, we won’t get into detail, but you being a fly on the wall, it’s not, I mean no crime is right, you know, but on paper, it just looks so much worse. You know? So when you’re sitting in front of a potential employer and they lift your CORI up and look at it, they’re looking at you like they’re scared of you. You know?
So, they really – a lot of people won’t hire you because of that. They’re insecure that the person in front of them will cause them or their company harm and really we just want another chance. You know, so after so many closed doors, you know, knock and knock and people shutting doors in your face. They’re all, “We’ll call you, don’t call us,” you begin to feel hopeless and you look at your loved ones who depend – you’re a man. You want to provide for your loved ones. You know, that’s a man thing. And they’re just sitting there looking at you with those eyes and sometimes it leads you do desperate things.

Bob: Education’s an important thing, man. You know, education because back in, you know, 10, 20 years ago, you could get a job without a GED. You get hired or whatever at a job, but today you know, that’s the first thing they ask for besides a CORI. You know, “Do you have a GED? Do you have your diploma?” And then if you say no –

Angel: Now GED ain’t even good enough. You need some type of degree or certificate.

Bob: Yeah, but what I mean is GED is a start. It’s the first thing they ask for. You know?

Interviewer: So if somebody does want to hire you, they look at your CORI and they –

Bob: Absolutely. Yeah.

Interviewer: Are they gonna pay you less than the going rate or do you think that you’re getting screwed on that?

Angel: I don’t think they worry too much about money because I mean they can pay us a little less, but their worries are, can I trust him.

Bob: Yeah, the trust and attendance.

Angel: You know, can I turn my back or is he gonna steal something from my company, a machine or –

Bob: Or is he gonna came in every day to work or is he responsible? You know, a lot of jobs are for people ____ today. You know? Especially, the economy’s down. You know, they’re really looking for people that’s gonna be responsible and be accountable for their job decision.

Interviewer: So what do you say to an employer?

Angel: Well, half the time it’s hard to even get in to speak with them because on the application it says right there, have you ever been convicted of a felony in the past five years. If so, please explain. So you know, we’ve been told to put yes and we’ll explain that. And you know, so that way –

Bob: Or leave it blank.

Interviewer: So just check yes and leave it blank.

Bob: Yeah.

Angel: Right, so but a lot of them will see that and just throw the application in the trash. You know? So, it’s tough. It’s definitely tough.

Bob: Yeah, but people have been through – you know, there’s a lot of people that have been through this facility have been hired for jobs and completed a sentence and gotten released on their own and ______ the job and still today they’re still doing good after a year or two. I know a friend of mine that been in here and he been released two years ago and he still got that job. They gave him a raise and he’s about somewhere $14-15 an hour and he lives by himself and he says, “I’m doing all right.” He’s drug free, he’s sober and that was one of the most – fracture of his life was the substance abuse and the alcohol and next thing you know, he stopped all that. Now he’s living a productive, healthy – with a job that came through here. ____ release because it’s two guys here that does those things, Frank and Mark that helps you out to get these jobs. Man, the application –

Interviewer: What kind of jobs?

Bob: Any kind of job, you know, whatever they hire you at.

Angel: Yeah, they have a lot of employers who work directly with this place because they know they’re gonna be there on time and we’re still incarcerated. We have big privileges. I mean, a lot of guys get to jump on a bus and go out wearing their normal clothes, no inmate clothes.

Interviewer: It’s a kind of work release type thing.

Bob: Yeah, absolutely.

Angel: Yes, it’s a – it’s to get you back into the community. But they have a lot of places who work with you, but it depends on your crime also if they release you with that status where you can go about and look for work and stuff. But I think what’s important for guys in our situation is not to give up. In my personal experience, I mean I’m 24 years old. I’ve been here eight times and in my personal experience, I come back in right when I’m there. You know, I’ll be out there three, four months just working hard, working hard, looking for work, you know, finding a job that’s a full time job and I’ll be out there busting my butt and when I throw my hands up and I go do what I do and I come back in here, you know, like my girlfriend, it always happens, she’ll come visit me. “Yeah, well, you just had an interview for tomorrow,” whatnot or, “This so and so person came by looking for you saying they had a job, you know, and it’s just right there. You know? So we’ve got to just stay strong and know that nothing is easy.

Interviewer: How do you do that on number nine?

Angel: There won’t be a number nine. I pray there won’t be a number nine. You know, this time around, I’m actually one of the lucky guys who is fortunate enough to have someone who makes a good amount of money at home where she can take care of the both of us, you know, and we’ve got to let our pride go. You know, a woman can do that nowadays, you know, and I’m actually going to school, trade school. I want to be a chef, you know, that’s my passion and being in here, they have this new program where the government will pay for certain things like, you know, government sees this as the taxpayers pay for us to be incarcerated, so if they spend X amount of dollars on helping us on education, license and things of that sort, maybe we can take advantage of that and not come back and in the long run, save them money. It’s an investment on them, an investment on us and –

Interviewer: So it sounds like there are –

Bob: Opportunities.

Interviewer: Opportunities here. Right?

Angel: There definitely is.

Bob: Yeah, there’s a lot of opportunities.

Interviewer: Okay, and so you feel that the sheriff wants you to get better and –
Bob: Absolutely. Matter of fact, excuse me, this is one of the – this is one of the, I guess the only jail that give out a lot of programs, a lot of opportunity. I guess I think it’s nationwide. Right?

Angel: Yeah.

Bob: _____ two.

Angel: People at other jails actually like – excuse me, administrative people from other jails come here and actually tour the place to see how it’s run. They say that this place is one of the best jails in North America. You know, so –

Bob: Yeah, because 95, 97, 98 percent is mostly all alcohol and drug usage, drug related, so there’s a lot of programs, a lot of opportunity ____. And ___ wasn’t really _____ want to do good and like I said earlier, I know people that left out of here successfully and never went back to drugs or alcohol or went to meetings and doing the things, network, programs and they became successful. So if one person can become like that, you know, a lot of people could. It depends on your, you know, it depends if you really want it.

Interviewer: Do you think after you get out that there will come a time where you might have to or want to apply for credit, buy a car or what do you think about that?

Bob: I would love to. I’ve never had credit, to be honest with you. I would love to. That’s a – you know, that _______ _____. Instead of going to a place, you don’t have $30,000.00 for a car, but it’s good, you know, if you’re working at a – like the minimum place, credit gets very important because you could _____ a payment and survive –

Angel: Own a home and good things like that in the long run. You know, you don’t want to rent forever. Credit’s definitely really important. I didn’t value credit when I was younger. You know, I took advantage of the system when it came to that and now I see that I was foolish with that. You know, like good things could have really came. I see I have a lot of friends who treated credit well and because of that, they have many nice things. You know? So that’s definitely something that I’d like to work on.

Bob: The important credit, like the car, you know, and stuff like that, but if you go get some, you know, some other credit that you don’t need to get, you’re gonna mess up and get tangled up in the long run with these high interest, you know, and anybody get caught with high interest –

Angel: Well, you’ve got to know what you’re getting into.

Bob: And you might be all right for the first year, but when the next year start’s coming ____ ______, you know, it’s gonna be that snowball going down the hill and next thing you know, you’ll be, “Oh my God, I’ve got to pay this,” and it gets ______ in jail.

Interviewer: You get out, we’re focusing on career and rebuilding your life. Have you thought at all about even to rebuild your credit, I mean looking at your credit score and trying to get that cleaned up?

Bob: Well, I’ll be honest with you. I’m 43, I’ve never had credit. But from what I see and from what I hear, how people went through these things and how they’re going through these things, it gives me sort of like a heads up just in case I get into a credit. So I have all this, you know, already – I’ve already seen all this so, for me it’s very interesting how to, you know, get into credit. It’s not like if I didn’t know nothing, I’d be, “Okay, you give me credit. I’ll pay you monthly,” and next thing you know, down the line –

Interviewer: Have you applied for credit?

Bob: No, I haven’t applied for credit. No.

Interviewer: How about you, Angel?

Angel: No, I think I was another situation to see that as something time consuming. Most people in our situations deal with straight cash.

Interviewer: I hear you.

Bob: Yeah.

[Laughter]

Interviewer: So tell me, what is it you want to get out, you want to be a chef?

Angel: Yes.

Interviewer: Tell me what your life – you want your life to look like in ten years.

Angel: In ten years? Well, I would love to own a home, you know, definitely if not my own restaurant, managing one. You know? I definitely –

Bob: That’s gonna take a process, right?

Angel: Oh definitely. I don’t, you know, that’s just the first step, becoming, getting skills to be at that point where I could run a place. You know, that’s just a first step. I think it’s important that when we begin our growing process that we don’t get comfortable in a certain position. We’ve got to keep growing. You know? And I think that’s what life’s about. So yes, with me, I’d eventually – like my overall would be owning a home or restaurant and starting a family. Very simple, you know, people in our situations, we’re just tire of the pain. We go through a lot of pain and our loved ones go through it just as much if not more and it kills us seeing them walk out of that visiting room with the look on their face. You know, they’re trying to smile for us, but deep down they’re hurt, you know, and that’s because of our misfortunes or our bad decisions. You know what I mean? So –

Interviewer: Well, what could you tell yourself – now your 24.

Angel: Yes.

Interviewer: What could you have told yourself at 15 to have avoided all of this?
Angel: Well, wow. You know, that’s tough. I think I would have told myself that there’s nothing in the streets, nothing but pain. You know?

Bob: Should have listened to mom and dad. You know?

Angel: Right. Yes.

Bob: That plays a big role too, listen to mom and dad. ‘Cause I remember you know, I come from good parents, mother and father. I come from a family of nine and I’m sort of like the black dog of the house, ____ me, but there’s been times that if I could have listened to my dad, if I would have been more responsible with my ears, probably today I wouldn’t be sitting here talking to you. But yeah, it happened to, you know –

Angel: Once you’re in it, it’s so easy to fall back in. You know, they say this is a revolving door, you know, and once you fall, it’s so much, so much easier to fall right back in and I think for the young people listening, you know, I would say to them to get into some type of hobby. Find older people, you know, positive people to be around because there’s so much more in this world than being behind bars. This cannot be it. You know, people come to jail and it’s kind of sad. You know, I look around, people get caught up in the jail politics. You know, who’s the biggest guy here or who runs this joint or that. And it’s like it really – they treat it like their life. You know, like they’re the president running a country.

Bob: And you have young adults, man, that’s coming in at 19, 18, you know, by the rackets, you know, and they’re coming in every day. You know, the late 30s and the late 40s, that’s like me, including me, it’s like I’m fading away from that, but today, it’s a whole different generation, man. You’ve got 19-year-olds coming in with 20 years, 15, you know, and this is by – it’s unbelievable what I experienced this bid, how people are coming in. “How much time did you get?” And one guy told me, “Oh, they gave me seven,” and they take it like it was nothing. Like, you know, like –

Interviewer: Do you know anybody who prefers it to be in here?

Angel: Yeah.

Bob: Very little people, yeah, especially for the ones that, you know, abuses drugs and alcohol. They look – that’s a lifesaver.

Angel: A lot of people are scared to be released. The unknown is – you know, people say that people would rather live with fears that they know than the unknown.

Bob: Yeah. Absolutely.

Angel: And people become institutionalized after so many times landing here. You know, like I know a couple people who I run into them in the street, you know, we go back or whatever and they just tell me they don’t feel right on the street. You know, they’ll do whatever it takes and usually end up back in here. They’ll be back – they won’t last more than two months. You know?

Bob: And not having education’s a bonus. You know? For, you know –

Interviewer: Not having education?

Bob: You know, what he just said about, you know, that people’s that’s scared to live out in society can do time. So many times in jail _____ not have education, they get put back out there again to reprocess that is, you know, it’s like it’s a big burden. You know, it’s a big stress. So they wouldn’t mind to come back to jail, do another five or six years.

Angel: Right, don’t feel adequate out in the real world.

Bob: Yeah, you know, they get three ____ _______, you know, so you know, but me as an individual, you know, jail for me easy enough.

Interviewer: Are there creditors in here? I mean –

Bob: There’s a few people here that got big credit problems, man.

Interviewer: No, but I mean is it – can – is it possible to owe somebody in here and then you know, have to pay up whether it’s I don’t know, some sort of privilege or –

Angel: If you have means of doing that, there’s always ways of paying, but there’s not a certain person in the facility where you go to them, look, I’ve got to pay this. Usually you’d have to write some type of – appoint somebody power of attorney, get it notarized by the notary here.

Bob: Yeah, or your family.

Angel: That’s basically as far as it goes.

Bob: That’s right. Yeah, that’s right.

Angel: They don’t go that far with –

Bob: Or you have a family that do have money or like you said, lawyer. But besides that, you know –

Angel: That’s also another scary thing, like who can you trust?

Interviewer: Exactly.

Angel: If you have a certain amount of – X amount of dollars, who can you trust to do the right thing with that money? You know?

Bob: Look what happened to Madoff. Right? It could happen anywhere. Right?

Interviewer: Well it also happens to people in the military. You know, they get sent overseas and they have to leave somebody back home to pay their bills. They don’t know what’s getting paid.

Bob: Yeah, they get the __ ___, huh?

Interviewer: Yeah.

Bob: What happens is ____ _____ sad story about Edgars, Sergeant Edgars.

Interviewer: I don’t know him.

Bob: Oh, the one that had the prosthesis in his legs, got in a car accident. He’s from Chicopee. Yeah, he had low insurance and he had to depend on his family because the military couldn’t pay – you know, they would only pay a certain portion of the insurance and he had a problem with that and talking about that, yeah. And it’s hard man just on your own to do things you did, but then again, who’s gonna be your cosigner? Who’s gonna be your copayer?

Interviewer: Who would you ask?

Bob: Absolutely. That’s a big thing.

Interviewer: So, you’re on a work release program right now?

Bob: Yeah. Right.

Angel: Certain people. It depends on your status. There’s different statuses on a person’s release.

Interviewer: If somebody is on a work release program right now and they’re outside and they’re making money, do they get to keep that or –

Angel: Yeah.

Bob: They do, but over here, they only ask for a very little fraction of it, right? Not much.

Angel: Yeah, if you’re working and you’re bringing in a paycheck every week, they actually charge –

Bob: For example, from $10.00, they take like $2.50. That’s not bad. You know?

Angel: No, it’s responsibility.

Bob: But if you did like 18 months here all that you worked for, the rest is yours. So you get out of here with, you know –

Angel: There’s been guys that ______ with $5,000.00 or even more.

Bob: Good pocket money.

Angel: You know, it’s good for people who are in that position.

Bob: Yeah, ______ to go out there in society, go back in society, recovering from a drug or alcohol problem and then got his life back together and then with seven or eight thousand dollars in your pocket, you know, that’s a good start. You know? That’s a good start.

Interviewer: Well, do you think with that kind of money in your pocket, it would be easier to get in trouble back on the streets?

Angel: No, because when we leave here, we leave with a clear head. We have our goals in mind.

Bob: Good state of mind.

Angel: We’re in the right state of mind. We’re positive. What puts us in that negative thinking is the constant failure, you know, the constant trying to succeed in whatever area of your life that needs, you know, work, education, family, and the constant getting put down is kind of what makes you just throw your hands up and, you know what, screw it. Hit the bottle or do this or do that or sell drugs, or, you know, whatever your demon is or whatever your poison is. That’s what pushed you to do that. So, if you leave here with a head start, you know, I mean, I guess it depends on the individual, but for most, I think it’d be helpful. You know?

Interviewer: Have you learned about money in here, preparing to be released?

Bob: Yeah, there was a guy names –

Angel: Yeah, they were speaking about him.

Bob: Yeah, what’s his name? Yeah.

Interviewer: But do you have any questions about dealing with money or credit or debt?

Angel: See, I’m horrible with money.

Interviewer: Why? Why are you horrible with money?

Angel: I spend before I get. You know? And you know, a lot of us don’t even know how to write a check. You know? ATM and that’s where it goes, but yeah, I spend too much. I don’t keep track of where I’m spending what and, you know, I don’t plan ahead, you know, this needs to be paid on this time. I don’t get paid ‘til then, so this –

Bob: Ignoring coupons, you know, stuff like that, those are important things. You know?

Interviewer: Well, do you think that you have an impulsive personality?

Bob: Impulsive?

Interviewer: I mean, are you just taking money out and living for now because you don’t think ahead in other parts of your life?

Angel: I think that’s more of a habit. I’ve been like that since, you know, I left home when I was 13, so I had to take care of myself on the street. I think that’s just more of a habit, you know, the way – style of living that I’ve had. You know, certain things are hard to break. But as you grow, you mature more and you know, like now I’m starting to see things that I was completely ignorant to before. You know, when it comes to money and saving for the future.

Interviewer: So how are you gonna change that?

Angel: Well personally, my girlfriend has a bachelors degree in business, so you know, she’s mostly in charge of all that, thank God for me, but you know, I just watch what she does, you know, have her explain things to me more and you know, just like anything, you know, you try it, you try it, you try it and you get better at it. You know? It’s practice makes perfect, you know?

Interviewer: So do you have any problems with putting your money together with your girlfriend and sharing it and managing it together?

Angel: No.

Bob: No, I’ve been with my wife 28 years, so you know, she’s part of me. I’m part of her, so you know, _____ sometimes, you know, I would be a good idea if you like, for example, if I get my check, she gets hers and say, “Hey, let’s make a plan and get this and be committed to it, be faithful to it,” and we had done that. You know, once I went to Kmart and spent five Gs and just layaway, you know, stuff that we needed and it was a one shot deal and then it took us like three to four years to pay that and it’s been paid. You know, it’s been paid, you know, but that comes with commitment. You know? And without her or her without me, paying that bill, it just falls. You know, it just crumbles. So –

Interviewer: Well, some people they get married or they live together and they keep their money separate. They don’t tell each other about it.

Angel: I think that’s –

Bob: A personal thing.

Angel: Yeah. People like that, I think they value money too much. You know? I think money is important, obviously, but I don’t think –

Bob: Powerful as well. Powerful as well.

Angel: I don’t think it should come between a relationship like that, you know? What’s mine is yours, what’s your is mine, you know. Not off the bat, you know, but once you develop a bond, you know, some people were together for, you know, nine months, a year or so, I could understand you not fully telling the other how much you made or how much you have, but you know, in my situation, I’ve been with my girl for six years. There’s nothing she doesn’t know about me and likewise. You know? And I like it like that. You know what I mean? We can rely on each other.

Interviewer: So let me give you a situation. This is someone who contacted me recently and she’s been married. Her husband is a farmer. They have eight children together and he won’t tell her how much money he makes and he won’t show her his tax returns and she has to make her own money and live on her own allowance. What does that say to you?

Bob: Oh, probably there’s a trust issue there.

Angel: Yeah.

Bob: Yeah, like I don’t know, like for example you said about the guy that’s _____ his paycheck stub or whatever, it sounds like one day this lady might like bite him back or something, like if anything goes wrong, he’s probably scared that she might get all his money.

Angel: Right.

Bob: Because today, looking at the TV and the news, there’s a lot of divorces, man, and ______ like beautiful example, man that worked 20 years hard, you know, have saved all his money you know, and next thing you know, she’s entitled for half of that.

Angel: Right. Could be a lot of things, you know, he could have another life that she doesn’t know about. You know, it could be anything. That situation right there, that doesn’t strike me as normal. You know> Eight children together, that’s, you know, but hey, to each his own.

Bob: Whatever goes down, money has to do with it, you know, and –

Interviewer: So does money buy you happiness?

Angel: No. It can buy you nice things, but I don’t think so. You know? I think actually –

Bob: I don’t think _____. That’s for _____. That’s for me ____.

Angel: I think actually the more money you have, the more problems you have.

Interviewer: I’m sorry, the more money you have, the more problems you have?

Angel: Yeah, definitely. You know. They say, you know, “You have all this money. You know, with big money comes big responsibility.”

Bob: Absolutely yeah, I believe in that. I believe in that.

Angel: Yeah, I don’t think it buys happiness at all.

Interviewer: So how much money do you want to make? I mean, not the dream, not the lottery, you know, what do you think you’d have to make each year to have the life you want?

Bob: I’d be fine with if I was to go back out there and if I could work, I’d be fine with – I’ve got two girls, one is – my daughter’s work. I got one, she’s 21 and one is 19 and my wife works at the library and been there for 13 years and me with a job with – I’d be happy with a job with $17.00 an hour. I’d be happy. I’d be there. Absolutely. I’d be comfortable just with that. There with my wife and my kids and all together, I’d be great.

Angel: Something like $40,000.00 a year, 35, something like that, you know, just to live comfortable. You know? That’s –

Bob: And have no problem paying no kind of debt or credit cards. You know, that you could faithfully be happy and, “Honey, fill this money order out and pay these people.” You know, not that stress, that anger, that, “Oh man, I’ve got to pay this guy. I’ve got to pay this dude. I’ve got to pay this,” and not live like that. You know?

Interviewer: Have you lived like that in the past?

Bob: Oh, in the moment, yes it was. Yeah. There’s been times yeah, frustration. Man, it’s not a healthy thing. It’s not healthy. You know?

Interviewer: So you had street collectors, you didn’t have debt collectors.

Angel: Right.

Bob: That’s the truth.

Angel: They’re even more persistent.

Interviewer: Yeah.

[Laughter]

Interviewer: So living on the street doing whatever it is that you did, there was the opportunity to make quick, easy cash. Right?

Bob: Yeah.

Interviewer: So, what happens now? Let’s talk about Angel, let’s talk about you being a chef. What happens now? You want to make 40 grand a year. You’re gonna work 16 hours a day in a hot, sweaty kitchen. I mean, it’s a tough gig. Are you prepared to do that other than spending time and having fun?

Angel: Oh definitely. I grew up fast, you know. I grew up real fast. You know, people say that I grew up too fast for my age, you know. There’s guys my age who still fool around, joke around, you know, and your experiences in life mature you faster. You know?

And in my situation, right now I’m welcoming the stresses, you know, the hard times that are to come to be able to succeed and achieve my goals, you know, because I’ve been through mostly anything you can dream of in the streets. I’ve already been down that road. You know, I’ve felt all the pain; I’ve done things that I’m not proud of. You know, so why not do it the right way? You still go through certain struggles, but this – nobody can take that from me. Nobody can take my education. You know, they can’t throw me in jail for that.

So that’s where I’m at with that. You know? I’m not saying it’s going to be easy and I know you know, when you grow up in the streets, there’s certain people, you know, you can cut certain people out of your circle, but there’s certain people you can’t. They’re more like family. And they’re still involved in the street life and you know, it comes to, you know, when I was released last time, my first day out, I’m walking home and a buddy pulled – “Get in.” Shows me a bag. I’m not even gonna get into it, but I could have made it home with an easy thousand dollars within a half hour. I’m like, “Oh man.” You know? How do you turn that down? It’s tough, but you’ve got to stay focused. You know? Because, you know, the money comes fast, but it’s not worth it.

Interviewer: Is there – when you were living on the streets and you were making quick money and stuff like that, is there any sort of thought about, “I should save some of this money or put some of it aside,” or is it all just about living in the moment?

Bob: Well yeah, it’s about the moment because you know, you make a thousand, two thousand a day easy money. You never think like that ‘cause you know that you have faith that you know that this money’s coming in like that every day for long term. You know? As long as you don’t go to jail.

Interviewer: Right.

Bob: You get this money coming in. You know? And it’s long term money.

Angel: It’s definitely the lifestyle. You know? If you’ve got your head on right, you can save. You can, you know, make something with it. I know plenty of people who’ve done it, but for the most part, for the majority, people get caught up, you know. With big money comes women and great times and it’s easy to fall into that cycle. Real easy.

Bob: You know, what happens again also every day is people that stay – you know, like the street life, they save so many money and when they wait ‘til they get like good, close to a million dollars, that’s when the authority comes in –

Angel: Right, and takes it all.

Bob: Takes it all right back, all that you worked for, all that you hustled, takes it right back and leaves you broke and you’re in jail now, broke.

Interviewer: So does crime pay?

Angel: Crime doesn’t pay.

Bob: No, it doesn’t. No, not at all.

Angel: No.

Bob: Not at all.

Interviewer: But you see the kids out there and they all want to be the badass and you know –

Bob: Right now, out there’s all about guns and money now.

Angel: Right.

Bob: And guess what? Guns is winning today over money now. Before, I ______ before you make 5,000, your bound to get shot in the butt. You know?

Angel: Yeah.

Bob: That’s what’s going on right now. That’s the style right now. Look at the news today right now. Pick up the newspaper right now. As we speak, you look at the newspaper right now and you’d be like, “Wow, look at the age rate of these murders. Unbelievable.”

Interviewer: So you get out, your life has been a certain group of friends or certain friends or a certain neighborhood. Do you turn your back on them or do you go someplace else? How do you break out of that cycle?

Angel: You see, like in my situation, there’s this – it’s called after incarceration support services and the area where I used to make money at and where I live is – it’s in between that spot, so you can’t avoid every place that will trigger you to – or, you know, memories where you made money or did certain things, you know. I think it’s important to try to avoid as many as possible, you know, avoid as many people as possible who you know that you know, could bring you down, but you can’t entirely do that. You know? It’s not possible to avoid everything. And you know, people try that whole geographical cure, you know, move to another place. That doesn’t work. I’ve tried it.

You know, no matter where you’re at, you’re gonna get in where you fit in. You know? The game doesn’t change anywhere wherever you’re at. You know, maybe the style a little bit, but you see it for what it is. You know? You’re there a week or two and you’re already have the whole area scoped out and I think that’s even worse because these people don’t know me. You know, I can get in and out real fast, but I think it’s just – mainly you’ve just got to stay focused out here.

Interviewer: That’s a good point. You get in where you fit in.

Angel: Right.

Bob: Right.

Interviewer: So you get out, you’ve got a job, you’re making money and you start to feel like you’re money’s getting out of control a little bit. You’re getting behind on your bills. Who do you call? Where do you go for help?

Angel: That’s good.

Bob: That’s a good question there.

Angel: Most of us ____ the guy we usually call to make that extra buck, but you know, most of us don’t have the – how should I put this, the resources –

Bob: Or the financial skills.

Angel: Right. Like I said, most of us don’t even know how to write a check. So we don’t have history with saving and banks and we don’t have good credit history so there’s no bank gonna give us a loan. You know, and they might. There might be something –

Bob: The old fashioned is all about putting their money into the mattress.

Angel: Right, right.

Bob: And saving it, forget about it. You know?

Angel: There’s probably things out there we know nothing about but I think in our mind, that’s just something that doesn’t pertain to us.

Interviewer: So you’re in this work release program. What if there was help to start a savings account and just put money away while you’re in here? Would that be of any benefit? Would that be educational at all?

Angel: Yeah, of course. Any experience like that would definitely be beneficial.

Bob: Especially if you’ve got something saved up and you want to put it on a prospective use, you know, that’s excellent.

Interviewer: Is the education that you get here, is it more talking at you or do they help you to achieve things?

Bob: It does. Yeah, they give you – like I said earlier, it’s an opportunity, man. Opportunity, man.

Angel: Yeah, it’s just like anything else. You have really really passionate people. There’s a good amount of people here.

Bob: There’s the guy that runs the class from Good Payer, you know, financial classes. They call it, what is it, financial wellness.

Angel: Yeah, you guys know him.

Bob: Yeah.

Interviewer: Yeah, Todd ____ at Cambridge Credit.

Bob: Yeah, he’s a good man and at the same time, he’s giving out classes and he’s like, “You know what? I have to meet this criteria and I’m giving this class,” and it’s true. Man, makes us think ____ Wait a minute man, this is reality, man. This is the real picture. This is life right here.

Interviewer: So in that class, do you actually write a check or –

Bob: I don’t even know how to – me as an individual, I don’t even know how to write a check out, but there’s people like you said, that don’t know how to write a check out.

Angel: He’s given out flyers. Not so much flyers, like worksheets, you know, explaining certain things and he’ll do it on the board. You know, there’s a lot of – like you said, there’s a lot of talking at you, but there’s a lot of working with you. It all depends on the person. I think that’s anywhere you go. You know, some people love their job. Some people it’s just a check to them. You know, but in this facility, I can say that there’s a lot of passionate people who love their job and will go that extra step for you if you’re willing to do it for yourself.
Interviewer: So you get out, God forbid you screw up again. Have you let down just yourself or have you let down these passionate people too?

Angel: You know, they definitely do look at you in a – but like a little disappointed, but the great thing about them is that they brush it off and they’re like, “All right, what went wrong this time?” You know? It’s like they know you ____. I mean I’ve been here eight times, so they all know me first name, you know, and it’s nothing to be proud of, but they know my personal issues so when I sit down with them, they’re like, “All right, what went wrong?” And they can identify certain things and help me out in that area. You know?

So, you know, each time I come in, I come in on something different. You know, it’s I’ve already mended this and it stays mended, but I have this weakness. You know, I feel this time I’m – I feel whole. You know? And as long as I keep my mind right, stay away from certain people and I think I’ll be all right. I’m sure I’ll be all right.

Interviewer: All right and just what percentage of people in here do you think make money while they’re in this facility?

Angel: There’s different kinds of jobs here. There’s –

Interviewer: I mean, are you guys making money while you’re here?

Angel: No, we’re in – me personally, I’m reentry, meaning that I’m getting ready to walk out this door. I have less than 20-something days, so right now, I’m getting together, excuse me, resumes, you know, we’re out doing sample applications. We’re doing –

Bob: Appearances on the job, _____ to a job.

Angel: Sample interviews. Like, we’ll actually sit there and role play interviews and, you know, things of that sort, you know, getting ready for the real world. But people who have a longer stay, you know, there’s different kinds of jobs. There’s institutional work. You know, you can work in the kitchen. You can work on-grounds maintenance. You can work out in the street picking up trash, cleaning up the streets. You know, they pay – certain jobs pay as little as a dollar a day or a stipend pay of like $200 a week.

Interviewer: So what does it do to your ego to be out there getting minimum wage, picking up trash versus being the guy with all the flash on the corner?

Bob: Yeah, well –

Angel: I think it all depends o the way you see things. You know, you can be optimistic or pessimistic and I believe that you know, I’ve worked before and making that small check was more fulfilling than having that big wad of cash in my pocket because you worked hard for it, you sweat for it. You know, there’s more value in that money. You know, when you go to the store and you go to spend it, you actually watch yourself, like, “I busted my butt for this.” You know?

Bob: And it’s a lifesaver because, you know, it might save you temporarily. God is good and a job came in right in the nick of time, you know, and you’ve got to be grateful with that, you know, yet. You know, and there’ve been times that I had minimum jobs, low pay and I still needed more money to meet the other bills and –

Interviewer: So what’d you do?

Bob: I duked it out. I just had to wait. You know, it probably made me think, like do other crazy things, but I’d rather not because my wife and kids and my wife says this and _____ take it easy and just hoping and praying that somewhere down the line that things will be relief. You know, and it has. You know, it’s like anything else in life, there’s bad times and there’s good times. There’s struggle times, but it all depends what you input in it, you know, and what you make of it. If you want to go ahead and do second choices of going out there and selling drugs or whatever, that’s on your will. But then again, if you get caught and go to jail, you’re gonna wish you was back in that minimum job being faithful and paying the bills and being you know –

Interviewer: Yeah, but at the time somebody might be selling drugs, are they thinking about getting caught or are they thinking about how much cash they’re gonna have in their hand in an hour?

Angel: You know, it’s funny ‘cause when you’re in that cycle –

Bob: Yeah, the attitudes are all or none. You know?

Angel: Yeah. Once you’re in that cycle, you feel almost as untouchable. You know? People watch movies, a lot of movies, you know and when you actually live the life, to me, you know, people say the movies, they overdo it, but to me, and certain aspects yes, but to me and the way I’ve lived I think they under do it. You know? I think they under do it. They don’t see the real picture and you feel like you’re in another world. You know?

Interviewer: Untouchable you say.

Angel: Untouchable. Nothing applies to you. You know, you look at everyone around you going to work, doing their daily thing, you know, almost as in Goodfellas say, suckers. You know? We’re out here getting it. You guys are slaving away. We’re actually kind of laughing at these people. But he who laughs last laughs hardest.
Bob: Yeah, and today to be honest, I mean, you pick up the newspaper man, the economy’s down, man.

Interviewer: So you’ve got to be thankful for what you’ve got.

Bob: Absolutely and it’s not easy to go back out there and just thinking that – it’s not like back in the ‘70s and ‘80s man when you can get fired from a job and get another one the next day. You know? It’s – back in the ‘80s you know, there’s so many jobs out there for you. Like in New Jersey, I’m from New Jersey, you know, and jobs is everyday. You know, F-you. I got hired last week from – I mean, _____ for another guy, but today, you get fired from a job –

Angel: It’s tough.

Bob: Go ahead and try to find – ____ in and apply, you know, fill out an application, give them your resume and you’d be surprised how long you be waiting. You’d be like, “Honey, have they called me?” No, nobody.
Angel: Right. You’ve got people with college degrees waiting tables.

Bob: Yeah, man.

Angel: You know what I mean?

Bob: Absolutely.

Angel: And doing whatever they can to make that dollar.

Bob: Have _____ 15 years in the military and has like _____ and has trays and cooker. You know, it’s people that _____ jacket, but they get a job. You know, the economy’s down.

Angel: I think right now though, I think right now, logically, we probably have an upper hand because people who are overqualified, you know, a lot of people are too overqualified for certain jobs, they’re not gonna get hired. You know? They can’t afford that person for certain job. You know, I think they look at we might have an upper hand in this economy right now. You know, we’ve just got to stick to it.

Interviewer: Well, you’re willing to work hard. You’re willing to appreciate what you can get.

Bob: Yeah, we’re living a healthy life.

Interviewer: What’s the biggest misperception or misconception about you?

Angel: About me?

Interviewer: Um hmm.

Angel: Wow, you know, I’d have to say that people look at me, most people look at me and I don’t know. You know, it’s really weird because out on the street, I get random people all the time, like I remember this one time, I was in the grocery store with my girlfriend and this elderly man comes up to me and he starts speaking to me out of nowhere asking me about some soup. He wanted to get it for his wife and he couldn’t get her too much sodium or whatnot. Like, people actually cling to me on the street, like just random people talking will talk to me about random things. Then you got the people who I’ll be walking down the sidewalk and the old ladies will grab up their purse and try to shift away from me, like if I’m gonna snatch their purse or something like that.

Bob: Or lock the door to the car.

Angel: Right. You know, and that’s – it used to bother me a lot. You know? Like, I’d actually say something to them, but then that’s giving them what they want. You know what I mean? Like, I just try to greet people in the street and, you know, “Hey, how you doing?” You know, yes ma’am, no sir, you know, and they can take it for whatever they want. You know, whatever you think of me doesn’t mean anything to me.

Interviewer: What’s the biggest misperception about you?

Bob: The lifestyle I used to live. You know, right now if I – you was to tell me that, right now if I was to leave today, I’d feel positive. I feel like I know who I am today. I know, you know, what kind of person I could – what I could do, what I could give. But if you was to tell me that a year ago, you know, it would have probably been hard for me to answer that question because the lifestyle I was living, you know, the drugs and the drinking, that’s honestly it.

Angel: Yeah, most people probably think they _____ change or we make a lot of empty promises and that we’re not gonna change and, you know, they look at us. You see it in their eyes. You see it, they want to believe us.

Bob: The question you told me and if you was to tell me that question again and if I was to go out there today, I feel as though 95 percent I will get a job. You know, that’s my feeling. I know I will. You know, the appearance I put on to sell myself at a job. You know they got classes here how to sell yourself. It might sound funny, but it’s true. You get your resume and you get to reentry and ______ about how to sell yourself. Wear a nice shirt, nice tie, don’t curse. Go in there with a positive attitude, you know, keep your head up. You know –

Interviewer: No cursing is important on an interview.

Bob: Yeah, because where I come from, cursing’s part of my life. You know? Yeah, but so _____ it’s all about selling yourself at a nice place and then you go in there and you sell yourself nice, you know, and guess what buddy, come in Monday.

Interviewer: All right, so let’s say that you go out and the only job you can find is some fast food place and you’ve got some teenager telling you what to do. How does that make you feel?

Bob: Well, yeah.

Angel: That’s tough because we come from a –

Bob: You have to suck it up.

Angel: – environment here where your guard is always up and there’s a lot of guys who play that big tough macho thing, but really aren’t about it. You know, so we’re on our toes every day.

Bob: Yeah, ‘cause pride can become an enemy.

Angel: Right.

Bob: You know, it can mess up a lot of things.

Angel: So when we’re in a certain situation like that, you know, like you got this little pipsqueak over here telling you, you know –

Interviewer: You just want to smack him, don’t you?

Angel: OH yeah, because –

Bob: Well, you’ve got officers here that’s way younger than me that’s 19 and telling you that hey, listen, you’ve got to lock in. That’s a hard something to swallow.

Angel: I remember a lot of these guys when it was their first day and you get a certain feeling of like you have no clue who I am and what I am capable of too, but that’s the thinking that you’ve got to get out of.

Bob: Yeah.

Angel: That is definitely the thinking you’ve got to get out of because it’s so easy to react to a certain thing like that. And then you’re the one dealing with the consequences, not him. You know what I mean? Well, I think in a certain situation like that, if that’s the only job you can get, take it because that just opens another door. You know? It’s a stepping stone.

Bob: Yeah, for now.

Angel: They say it’s easier to find a job when you have a job. You know what I mean? So, you know, somebody else will hire you if somebody took a chance on you. You know, just do well in that job, take it as a stepping stone. You know what I mean? And I think that’s where it all comes down to what you value.

Bob: Yeah, you just told me – you just said that – what happens if a younger person comes and hires me and, well I wouldn’t take it, absolutely because, you know, that’s something better than nothing. You know, this is the opportunity that like you said, it could be a bill that could be paid. It could be a debt that could be paid. You know, you got people out there living today that don’t even know how to pay a debt.

Interviewer: So what do you say to the woman who said to me not too long ago that it wasn’t worth her time to get out of bed for any $7.00 an hour job?

Angel: It’s not worth it to get out of bed for a $7.00 an hour job. Tell her to ask the children across seas, you know, who work for pennies a day.

Bob: Yeah.

Angel: I think that would change her mind some ‘cause the guys here work for a dollar a day. You know, scrub toilets, bust their butt for a dollar a day.

Interviewer: Um hmm.

Bob: You got people doing life that don’t have that opportunity no more.

Angel: There’s people who would beg for that job, that $7.00 an hour job.

Bob: And when I see a city bus anymore and ____ no more doing 25 to life –
Interviewer: So is a job a right or a privilege?

Bob: Well, it depends I guess how you – you know, well –

Angel: I think to me it’s definitely a privilege.

Bob: Absolutely.

Angel: ‘Cause just like with anything, you abuse it, you lose it. You know? And if it’s, you know, I think it should be a right. I think the world would be a better place if everybody was mandated to have a job, but I don’t think they can really do that.

Interviewer: So is there anything that you can tell that kid, that 16-year-old kid or the kid on the corner, is there anything that you can tell them that would lure them out of the life they’re in with easy money right now?

Angel: I would say it all looks good right now. You know? Fast money –

Interviewer: Yeah, but they feel untouchable.

Angel: It all looks good right now, the cars, the women, but guaranteed, without a doubt, you’re gonna lose it and you’re gonna fight always to get it back and you’re gonna lose it. Work hard now, save money, do right, study. You’ll have all those things and nobody can take them from you later, nobody. You know?

Bob: Absolutely. But everything’s a process. You know? Everything’s a process whether it’s good, bad or bad and good. You know?

Angel: Some people learn by example. Some people got to live it.

Interviewer: All right, so you go out, you’re doing interviews now. Let’s say that you go on 20 interviews, you get 20 no’s, 20 rejections. What’s your mindset for the next one? Are you –
Angel: It’s easy to think that you’re gonna be rejected on the next one and that goes back to where I said earlier, you know, and my past experience is I give up right when that door would open. You just got to stay persistent.

Bob: Yeah, just keep the faith. Just keep, you know, keep striving. You know?

Angel: Right. Somebody’s gonna say yes.

Bob: Absolutely.

Interviewer: Now, this is gonna sound crazy and I offer it only if it’s helpful, but what I’ve seen work for a lot of people is every time they get a no, they’re thankful for it because they know that every no is one step closer to that yes.

Bob: Absolutely.

Angel: That’s logical. It makes sense.

Bob: Yeah. Fair to say.

Interviewer: Yeah. You just got to make it through all the no’s.

Angel: Yeah, I think it’s – the big important thing is –

Bob: I feel better already by you just saying that.

Angel: Right.

Bob: That gives me a – you know what I mean? It just – it’s just – it gives me a bright feeling. You know? Everything’s gonna be all right. You know?

Interviewer: Yeah.

Angel: I just think it’s important that people – you know, some people burned all their bridges, you know, so it’s harder for them to be able to keep going through those no’s. You know what I mean? Like, they actually have to survive and they have nothing. And no one’s willing to help them. Those are the people who have it the worst because –

Interviewer: You got a girlfriend?

Angel: Yes. Me personally –

Interviewer: You got a wife?

Bob: Yes.

Angel: Me personally, I’m fortunate. You know, and I’m thankful for that, but I know a lot of guys who are not. You know, a good friend of mine was released last week. I said to him, “So what are you gonna do? Where you gonna go?”
“I don’t know, man.”

Bob: Yeah, these people that said, “God bless America,” –
Angel: “I have nowhere to live.” This kid had nowhere to live. And I’m looking at him and I know him from awhile back and what do you say to someone like that?

Interviewer: What’s his path? A homeless shelter and drugs?

Angel: Right. And the crazy thing about it now, the homeless shelters here, they’re full of drugs and full of violence. You know? It’s rough out there.

Bob: It’s like Julio ______ including me, to be honest with you. I’ve struggled with drugs and alcohol, you know, and today, I don’t live like that. You know, and thank God for that, but Jolio is a lot of kids that don’t have parents, that never see their parents and you’ve got to look at their – you know, a lot of parents had drug issues, never had time with the kids. They never, you know, never seen their kids and that’s like, you know, it’s you know, it just – it’s everyday living.

Angel: Right. A lot of kids are having kids now. You know?

Bob: Yeah. Girls having sex at 12 now.

Angel: Right.

Bob: Believe it or not. You know, what happened to the old days? You know? Your parents used to tell you, “Hey, wait ‘til you’re 21. Wait ‘til you’re 18.” You know, father and your mother’s on your back –

Interviewer: I’m sure you waited ‘til you were 21.

[Laughter]

Angel: That was good.

Bob: Wow. No, when I was 15, I was on my way. [Laughter]

Angel: Yeah, but I think ______ things from people not being parents. You know, fathers not being fathers, mothers not being mothers.

Bob: That takes a big responsibility.

Interviewer: Well, what did your parents tell you about how to manage money? Did they ever show you or tell you or nothing?

Angel: No.

Bob: Well my father told me years ago, “Listen, save some money. You’re gonna need it for a rainy day. Save some money.” One time he told me, “Hey, I gave you $40.00. What did you do with it? You blew it already?” You know, “Save some money.” It doesn’t matter how much amount. It’s all about waiting to use it wisely, how to use it wisely. I think that’s life in general.

Interviewer: Yeah, but do you think that your parents –

Angel: No, the way I grew up, my mother wasn’t really active with us. It was my stepfather and he was a drug dealer himself. And I’d walk into a room and him and his friends are counting piles of money and I’d see a bunch of stuff laying around and you know, I grew up I that environment. You know, it’s kind of crazy to say it, you know, a lot of people don’t think so, but when you grow up in that environment, you kind of want it. You know, I remember being a kid and I used to watch how they lived and that’s what I wanted for myself. It really was.

Interviewer: Well, how did their story turn out?

Angel: Dead.

Interviewer: And how about your parents?

Bob: My parents – my father just passed away.

Interviewer: I’m sorry to hear that.

Bob: Yeah. Passed away and he was sort of like a Brady Bunch kind of guy, like the father. He was like that. My mother as well too, but I was a – well, I’ve got brothers and sisters. My brother, he just did 25 years in the Navy. My sister’s a correctional officer. So they’ve been all successful. I was the only one that in and out of jail.

Interviewer: How many times you been in and out?

Bob: I’ve been here seven times. Yeah.

Interviewer: Okay, so –

Bob: Mess with the ___ drugs and the drinking. That’s why. You know?
Interviewer: So what do your brothers and sisters say to you? Do they embrace you when you come out and they say –

Bob: Absolutely yeah. You know, they’re gonna love me ‘til the day they die. You know, I love my sisters. You know, this is the way we are. But being upset with me, yeah, they be upset with me.

Angel: Of course.

Bob: You know, that love-hate thing, you know. Yeah, but they’ve been good to me. Thank God for that. You know, but you know, well, I love my family and my family loves me, but if I was to get let loose today, I could live on my own with my wife and kids, you know, and they say God bless America. You got people living in New York City, you know. I’m saying again, people say God bless America, it sounds like United States is the place to live. You know, other countries look at it like, “Oh, I heard United States got good jobs, got good schools,” which is true, but you got people living in New York, you know, can’t even get in the shelters, man. You know, they’re out in the streets, man, and that’s on a daily –

Angel: That’s everywhere.

Bob: That’s everywhere on a daily basis, man, and I’m like wow. You know? And today’s newspaper, they talk a lot about shelters, man. People’s flooded, man. The economy’s down, man.

Angel: I think it’s important for people in our situation going home for them not to be afraid to ask for help. You know?

Interviewer: What about that pride thing?

Angel: You got to let that go.

Bob: Yeah, you’ve got to let it go.

Interviewer: You’re a badass drug dealer.

Angel: You’ve got to let that go.

Bob: Yeah, man. Pride can become an enemy, man. Yeah.

Angel: It is, definitely. You know, people are willing to help, take that help. And I say for the people who are allowing someone to come back into their life, coming from our situation, you know, if you’re giving them the opportunity, you’re taking them back in, don’t throw in their face their past mistakes. That’s only gonna make them mess up again. Encourage them. Give them the love they need to grow. You know? You know, when you point at someone in their face and you tell them a certain something so many times, they’re gonna believe you. You know? And I think it’s important for people to encourage you, even though it may be hard for them. Because they’re used to you saying, “Oh, when I get out, I’m gonna do this, I promise. I swear. I love you.” Get out, do right for a few months and then you’re back to your old ways. So it’s easy for them to – I mean, you can’t blame them, you know, but I think it’s important for them not – if they love you enough to give you another chance, then really give you that chance. Don’t give you a half a chance.

Interviewer: Do you have any kids?

Angel: No.

Interviewer: You?

Bob: Yeah, I got two girls and all – my lifestyle when I was a drug addict and an alcoholic, my kids don’t live like that today. It took me to be scrape and asking for pennies and dimes for me to get a drug or a drink and through my experience all those years, my daughters don’t live like that today and thank God for that. You know, and _____ I told my daughter, “See the way I look? See the way I am? You know, this is because of drugs and the booze.” And today, my daughter’s, the one who’s 21, she’s a ____. The other one, she just graduated. She’s going to school for culinary arts. She wants to become a chef. You know, my daughter, she wants to become a chef. She says she loves doing that. She says she loves baking cake. That’s what she wants to become.

And I thank God for my – the struggles I’ve been through that I could live today and talk about it. You know? Today, people that’s 20 year old, 19, they’re dead now, you know, because of the drinking and the drugging. You know, and here I am saying, you know, I’m grateful for that.

Angel: I think it’s important for us to pass on the word.

Bob: Yeah, absolutely.

Angel: You know, get yourself together and give back. You know? There’s a lot of young kids, you know, like you said, what would you say to a young kid, there’s a lot of kids right now in the juvenile system. You know, my first arrest was at 12. So I think it’s important for a person like myself, once you get yourself stable enough to put some time to help the youth because that’s definitely the next generation, you know.

Bob: Yeah, and my daughters still come to visit me today with unconditional feelings. They say, “Listen daddy, I love you.” I ask my daughter. I say, “How come you really do love me? Tell me what it is that.”
“Because of – because how you’ve protected me. The things that you tell me, what to do, what not to do,” and that for me means a lot.

Interviewer: Well, I’ve got to tell you, after spending an hour with you talking about this, I’m really hopeful for you.

Angel: Thank you.

Bob: Wow, thank you. Thank you.

Interviewer: And I don’t want you to take this the wrong way, but I’m really proud of you.

Bob: Well, thank you very much.

Interviewer: You have learned such good lessons. The thing is now just applying that.

Angel: Right.

Bob: Absolutely, yeah.

Angel: That’s definitely the thing.

Bob: That’s gonna – has to come with commitment now, you know, patience and no drugs and no using and stuff. You know, you’ve got to live it, man. Life is once and it’s short, man.

Angel: Wisdom is knowing where to apply your knowledge.

Bob: Yeah and I truly thank God, I’m a spiritual man. I truly thank God that he gave me the opportunity of life. This says it’s not how many times you fell. It’s how many times you get up, brush off and continue on.

Interviewer: Right. Remember that on the interviews.

Bob: Absolutely. Okay.

[Laughter]

Angel: Definitely.

Bob: Yeah. Yeah. You know and I think God yes, I still have another, hey, life is good for me right now even though I’m incarcerated.

Angel: Right. It’s another chance.

Bob: Another chance starting with yourself, you know, start with your _____ and stuff like that. That comes first and then everything else falls in place, man. Like I said, if you tell me, “Yo, Eddie, I want you to go out there and put a shirt and tie on, go out there and get a job,” they’ll be surprised ___. I will come back with a job, man. That’s just the way I feel. That’s a big thing, man.

Angel: It’s important for people to work on themselves first. You can’t change the world if you can’t change yourself.

Bob: Absolutely.

Angel: You can’t change the things around you. Change yourself first and everything will come with it.

Bob: And that’s the truth.

Interviewer: Well, I’ve interviewed and hired, I don’t know, a couple hundred people in my life and there’s the big secret that I have learned is that most people come in feeling like, “Well, what am I gonna get out of this job? What are my benefits? You know, how much time do I get off?” The people who come in and they say, “I want to work hard and this is your business and I want to make you money.” Those people are rare.

Angel: Yeah.

Interviewer: So, you come in and you’re telling them what you can do for the boss, gives you a chance.

Angel: Right.

Bob: Right, absolutely. That’s a ___ yeah.

Interviewer: All right, gentlemen. Tom, you got any more questions?

Bob: No.

Interviewer: No? Okay. All right, thank you very much.

Angel: Thank you.

Bob: Thank you.

@GetOutOfDebtGuy

Meet Paul: LendingClub.com Borrower Taking Control of Debt Influenced by His Bipolar Condition

Steve Rhode — Thu, 27 Aug 2009 17:36:51 +0000

From How to Get Out of Debt

Since I heard about Lending Club, I have been fascinated with the concept and its potential to allow anybody help others with personal loans that will get them out of debt. I became a lender on Lending Club a couple of months ago and have since chipped into more than 40 loans already.

I asked Lending Club if I could interview a real borrower and they were glad to connect me with Paul, who share his experience as a borrower on Lending Club as well as his fascinating personal story.

Paul was kind enough to share his positive experience with Lending Club in helping him control and pay down his debt. He talked about how wonderful it was to see other regular people like him funded the loan, as opposed to the traditional cold banking institution that attempted to charge him upwards of 14% even with a pristine credit history.

On Lending Club, Paul found a community of compassionate lenders that helped him in his situation at a much more reasonable interest rate (around 9%), which has motivated him to keep up his payments and consider his Lending Club loan above any other debt when it comes to paying his obligations every month.

What started out as an interview about the benefits of borrowing from LendingClub.com turned into much, much more.

I applaud Paul for opening up and sharing his very personal inner story and struggles.

Our conversation went from a compassionate discussion about LendingClub.com to mental health issues, manic-depression, bipolar issues, health insurance issues, marital troubles, bankruptcy, repossession, potential separation, employment issues, medicaid, and some intense money troubles.

Paul openly talked about how his bipolar mental illness had lead to some debt that he jumped into during one of his manic, or up, phases. A very good conversation to help you understand how mental illness can lead to problem debt. And now that Paul is worried about having his health insurance company drop him for claims since he had needed to go to the doctor and hospital, I worry that he won’t seek as much help as he needs.

We were sitting outside a local shopping mall where we met and after I turned off the recorder we had a very personal conversation about his situation and I assured him that I was here for him if he needed any help to make it over the hurdle he is facing now.

While I was preparing his photo to post I noticed a very interesting quirkiness. While Paul is bipolar, the left side of his face as I looked at him was happy but the right side looked very sad.To really see what I saw, cover one picture with your hand and read the face.

<- Happy Paul

Sad Paul->

Listen to my interview with Paul.

You can subscribe to my series of debt interviews through iTunes by clicking here.

Transcript

Steve: Let’s just start with the basics, your name.

Paul: Paul.

Steve: Okay, Paul. And I found you through Lending Club, actually.

Paul: That is correct.

Steve: They were kind enough to find me a local borrower. And we’re sitting here in Raleigh, North Carolina. And can you tell me your story, your experience with the Lending Club, and how you got involved with it?

Paul: Well, I got involved with it about a couple of years ago, actually, when I started looking for a source to find some money to help me consolidate and pay off a credit card and a small, unsecured loan debt that I had incurred. Went to the banks first – my bank – and found that money was more expensive there for basically a signature loan or an unsecured loan. They wanted somewhere in the neighborhood of 14 percent interest.

I went home and I said, “You know what? I bet I can find something online.” And I just typed in “consolidation loans.” And after I went through about ten pages of all the hoakie scheme loans and gimmick loans, I found this little add for Lending Club, and it was secured by a bank. And I had heard something on television about online banks. So I wasn’t immediately skeptical, which I was nice, and so I just started to look at that and learn more about the Lending Club to help me to borrow some money.

Steve: So your bank wanted 14 percent. What did your rate end up being at Lending Club?

Paul: My rate ended up between 9.76, and this was I think, like I said, about a year and a half ago. And I was kinda surprised because I had a long working relationship with that bank and I also had A No. 1 credit, did not have a late payment since I established credit in my early 20s, did not have an unpaid bill. There was absolutely no blemishes on my credit record.

Steve: So do you feel you know that the people who lend the money are individuals actually like myself, ’cause I’m a Lending Club lender.

Paul: Yes.

Steve: So they’re people instead of a big bank. Does that make you think differently about who you’re borrowing from, and do you have a greater will to repay?

Paul: Mm-mhmm. Absolutely. Right away, I felt like in my first few interchanges with the people there at the Lending Club site felt like I was gonna be a part of a group, a part of a family, and that I would definitely be getting money from people who had compassion for my situation. But by the same token, I also felt like I had a greater responsibility to repay the money because of the faith that they had shown me in lending me this money.

Steve: How much money did you borrow, again?

Paul: My initial note was for $15,000.00.

Steve: And did you borrow subsequently to that?

Paul: No, no, no I have not. I’m still paying off that initial $15,000.00 note.

Steve: Okay. And that was about two years ago.

Paul: Mm-mhmm.

Steve: And did that debt consolidation loan, did it actually solve the problem?

Paul: Well, I wish I could say that it did. It solved the problem that I had at that time. Since then, I unfortunately had a couple of medical problems and, and probably only half of it was covered by insurance. So I’ve incurred considerable medical expenses since then, and I gotten deeper into debt. And I also recently lost my automobile. I had borrowed money to buy a new car a couple of years ago, around the same time that I signed up with Lending Club, and wasn’t able to keep up the payments.

So my debt situation is actually worse than it was, but in terms of the older debt, definitely I feel like it’s a good, steady, safe way to pay back the money, and it is – they don’t hassle me. There’s no collection calls. There’s no threatening e mails. Of course, I haven’t been late on a payment, but there was one time that if I may, I was considering bankruptcy.

And I called the Lending Club and I really – out of all the debts that I had, I didn’t not to discharge that debt. I wanted to try and leave that outside the bankruptcy so that I could pay that back. As it turns out, I didn’t not file bankruptcy, due to some restrictions. The Lending Club people were very, very understanding. They allowed me to catch up my payments into the next cycle without being technically late.

So within a 60 day period, I made two payments it’s just they were together. And they were generous enough, like I said, to show that as being on time. So I found them to be really easy to work with.

Steve: If your situation was different than it is today and you had some extra money, would you consider lending through Lending Club?

Paul: Oh, absolutely. I think it would be a great way kind of pay forward, the generosity that these folks have shown me. Now, of course, there’s always a motive behind it. You do want to make a return on your investment. You wand to make some interest off of it. But, again, I think it’s also an altruistic thing to do and I would definitely consider it should my fortunes change.

Steve: So how long ago was it that you were considering bankruptcy?

Paul: Actually, it was earlier this year, and had some unfortunate property situations. I transferred title of my home to my spouse a year and a half ago for her security, really nothing more than she would have security in case anything happened to me. And they said that the bankruptcy courts don’t look kindly on that. They think that you’re trying to basically alleviate your assets. So even though that wasn’t the case, I still chose not to take a big gamble and pay legal fees up front and then lose the bankruptcy case.

Steve: I’ve seen that happen in transfer property. So let’s say your situation doesn’t change in the next year. Would you go back and revisit bankruptcy again?

Paul: I don’t think so, because I don’t have what I would consider to be insurmountable debt. Most of my – I think my highest balance right now is $10,000.00, which is the balance that I owe the automobile company for the difference between what they sold my car and the difference of what I owed on my original car loan. The other debts that I had were all $2,000.00 and $3,000.00 medical bills. I think the largest one was $4,100.00.

It’s something I think I could manage. And, again, like I said, I definitely do not want to default on the loan that the Lending Club gave, ’cause I wanna try and use that as a source to rebuild my credit, to show that I was able to repay a loan even during my direct financial circumstances.

Steve: Do you know if Lending Club reports to the credit bureaus?

Paul: Yes. Evidentially, they do, and they – like I said, they are affiliated with a bank, Western Bank NA, which is I guess somehow underwrites and helps them with administration procedures in some way. I’m not really sure. But I do know that they do report if you are delinquent or default, just the same as any other loan.

Steve: So let’s talk for a minute about the process of applying for the loan. Was it you went online? You filled out some information. Were you pensive or anxious to watch your loan being funded?

Paul: Well, that was exciting. I knew I had great credit, and I had really never borrowed any large sums of money outside of the car loan. And honestly, I didn’t think I had much of a chance. The loan – when I started the process, and they began to fund the loan, nothing happened for the first few days, and I basically wrote it off and said, “Nothing’s gonna happen.”

All of a sudden, a few hundred dollars would come in from a lender. Then another few hundred. And then a gentleman gave $1,000.00. And then another gentleman gave like $8,000.00. And I was amazed. It was as if pennies were falling from heaven. And I felt really, really stoked when I found out that it had fully funded and really pleasantly surprised.

Steve: Do you mind if we talk for a minute about your medical situation that caused your finances? It sounds like it was a tipping point for you. Is that right?

Paul: Yeah. It’s a number of things. I had some back issues that involved pain clinics and a very expensive series of injections and radiological studies that my insurance basically had reduced the amount paid that they’re allowing on that. And then coupled with that, I suffer from a mental disorder, bipolar disorder, and I have really had a hard time securing and keeping stable employment. I’m in the food service industry. It’s easy to find jobs, but it’s not always easy to keep them when you suffer from depression.

Steve: Well, let me just say that you appear to be dressed in a kitchen attire with a thermometer and other goodies there. So you work in a kitchen and you’re on your feet all day.

Paul: On my feet all day. Another thing that I have is (Laughs) I suffer from arthritis, acute arthritis in my feet joints. I’m all the time having to go and get treatments and painkillers and lots of expensive medications. It just seems like the harder I try, the harder it is for me to get ahead. I don’t make a tremendous amount of money. I’m in a managerial position. My wife works in a retail job making lower to mid management pay. Combined, we probably don’t make $65,000.00 per year, so it’s tough. And we’ve got two sons. One just went to college this past weekend, **** University.

Steve: Wow. So I guess you’re looking at student loans for that?

Paul: Well, absolutely not. We’re actually fortunate that he was able to get a full scholarship on music. Yeah. He auditioned, and he’s quite talented. He basically got himself there fully paid, all on his own. He went to several competitions. He got his name around nationally, regionally, nationally, and somewhat globally. He had people from Europe that know him. He was highly recommended to Vanderbilt. And then he applied and they gave him a full scholarship.

Steve: You must be one proud father.

Paul: Oh, proud and relieved at the same time. Not having to foot that bill I think – Vanderbilt is kinda pricey as private institutions can be. And then I’ve got a 12 year old who’s a middle schooler, typical needs, lots of supplies, lots of clothes, lots of intramural sports and soccer and things that he needs to lots for, and a wife who likes the finer things in life. I just – many days I struggle with just being able to make it through with a positive attitude. I mean, I feel like right now my debts are ruling my life.

And I don’t feel completely despondent because there are people and institutions like the Lending Club out there. I don’t necessarily think that I’ll try and get another loan, because right now I know I wouldn’t be able to qualify. There’s been some activity on my credit report. The car voluntarily repossession is probably a big dagger. One medical bill for only about $500.00 was turned into collections. And that shows up as a bad debt.

Even though I am paying them off little by little – I fully intend to repair my credit. I want it to be like it was. I had nearly 800 FICO score. I walked on the car lot and the guys said basically, “You can have anything out here.” All I had to do was sign and drive. And I made some foolish decisions. I was in the midst of one of my manic cycles in regard to my illness. I had a summer where I purchased a car and, a motor scooter in the same month.

Steve: Well, let’s talk about that. Well, first off, what kind of scooter did you buy?

Paul: It was a really nice Honda 650 – what do they call it? Silver Wing. It’s one of the Maxi scooters. And you just sit on it and pull the handle and drive. And it’s capable of 65 miles an hour plus on the interstate. So –

Steve: Well, let’s talk about the – how being bipolar affects your spending. You mentioned it just a minute ago, but it’s important for people to understand that.

Paul: Yeah. When you’re feeling manic and when you’re –

Steve: And can you tell us what manic is?

Paul: Well, manic is the high cycle. Bipolar consists of high cycles and low cycles, low being depression symptoms, and high being manic symptoms. Pressured speech, manic – when you’re manic, you have pressured speech. You have racing thoughts. You have an inability to control sometimes emotions, spending sprees, reckless behavior, hyper sexual activity. Lots of things occur that are very difficult to control. And for myself, I know the spending was a way for me to calm myself and make myself feel better and give myself self worth because it’s – and I hate to sound so negative, but I’m in a very difficult marriage.

I felt like it was time for me to have something nice. I had never used my credit. I always had great credit. It was always there if I needed it. I said, “Well, you know what? I deserve it.” And I went and put those two vehicles on finance, fully intended to pay ’em back. With my job history, unfortunately, I’ve had I think I counted up the other day 30 jobs in 35 years. So that’s not a very stable history.

Steve: Did you get a physiological rush when you went out and bought? I mean, you talked about how the mania –

Paul: Yeah, in some ways you kinda don’t even realize what you’re doing. You get caught up in it, the spending. It makes you feel good. It makes you feel powerful. It makes you forget your troubles. It’s very much like taking a drug or – it is exhilarating. And then once the payments start rolling in and the statements start rolling in, then everything crashes and you are brought back down to reality, and sometimes it can lead you back down into a depressive cycle. And that’s exactly what I’ve done is basically rollercoastered the whole time.

Steve: And the problem with depression is that once you get in that state, it’s hard to come up with a plan or to see a way out, isn’t it?

Paul: Yeah. And I’ve had lots of people to help with that, and people give me advice. Do a lot of reading on the Internet, a lot of books. I see a physician registry and he prescribes medicine for me. I feel like right now I’m in a very stable state of mind. The past two positions I’ve had have been really nice. I’ve stayed there over a year. I seem to be able to relate to people better. I’m a good Christian person. I’ve always been a churchgoer.

I believe in mankind. I believe that people are basically here to help on another and that we’re all inherently good. It’s just that some of us lose the way. And, unfortunately, evil things happen.

Steve: Well you know that if you need any help, you know how to get in touch with me and contact me and I’m always here for you.

Paul: Absolutely, absolutely.

Steve: And you made a comment when we first approached each other that you feel like sometimes you’re the working poor. Now people say that – some people say that there is no need for healthcare reform. What do you say anything out that? Do you think that there is enough healthcare out there?

Paul: Absolutely not. I think there is definitely a need for reform in that insurance companies should not be given the power to govern whether somebody gets better or not, or lives or not. That’s basically what’s happened through their decreasing the amount of paying of these expenses. And you pay heavily into these risk pools and thee insurance companies. And the sicker you get, the less they pay. And I believe that they’re necessarily has to have some policing of the insurance companies.

I don’t necessarily think that there needs to be more insurance available. But I do think that the rates need to be reasonable or the average person. I think that the services that are covered need to be increase.

Paul: So have your premiums gone down. No, the premiums have gone up, and –

Steve: And the coverage has gone down.

Paul: The coverage, and the types of services that are offered and covered are less. And it’s basically like I said, the sicker you get, and especially if you have a chronic situation that requires maintenance medication, such as mine, they can even cancel your health insurance. I live every day in fear of that. God forbid if I ever had a terminal disease or heart attack or something that came up that needed immediate care, the first thing I’d think about was which hospital I go that’s gonna take Medicare or Medicaid to be able to help me pay for it. I guess that would be Medicaid.

Steve: Are you on Medicaid now?

Paul: No, but my children have been. At one time, we had to put our kids on Medicaid because I didn’t have insurance for a while. My wife wasn’t working at the time and –

Steve: And what was that experience like?

Paul: Well, I tell you, it was very humbling. Being on public assistance is not something that people in my family have been used to. It something you always – stereotypically, you see minorities and illegal aliens and other people end up being the ones in those offices. And here I am a middle aged white guy just really in a very difficult situation, very humbling, and very, in some cases, demoralizing. But it was there when we needed it.

We only needed it short term and it was wonderful. The state of North Carolina in particular was wonderful in terms of providing insurance for my kids .they never questioned any of the payments for anything, and the dignity was uphold with the utmost.

Steve: Thank you. One of the things that I have just recently done is traveled around the entire northeast of the United States. And I’ve been talking to people about the credit and debt issues. And one of the questions that I’ve asked almost everybody is I come in contact with so many people every day that are struggling and have problems. And they often kind of suffer in silence. They feel like losers and rejects and alone. What advice do you have for people that are feeling like that?

Paul: Well, I just have to say lean on your faith. If you do have a faith in a higher power or some type or religious support system, definitely begin there. Always remember that you’re not your illness, and you’re not your debts. Your self worth is not determined by either or diagnosis or the amount of debt that you have. Those are simply choices that were made, and choices that you have to make to get out of those situations.

You just need to keep your chin up. For me, it is a struggle, won’t say that I’ve mastered any of that. I do know that there’s help out there. Please, make yourself available to it. Get on the Internet, get o the telephone. Public Access channels on television often have information on local help for debt and debt situations. So seek out help.

Steve: Have you ever been homeless in your life?

Paul: Never been homeless, not to that point. But I have spend a few select nights in my car. That wasn’t fun. I’ve had to forego dinner invitations because I didn’t have enough to pay for the check and I’ve had to forego a lot of leisure actives, haven’t had a vacation in six years. It leads to a lotta stress.

I do play music. I play a musical instrument, and I sing an I –

Steve: What do you play?

Paul: I play trumpet, and sing in a local oldies sort of a retro band. We have a lot of fun and we make a little bit of extra pocket change doing that.

Steve: So if you could take a magic vacation, where would you go? What would you do?

Paul: Probably go back to – I’d like to go to Disney again. Disney World was a lotta fun. I enjoyed Mexico. Been there a while back. Anything where there’s good food and nice people and clear water to swim in.

Steve: Is today a good day for you?

Paul: Today’s been a great day, yeah. A small victory for me is just being able to get through the day without punishing myself or getting down on myself or saying harsh words to someone else, feeling like I did a good job and I did the best that I could. I work with elderly people, so me, I get a real big kick out of being able to enrich their lives and talk to ’em.

I spoke with a lady today and said goodbye to her. She was leaving our facility, and she’s a week and a half shy of her 90th birthday. She has terminal cancer. And I told her that I was gonna be praying for her and that I was honored to have known her for the short time that I’ve known her, and that she had touched my life. It was a very poignant moment for both of us. That’s the way I am. I feel very compassionate towards other people and I hate to see other people suffer.

Steve: Well, Paul, I think that everybody who is listening to your words right now, who can hear your voice feels lucky to have met you and really appreciate your honesty and opening up and sharing some very intimate details.

Paul: Thank you.

Steve: It will help a lot of people and I appreciate it very much.

Paul: Thank you. I appreciate it, Steve.

@GetOutOfDebtGuy

Jannelle is Young, Homeless and Starting Over.

Steve Rhode — Wed, 26 Aug 2009 12:49:01 +0000

From How to Get Out of Debt

Jannelle is only 21 but for the past six weeks she has lived at the rescue mission and has had a place to sleep off the streets. In fact today she landed a job at a new restaurant at the local mall.

While she previously worked in a management position in Atlanta at a marketing firm, she has struggled with keeping a roof over her head since she moved to Raleigh, NC.

Listen to Jannelle talk about being homeless.

You can subscribe to my series of debt interviews through iTunes by clicking here.

Transcript

Interviewer: So we’re standing down in front of the Raleigh Rescue Mission and I’m with – what’s your name?

Jannelle: Jannelle.

Interviewer: Jannelle? And how do you spell that, Jannelle?

Jannelle: J-A-N-N-E-L-L-E.

Interviewer: All right. And a minute ago we were talking about people who have had a home and have suddenly found themselves without a home. Can you tell us what your story was, what the tipping point was for you?

Jannelle: Well, I was in Atlanta. I was a training manager for a marketing firm, and I decided I didn’t want to do that. I wanted to be a little more stable, so I moved to – with my mother in North Carolina and I was there – I was with her for a couple of months since February and then I guess we started falling out. She got a new boyfriend and I had to go. So I came down to Raleigh Rescue Mission. I actually just got a job today, so I’m excited; should be outta my situation pretty soon.

Interviewer: What are you gonna be doing?

Jannelle: Cooking.

Interviewer: Oh, excellent.

Jannelle: It’s a new restaurant in Crabtree Valley Mall just is opening up, so I got it.

Interviewer: So was that event which led to you ending up at the rescue mission – was that completely unexpected?

Jannelle: Yeah. Well, my mom actually lost her place, and she moved in with her boyfriend, and I stayed there for about three weeks, not a situation I wanted to be in.

Interviewer: Why?

Jannelle: ’Cause they were starting something new, and I didn’t know him really that well. He was a good guy. I mean I just – I’m grown now, so I felt like I could do it by myself.

Interviewer: How old are you now?

Jannelle: Twenty-one.

Interviewer: How old?

Jannelle: Twenty-one.

Interviewer: Twenty-one.

Jannelle: Yeah.

Interviewer: And once you get this job and it starts, are you gonna be able to get out on your own, you said?

Jannelle: Definitely. It’s fulltime finally, and I should – yeah. I don’t have any, you know, vices or anything like that, so I’m definitely optimistic about my future.

Interviewer: Is this the first time that you’ve had to spend time at the rescue mission?
Jannelle: Yeah. I was – when I was with my mom, I was kinda in and out the house, but this – I guess for this last six weeks, it’s been like a permanent kinda – yeah.

Interviewer: So for all of us who don’t know what it’s like to live at the rescue mission, can you fill us in?

Jannelle: It is what you make it. I guess I had problems with depression when I was a teenager, and I’ve been more excited about life being here than I was as a teenager because I know, you know, I can – you know, my future’s up to me. I don’t have any other factors except, you know, how hard I work, so I mean you gotta deal with a lotta different type of personalities. Some people have mental disorders and such, but again, if you keep to yourself and keep focused on your goals, I mean success is imminent.

Interviewer: All right. And before you came here to North Carolina, did you have any credit or debt or financial obligations?

Jannelle: I had a credit card, about $50.00 – $500.00.

Interviewer: All right, you gotta go.

Jannelle: Yeah.

Interviewer: All right. Here you go, Jannelle.

Jannelle: Thank you.

Interviewer: Thank you. Bye.

Jannelle: All right.

@GetOutOfDebtGuy

Meet Virginia. Homeless But Hopeful.

Steve Rhode — Wed, 26 Aug 2009 10:39:23 +0000

From How to Get Out of Debt

Virginia was a very nice woman that I met in front of the Rescue Mission. She was nice enough to share her story about being homeless and starting over.

She was working but the company went bankrupt and her unemployment ran out and then she found herself homeless.

What surprised me the most was the story she told me about still owing student loans after 13 years and having her income tax return intercepted for the last four year to pay for the past due student loan debt.

I’ll let you listen to the interview and the advice Virginia Crowder gives as she talk candidly about starting over.

Listen to Virginia talk about being homeless.

You can subscribe to my series of debt interviews through iTunes by clicking here.

Transcript

Interviewer: Okay, I’m standing here with?

Virginia Crowder: Virginia Crowder.

Interviewer: Virginia, you just told me that you’re homeless for the first time. Is that right?

Virginia Crowder: Yes, sir. I’ve been homeless now for two years.

Interviewer: And can you tell me what the tipping point was for you? You had a home before. You were renting. Is that right or you owned a house?

Virginia Crowder: Yes, sir. I was renting.

Interviewer: And then what happened?

Virginia Crowder: My company that I was working went bankrupt and then I went on unemployment and my unemployment ranned out and so I was unemployed, so I didn’t have anywhere to stay, so I’ve been here ever since.

Interviewer: Now what happened? You kind of slowly fell behind on the rent. Is that right?

Virginia Crowder: Yeah.

Interviewer: Until you get – did you get evicted?

Virginia Crowder: No, I had to move because my unemployment money ran out and I didn’t have a job.

Interviewer: So is it difficult to get a job when you’re living at the rescue mission?

Virginia Crowder: Oh, no. No, it’s not. I had a lotta temporary work in between the two years that I’ve been here, but it was just temporary with a contract of maybe a month or two of work, but now as of last week God has blessed me with a fulltime position, so –

Interviewer: What are you doing?

Virginia Crowder: – now I work for Helping Hand Mission on Rock Quarry and I’m kinda happy with that. I haven’t had a job in two years now and so I finally got employed last week.

Interviewer: And what are you gonna be doing there?

Virginia Crowder: It’s a big thrift store, so I like, you know, situate washing machines, irons, sports, clothing, TVs, furniture. It’s a great big thrift store warehouse.

Interviewer: Okay. And before you were displaced or however you say it (Laughter), replaced or something, did you have credit and debt? Did you have financial issues?

Virginia Crowder: Well, I do have – I am in debt in another state right now and so I’m like trying to like get my debt back in – now that I’m working, I can probably make some kind of arrangements to make payments for – I do have a student loan that I have to pay, so.

Interviewer: Besides the student loan, what else are you paying on?

Virginia Crowder: I have child support. (Laughter)

Interviewer: Mm-hmm. You have to pay child support?

Virginia Crowder: Yes, sir. Thank you. I have child support.

Interviewer: Why do you have to pay child support?

Virginia Crowder: Because I’m separated from my children. They’re with their father.

Interviewer: Oh, okay. And do you have a court order to pay?

Virginia Crowder: No, not yet. I might get one soon now that I’m working, but see my worker knows that I wasn’t working at the time and that I was here homeless because of my employment and with the economy and all that it was – you know how that was.

Interviewer: Oh, yeah.

Virginia Crowder: Trying to find work, man, and there’s still people trying to find work, so things are getting better, you know, and I just went to church and I prayed. I prayed to God, “Please come to me because I’m ready to get outta here and I wanna do better, you know. I need my own.” And so finally like last week I got this job and I feel so blessed.

Interviewer: The – you said that you owe a debt in another state.

Virginia Crowder: Yes, sir. It was a –

Interviewer: What kinda debt is that?

Virginia Crowder: Oh, God, that’s about – it’s about 13 years old. It’s a student loan –

Interviewer: Student loan.

Virginia Crowder: – when I was much, much younger than I am now, and I kinda like gotta get that in order – you know, to keep them from garnisheeing money from me in my income tax and –

Interviewer: Have they taken your income tax before?

Virginia Crowder: Oh, yeah, every year. Every year, I have no money. I have not gotten income tax money now in four years because everything that they find on computer, they just swipe it up because I owe this money.

Interviewer: Have you tried to work out an arrangement with them?

Virginia Crowder: I haven’t had work in two years.

Interviewer: Yeah.

Virginia Crowder: I’m just now getting work.

Interviewer: Okay. What does it feel like to live at the rescue mission?

Virginia Crowder: I tell you, I believe in the Lord and like I’m 56 years old, and I’ve traveled all over the world because my husband was military for ten years and so I’ve never been homeless in my life. He’s deceased now and so like this has been an experience to me because I get to appreciate the things that the Lord provide for people that get in these type of situations, you know, where they don’t have shelter or their finances or they can’t afford their rent and they need somewhere to go to take their children, you know. And we pray a lot here in the rescue mission, and I get to find out blessings and to learn to be thankful for the things in life so when I go back out here, I’ll know, you know, to take care of the necessities in life, you know, the things that I’m blessed with and be thankful.

Interviewer: Even in your current situation, you find things every day to be grateful for?

Virginia Crowder: I have enjoyed this Raleigh Rescue Mission. I’ve met some of the beautiful people. I’ve met some beautiful people here and I’ve enjoyed them, but I feel God has put in my life it’s time for me to go on, you know. I’ve been here long enough, so it’s time for me – I have a daughter that’s in college, and I’d like to go and get my solid foundations for her.

Interviewer: Mm-hmm. Now you mentioned that your husband was deceased but your children are living with –?

Virginia Crowder: Yes, I have five children. I have two in the state of Massachusetts and I have three here.

Interviewer: Okay, so it’s the two in the state of Massachusetts which must be under 18, is that right?

Virginia Crowder: They’re over 18.

Interviewer: Over.

Virginia Crowder: As a matter of fact, I have one 34 and one 30.

Interviewer: Have your children offered to help you?

Virginia Crowder: No, they’re so far away from me. They don’t like the South, you know, and they feel like my mistakes I should deal with. (Laughter)
Interviewer: All right and –

Virginia Crowder: But you know what I’m saying. So God is with me. God is with me.

Interviewer: People that have troubles, whether they be housing troubles or financial troubles –

Virginia Crowder: Oh, yes, yes. A problem is a problem.

Interviewer: Many people feel that somehow they’re losers or rejects or bad people in some way.

Virginia Crowder: That’s not the way to feel. If you got the Lord in your life, He’ll be there for you. All you got to do is obey Him. Don’t disobey Him because He’s not there to help you, you know, and I’ve done it so many times, so I know not to do it, you know, at my age because it’s time –

Interviewer: Not to do?

Virginia Crowder: Disobey the Lord. I feel like it’s time for me to establish something so I don’t have to feel like I’m not going anywhere in life.

Interviewer: Mm-hmm. What do you have to say to the woman who is going to be homeless for the first time tomorrow?

Virginia Crowder: Oh, all I can say is have faith in herself. Please don’t get stuck in the same – stay stuck in the same situation. Look at it as a beginning –

Interviewer: What are –?

Virginia Crowder: – and you’re gonna succeed this beginning. You’re gonna overpower this thing that’s, you know, holding you back.

Interviewer: What are the dangers to watch out for?

Virginia Crowder: Drugs. Don’t get out there, drugs, alcohol on the streets or in the bad atmosphere. All you got to do is go to church, pray, enjoy the people, enjoy what the people here are here for to help you with. Let them help you. Don’t go out on the streets looking help. Let the people, the mission, the Salvation Army, the churches, the ministries, let these people help you and you will get there.

Interviewer: So there are good people out there.

Virginia Crowder: Beautiful people, beautiful people. I love them. They’ve been here with me now for two years, going on three years, and I love them, and I’ll never forget them my whole life.

Interviewer: Thank you very much.

Virginia Crowder: Thank you.

@GetOutOfDebtGuy

Emily, 14 Years Old and Already Wise About Money and Credit?

Steve Rhode — Mon, 24 Aug 2009 23:56:02 +0000

From How to Get Out of Debt

Emily is 14 and the daughter of Hillary who I also interviewed (click here).

At 14 Emily is already working and saving her money for something in the purchase. Is it college, riding horses, or another kind of horse, a Mustang?

Listen as Emily shares with us what she has learned so far about money and how she plans to apply that knowledge.

Listen as Emily Talks About Money.

You can subscribe to my series of debt interviews through iTunes by clicking here.

Transcript

Interviewer: So just for the record, state your name for me.

Emily Clagett: Emily Clagett.

Interviewer: All right. So I’m traveling around the country, and I’m talking to people about money, credit and debt and you’re one of the young people that I hear about, right? How old are you?
Emily Clagett: Fourteen.
Interviewer: And have you studied money or finance or credit in school at this point? You’re going into the ninth grade –

Emily Clagett: Ninth grade.

Interviewer: – right?

Emily Clagett: Yeah, but no.

Interviewer: No talk about it at all?

Emily Clagett: Well, I learned to write checks when I was in like first grade.
Interviewer: Well, what about saving money? Are you – have you been taught about saving money?

Emily Clagett: Not really.

Mother: Well, I have to disagree with that. (Laughter)
Emily Clagett: Well, like in school or from my mom or my parents?

Interviewer: In life, in life.

Mother: In life.

Emily Clagett: In life? Yeah.

Mother: Mm-hmm.
Interviewer: What have your parents taught you?

Emily Clagett: Not to go spend all the money I have because it’s just – gonna regret it later.

Mother: Well, what do we usually do when you make money? Do you get to keep all the money that you make?

Emily Clagett: No.
Mother: No. What do you usually have to do?

Emily Clagett: Give some of it to my mom.

Mother: Mm-hmm. And do you know how much money you have saved by doing that from babysitting and working at school?

Emily Clagett: No.
Mother: You have close to $500.00 saved.

Emily Clagett: Cool.
(Laughter)
Interviewer: So how does it feel to have $500.00? That’s a lotta money for a lotta people.

Emily Clagett: Well, they’re not gonna let me use it, so. (Laughter)
Mother: Well, not right now.

Interviewer: What would you use your money for if you could, your saved money that you’ve made?

Emily Clagett: Well, I’m gonna buy a Mustang.

Interviewer: Mm-hmm.
Emily Clagett: They don’t think it’s gonna happen but I am.

Interviewer: Okay, what else?

Emily Clagett: I don’t know.

Interviewer: And –

Mother: If you weren’t – sorry. If you weren’t saving for a Mustang, what would you be saving for? Would you be saving for a specific thing or would you just keep the money in case, until something came along? Like when Steven saved his money and then needed to use it to buy himself a new car, he had all that money. You know, what do you think? Would you save for a specific thing or would you just keep it?

Emily Clagett: Well, I guess I would just keep it.

Interviewer: Do you know kids in your class who just go out and spend money, just buy things they don’t necessarily need?

Emily Clagett: Yes.
Interviewer: And why do you think they do that?

Emily Clagett: Well, ’cause it’s not their money. It’s their parents’ money.
Interviewer: What kinda stuff do they spend money on?

Emily Clagett: Clothes, phones, stuff.

Interviewer: So have you thought about maybe having – getting a job at some point in the future?

Emily Clagett: Well, I kind of already have one, but it’s only in the summer and I guess, yeah.

Mother: Well, then you also have your standing babysitting dates –
Emily Clagett: Yeah.
Mother: – during the year. I mean you do make money during the school year, not a lot, but you make some.

Interviewer: What about – have you thought about college maybe?

Emily Clagett: Like saving for college?

Interviewer: Like going to college. Have you thought about going to college?
Emily Clagett: Yeah.
Interviewer: And you’re thinking about that’s something you’d like to do?
Emily Clagett: Yeah.
Interviewer: So have you thought about how you’re gonna pay for college?
Emily Clagett: No.
(Laughter)
Interviewer: Do you have a credit card?

Emily Clagett: No.
Interviewer: Have you thought about having a credit card?

Emily Clagett: Well, I wish I had one, but my parents won’t let me get one.
(Laughter)
Interviewer: Why do you wish you had a credit card?

Emily Clagett: ’Cause then I wouldn’t have to carry around cash.
Mother: Well, Emily and I were just talking about something like that today. She was asking me how store credit cards work as opposed to just a Visa card or MasterCard or something. So I explained it to her and –

Emily Clagett: It was a long time ago.

Mother: No, it was this – yesterday, sorry. And she said the stores that she and her friends like to go to like American Eagle and Aeropostale and all of those things – sorry, Aeropostale. We used to call it Aeropostale back in the day. She said they would do better if they just did a debit card for kids where kids could take in their money, give them their money and they would hold it for them and then be able to spend money there. I thought, “Okay, that’s good.”

Interviewer: I think those stores would like to do that.

(Laughter)

Mother: They would probably like that.

Interviewer: That’s a good idea.

Mother: That’s a good idea. Mm-hmm.

Interviewer: So let’s talk about maybe money troubles. Have you known anybody that’s had money troubles?

Emily Clagett: No, I don’t think so. No.

Interviewer: Nobody in school that you’re aware of?

Emily Clagett: Not that I know of.

Interviewer: Have you known anybody that’s lost a house, you know, foreclosure or anything like that?

Emily Clagett: No.

Interviewer: Nobody in your life that you know of has struggled with money?

Emily Clagett: Well, like I know people sometimes are like, “Oh, we can’t spend a lot ’cause the economy’s down and we don’t have a lotta money to spend.” But not like to the point of losing their house or something.

Interviewer: All right. So what do you think when you hear people say that? Is that – that’s okay with you if they don’t go out and spend or do you feel one way or another about that?

Emily Clagett: Well, I mean like if they can’t afford basic things, I’d feel really bad for them and then if they’re just like, “Oh, we can’t go to the mall every week,” it’s like okay.

Interviewer: So what role does money – do you think money will play in your life as you grow up and get older? Is it an important thing or is life more important?

Emily Clagett: Well, I don’t know. Having money lets you have a better life, so I guess it’s kinda like – I don’t know – even.

Interviewer: So people that have more money are more better?

Emily Clagett: No, but people who have enough money to have a good life generally have better lives. Like not – I don’t know. (Laughter)

Mother: You mean people whose basic needs are met.

Emily Clagett: Yeah, that’s what I mean.

Interviewer: In a comfortable way.

Emily Clagett: Yeah.

Mother: Yes.

Emily Clagett: Yes.

Interviewer: All right. And you know the difference between what a debit card is and a credit card?

Emily Clagett: Now I do.

Interviewer: What’s a debit card?

Emily Clagett: A debit card is where you like – you already have money set aside for it and they just take the money directly when you use the debit card and then a credit card is when you – they like bill you for it and then you have to pay them back.

Interviewer: Okay. When you go into a store and they’re having a sale or an inducement – take out a credit card today and save 10 percent off of your purchase – is that a good thing to do to get that card?

Emily Clagett: Well, no. I don’t think so ’cause if you get the card and you – if you get the card and then you spend a lotta money at the store you still owe them a lotta money and then if – with interest you’re gonna have to eventually pay more than that 10 percent you got off.

Interviewer: Very smart. How about something that’s like you can have it today – you can have a Mustang today and not make any payments for six months? Would you be more willing to buy a Mustang then?

Emily Clagett: No, ’cause you still have to pay for it. It’s not like it’s free or something.

Interviewer: I just want to hug her.

(Laughter)

Mother: Well, let’s see when she turns 20 and 21 if this all still stays in her head.

Interviewer: I’ll be back and we’ll play this.

(Laughter)

Mother: Yeah, you have a very good grasp on how it works and how they entice people into spending their money when they really don’t have the money to spend, so – but you aren’t involved in that spending yet, so when you really and truly could get these things, I wonder if you’ll still feel this way. What you know and what you do don’t always work the same way.

Emily Clagett: Good.

Mother: It’s not always the same.

Interviewer: All right, well, thank you, Emily.

Emily Clagett: You’re welcome.

Interviewer: Thank you, Hillary.

Mother: You’re welcome.

(Laughter)

@GetOutOfDebtGuy

Hillary Talks About Tight Finances and Making Ends Meet

Steve Rhode — Sat, 22 Aug 2009 15:31:29 +0000

From How to Get Out of Debt

Hillary confides in us about what life is like living month to month and the stress and lack of sleep she lives with when she is stressed.

This is an excellent interview to listen to if you are stressed about money or feel like you are struggling all alone with money troubles.

Hillary provides advice from the heart based on what she has learned from being squeezed by money and living through her battle with cancer. She also provides advice for other women who might be worried about being open with your spouse about the reality of the money situation.

Listen to Hillary talk about debt.

You can subscribe to my series of debt interviews through iTunes by clicking here.

Transcript

Interviewer: All right, so I’ve been traveling around the country talking to people about money issues, credit and debt, all that sort of thing and, you know, without revealing too much or whatever you want to reveal. As you know, I lived through difficult financial problems in my life, went bankrupt and all that, and have you had an opportunity to live through some stressful financial times yourself?

Interviewee: Well, yes. We were in debt before and we got ourselves out of debt and we’re not in debt now. We just don’t make enough money really. We know it’s not that we owe people anything. It’s just that we’re going paycheck to paycheck trying to pay our bills and our bills are not outlandish. But it’s hard to figure out how to make the money we need to make and live the way we want to live with our family, and I don’t mean material-wise, but spending time with our family and just doing what we want to do and paying for it. (Laughter)

Interviewer: What kind of stress does that create when you look at the end of the month and it’s – you know, everything’s coming together?

Interviewee: Well, it makes me not sleep, makes my husband cranky. You know, it seems like with Steve’s job he makes a big chunk of money and then, you know, you get that check in the morning and by the afternoon it’s all gone ’cause it’s all paid out, so you feel like, “All right, we’re gonna be fine and this time we’re gonna be able to put this away and we’re gonna be able to do this and that.” And then when it comes down to it, that doesn’t happen and it’s – it makes me in one way hyper-conscious of what we spend.

Like we went out to dinner last Sunday night. We went to the funeral home to see someone and then stopped to get dinner and the bill came. I was like, “Forty-eight dollars. Oh, my God. I shouldn’t have spend that money. We should have gone home.” But then other times, you know, I go to Target and I buy the things we need and the things are gone. I’m like, “Oh, it was only $60.00? That’s it?” So I don’t know. It makes me conscious of it at odd times.

Interviewer: When people run into trouble, oftentimes they think that the first thing they need to do is cut out anything in their life that might be fun.

Interviewee: Mm-hmm.

Interviewer: Is there a balance there? I mean do you have to leave room for fun even though you might be –?

Interviewee: Well, absolutely. You have to figure out how to do it in a way that doesn’t cost as much or – I don’t know – sometimes I feel like you do have to go and blow it and do something that you really shouldn’t do just ’cause it’ll make you feel better. (Laughter) But I don’t recommend it, but yeah, you do have to find the different ways to do things. One of the things that we really, really like and the things that I like to do is go to the gym, and I’ve started thinking about my gym membership. I’m gonna have to cut that out.

But then I had a brainstorm today. I was like, “You know, I could join the community center and use their gym and weight room. Instead of paying $90.00 a month to the gym, it’s gonna be $200.00 or $300.00 a year to do it for both of us.” So I think you can figure out the things you want to do but do it a different way.

Interviewer: Some people have a negative stereotype or negative feelings about others that are living through financial problems. They think they’re losers or rejects or people that go bankrupt are careless or whatever.

Interviewee: Mm-hmm.

Interviewer: What do you have to say to people who are feeling like that? They’re suffering in silence. They feel alone. They’re having financial troubles and they feel like they’re the only one.
Interviewee: Well, I think there are a lot more people in financial trouble than everybody realizes. People live beyond their means no matter what their means are. People that make a million dollars live on a million and a half. People that make, you know, $100,000.00 live on $150,000.00. I think everybody is living beyond their means and you have to realize that no matter what you see on the outside, that isn’t what’s happening.

You are not in that family. You are not in that marriage. You’re not in that house to know exactly what’s happening with someone else and they could actually be in a lot more debt than you are. You just don’t see it and they keep spending it. Yours is more apparent and that’s –

Interviewer: There was a period where you lived through cancer.

Interviewee: Mm-hmm.

Interviewer: When you’re faced with something like that, do your financial worries go out the window? Are you just focused on cancer? That –

Interviewee: No, no. You know, for me thinking about the cancer when I first got it, it – that consumed me for the first month that I had it and all I could think was, “I have cancer. I have cancer. I have cancer.” But then after that it just became part of everyday life and that was something that was going on in addition to the rest of our life. We had children that needed us, that needed to do things, and the work didn’t stop because I had cancer. It still goes on.

You still have to pay your bills. No one comes in and gives you $50,000.00 to take care of everything. You still have to figure out how to do it. We were lucky. Our insurance was really good and we didn’t end up paying very much out of pocket for my care and my treatment. I know that it can be devastating to other people and so their financial worries become even worse than they were before.

Interviewer: What about people who – like you said sometimes you don’t sleep.

Interviewee: Mm-hmm.

Interviewer: People are really stressed. They lose weight. They can’t sleep. It affects all parts of their life. Any suggestions about how to better deal with that or you just accept it or what?
Interviewee: Well, I think if you’re married you definitely have to be open with your spouse about it because that’s helpful. You feel like – I know with my husband when we talk about money or something happens, I don’t like the way he reacts because he just becomes completely fatalistic and we’re gonna be living in a box. And so I’ve tended to not tell him and that’s been the wrong decision.

When I have told him, it makes me feel better and he’s really stepped up and made me feel better. He’s figured out, “Okay, what do we need to do and how are we gonna fix this?” ’Cause he doesn’t want to see me unhappy, so if he figures it out himself, it’s not so good, but if I tell him, it’s usually better. So you have to be open with your spouse.

If you aren’t married or you don’t have a significant other, I think you need to find someone to talk to about it, just even to say – if they can’t do anything, that’s fine, but even to say, “Oh, my God. This is horrible. Why am I doing this? And this is how I feel.” And someone else that can just kinda check in with you and see how you are and say, you know, “I’m thinking about you and I know this is hard.” And someone else might have other options and suggestions for you, too.

Interviewer: Lately for some reason I’ve been getting questions from women who – primarily women who say, “If I tell my spouse what my – what our situation really is, he’ll leave me or he’ll divorce me, so I can’t tell him.”

Interviewee: Well, if he’ll leave you or divorce you over that, then I don’t think your marriage was very good in the first place, but that – unless you have done something just heinous, that’s not a very good spouse. That’s not what they’re supposed to be there for and even if you have done something horrible, they’re supposed to help you through it, help you figure out how to do it. You made a commitment to each other. You should have enough trust in your spouse to be able to honor that.

Interviewer: All right. Well, thank you very much.

Interviewee: You’re welcome very much.

@GetOutOfDebtGuy

An Interview With Dan Stermer, the Court Appointed Receiver for the Hess Kennedy Debt Settlement Law Firm in Florida – Get Out of Debt Podcast

Steve Rhode — Wed, 19 Aug 2009 20:45:10 +0000

From How to Get Out of Debt

Here is the latest Get Out of Debt show podcast.

Do You Have a Question You Want to Ask?

If you have a credit or debt question you’d like to ask call 919-321-2378. Leave your first name and question and I’m happy to help you totally for free.

@GetOutOfDebtGuy

My Interview

I had an opportunity to speak with Daniel Stermer, Esq., the court appointed receiver for the Hess Kennedy law firm in Florida that was shut down. I thought it would be important for Hess Kennedy clients and people involved in the Allegro Law debt settlement firm that was shut down in Alabama to hear what it is like from the court appointed receiver seat.

Listen to the Answer

Listen to Daniel Stermer Interview

You can subscribe to my series of debt interviews through iTunes by clicking here.

Transcript

Interviewer: Today I had an opportunity to call and speak with Daniel Stermer. He is the court-appointed receiver for the Hess Kennedy law firm in Florida that was closed down. I thought it was important to talk to him to find out what he learned from that experience.

Daniel Stermer: Steve, I appreciate the opportunity and welcome it. And yeah, there have been a lot of lessons learned, and be more than happy to share them with you and your listeners. You know having been appointed by the court here in Florida last July, so in our year’s experience we’ve had many experiences, and have come to know an awful lot about the industry.

Interviewer: Mr. Stermer, when people first find themselves in this situation, generally it’s a surprise. The court has stepped in; all of a sudden things are frozen. From a receiver’s point of view, a court-appointed receiver’s point of view, how important do you think that it is for the receiver to maintain open communication and try to disseminate as much information as possible to keep people in the loop?

Daniel Stermer: We believe it’s very important, which was why we have initially and continued to send out written correspondence to claimants, whether they’re consumers involved or trade creditors or other interested parties, as well as we created a website which is updated almost in real-time with not only court pleadings, so everyone can see what’s happening in the court, but also with narratives which explain what is happening. In our case, in the Hess Kennedy matter we walked into a situation where there were over 90,000 consumers involved across the country.
And while we’ve answered every phone call and every email, and responded to every letter we’ve received, that’s only from a small segment of the potential consumers involved. So we believe it’s very important to disseminate information, and one of the ways to do that is not only by regular mail – and depending on the size of the case, that can be very expensive – or via the internet. And we’ve been using our web page that we created as one of our methods of communication.

Interviewer: Can you help educate us about how a court-appointed receiver is compensated in a situation like this? Is it from the funds that have been seized, or exactly how does a court-appointed receiver get paid?

Daniel Stermer: Yeah, I understood, and I welcome that question because people do have that question. I am a neutral third party that is appointed by the court. We make application to the court with regard to my fees and those of my professionals. The initial order that appointed me contained in it provisions with regard to the payment for the professionals I engage, but my fees and costs need to be applied for and approved by the court separately.

And every time – which we only do periodically – where we seek payment of my fees, we do it with a filing with the court wherein we attach all of my invoices as backup and get a court order authorizing it. We get paid – and I apologize. In response to the rest of your question, yes, we get paid of the funds available in the estate.

Interviewer: So in the Hess Kennedy situation people actually had funds in escrow to settle their accounts.

Daniel Stermer: Well, let me parse apart your question before you get to the rest of it. In theory that was correct, and potentially in what was discussed with consumers that would be their impression. But there was never an attorney’s escrow account. And Hess Kennedy presented itself as a law firm, which then would mean pursuant to the Florida Bar Regulations they would need to create an iota account, which is an escrow account, which was never set up.

So all of the funds here at Hess Kennedy, whether consumer funds, business-generated revenue – all funds here were actually comingled in one or a couple accounts, but there were no consumer escrow accounts.

Interviewer: In the Hess Kennedy situation – and probably with Allegro Law – there were a number of affiliates who were getting paid for referring business to both of these companies. In the Hess Kennedy situation, when the court seized the company and you took over, were affiliates immediately stopped from being paid?

Daniel Stermer: We got a court order directing us to stop making those payments, and we in turn by mid-September – having been appointed on July 18th of last year, a year and a month ago – within 90 days we sued and started recovery actions against 13 of those advertiser/marketing firms for the illegal payment to them of attorney’s fees, which is illegal pursuant to Florida law.

Interviewer: What have you learned about the debt settlement industry after having immersed yourself so quickly in it?

Daniel Stermer: It is a industry that when done properly can be beneficial to consumers. Consumers need to understand that they can on their own negotiate their current credit card debt with their credit card holder. It is not an easy process, but it takes some patience and tenacity. But consumers can do this on their own. We’ve learned there are entities in the industry that may not be doing some things right, many things right, or everything right. So it’s a heavily – at the moment – regulated industry that is under many regulators’ microscopes.

Some companies don’t pay attention for one reason or another to the various state regulations as it relates to fee caps or up-front fees, and a company needs to be careful where it’s doing business and how it’s doing business, or they very well may come under the ire of one or more regulators.
Interviewer: What happened with the funds that were on deposit with Hess Kennedy and people who later went on to file bankruptcy before settlements had actually occurred?

Daniel Stermer: We are working with those bankruptcy trustees, who many of the consumers filed claims in our claims process and then alerted us to their pending bankruptcies. So we’ve been coordinating where necessary and as necessary with their bankruptcy trustees as it relates to either amounts that they paid to Hess Kennedy or as part of the global resolution that we were lucky enough to negotiate with three of the major credit card companies as it related to tens of thousands of consumers. Wherein we got resolved and forgiven over $150 million in consumer debt, as well as getting those consumer trade line deletions. I say that now only because in some of the instances some of the folks in bankruptcy had some of these credit card issues there, so we’ve been coordinating with bankruptcy trustees across the nation related to those specific consumers.

Interviewer: I was really impressed that you were able to get some very major settlement offers from a few of the major creditors. What was the secret to that success?

Daniel Stermer: We believe it was our tenacity in trying to get it done. Capital One was the first major creditor to enter into an agreement with us, and then HSBC fell in suit, and more recently, Chase, we resolved the litigation that was out there, as well as with the Capital One case there was pending litigation. So we basically for pennies on the dollar resolved like I said over $150 million, and more importantly those trade line deletions are important to consumers because what would’ve been negative trade line because of the late payments or no payments is now removed from their credit report.

So for them that’s a positive that in any resolution credit card companies don’t normally agree to trade line deletions. Every regulator we’ve spoken to has said, “How did you do that?” And we said, “That was one of our conditions of settlement.”

Interviewer: It’s so unusual that a trade line would actually be completed eliminated from a credit report so any negative history is gone.

Daniel Stermer: Correct. We took the position – and I believe rightly so – that a consumer who was in trouble reached out to a company – Hess Kennedy – to assist them with their problem. The consumer made a bad choice in coming to Hess Kennedy, but don’t fault the consumer for things that the company did on the consumer’s behalf. The consumer, in our view, tried to reach out to a company to assist it with its debt situation, and we held fast to that statement with the credit card companies. And I think they were understanding of it, and they understood our desire to have it happen and agreed to it.

Interviewer: Were there any other major creditors that you approached that just didn’t want any part of the settlement deals?

Daniel Stermer: We approached the largest – at least the ten largest creditors involved in the Hess Kennedy matter. And part of the issue – and it became difficult with some – was just the time constraint we were under, because we had to get things done for all intents and purposes by the third or fourth week in October. And with some creditors it was just difficult to get all of our arms around the information that they had and we had and get it tied up.

Interviewer: Is there anything that you can say about Americorp after you took over Hess Kennedy? Are they still servicing accounts for you?

Daniel Stermer: They continue to process our debt management accounts, as well as there’s another provider out there that’s doing it for us as well, and they’re continuing through today to process our debt management accounts.

Interviewer: Mr. Stermer, thank you so much for taking the time to answer these questions and to help people better understand what it’s like from your side, the court-appointed receiver point of view, when you take over a firm like this. If there are any more questions, do you mind if I contact you further?

Daniel Stermer: Steve, you’re more than welcome to. And let me also suggest for you and your listeners, if they go to www.LBFMiami.com, click on the button that says “Active Cases,” click on the button that then says “Receiverships”, and click on the link to “Laura Hess and Associates” they can find all the information we have posted with regard to this matter. Which includes not only the documents I told you about earlier – the narratives and the court filings – but consumers can actually look up the status of their claim online.

Learn What Encephalitis and Bankruptcy Have in Common, Christie – Get Out of Debt Podcast

Steve Rhode — Wed, 19 Aug 2009 14:06:08 +0000

From How to Get Out of Debt

Here is the latest Get Out of Debt show podcast.

Do You Have a Question You Want to Ask?

If you have a credit or debt question you’d like to ask call 919-321-2378. Leave your first name and question and I’m happy to help you totally for free.

@GetOutOfDebtGuy

The Situation

Actually this is an unusual interview. Let me tell you the background. I happen to be sitting in the food court at the local mall waiting for my wife to finish with her appointment at the Apple store. A few minutes ago I walked up to McDonald’s and ordered a breakfast sandwich and the lady behind the counter told me it was buy one get one free.

I knew I could not eat two but I took her up on the offer anyway. I thought maybe Pam might want one.

Hoping to record a telephone interview this morning with a court appointed receiver in the Hess Kennedy case I just happened to have my recorder out and making sure all was well with it.

Up walks Christie and she asked me for a dollar so she could buy some food. Instead I asked her if she wanted my second breakfast sandwich. Let’s just say, she graciously accepted. We chatted as she ate and she told me that she had filed for bankruptcy because of medical problems and she agreed to share her bankruptcy story with us.

Listen to Christie’s Advice

Listen to Christie

You can subscribe to my series of debt interviews through iTunes by clicking here.

Transcript

Interviewer: All right, so I’m sitting here at the mall with Christie and she just walked up. I happen to have the recorder with me, and what did you ask me, Christie?

Christie: Well, if you had a dollar you could spare because I don’t have any money, and I’d certainly like some food.

Interviewer: But we managed to find a resolution to that.

Christie: Yes. He’s a good man.

Interviewer: So you said that you’ve been struggling because you’ve actually been having some financial problems. Do you mind sharing what’s been going on?

Christie: Yeah, actually I had a brain injury encephalitis, swelling of the brain, but I had some friends that messed me up financially and I had to declare bankruptcy. I used to have a lot of money, but just because you had it one time doesn’t mean that you’ll have it forever.

Interviewer: What was it like to go through bankruptcy?

Christie: Well, I had the help of my parents. Thank you, God. I have – excuse me. I’ve learned to appreciate the little things in life a lot more. Money can’t buy you happiness, but let me tell you; do onto others as you would have done onto you. Me helping others in every way I can, they end up helping me, like this stranger here, Steve, has helped me. I’ve learned to appreciate little things, like I said. Any time you can get some free food, I’d take advantage of it.

Interviewer: No problem, Christie. I’m happy to help. For those people out there right now who are struggling and feel like they’re alone and they’re afraid with their financial problems. They feel like losers and rejects, they just feel really depressed, what advice do you have for those people?

Christie: Take life with a grain of salt. It could be worse. You have both arms and both legs is how I look at it. Thank you, God. God’s got a plan for us.

Just keep your head high. Do what you can, and just have God help you and lead you. Just do what you can. I can’t get in any more detail. I just appreciate the things that have happened and grow from them. I don’t know how to say you can’t guarantee – you could be a millionaire one day or anything, but just take each day.

Interviewer: So what’s your plan moving forward?

Christie: Well, I’m gonna be getting some help with a job. I’m gonna have someone work with me, and that made me very happy. Of course, be careful when you go into a job too. I actually got fired from a job for being too nice, actually, for volunteering, being too nice, so be careful how you are, being too nice or too mean, but don’t hesitate to go out and look because there are places that can help you.

Interviewer: Did you have to pay to file bankruptcy or did somebody help you?

Christie: I had my parents help me. Like I say, they’ve done a lot for me.

Interviewer: What kind of debt did you have, if you don’t mind sharing?

Christie: Well, before my encephalitis, I had a lot of money. I calculated out, I was making over $100,000.00. This is pretty much just after getting my master’s. I heard my law firm had to hire three and a half people to replace me, but I had bought a lot of things that I couldn’t afford, like $13,000.00 for four pieces of furniture. I think it’s a little outrageous. I needed reality to hit. Be careful where you spend your money because you can lose it in a split second.

Interviewer: All right, Christie, any parting words before we say goodbye?

Christie: Don’t be afraid of the little things and just thank God you’re alive. Money can’t buy you happiness.

Interviewer: Thank you very much.

Christie: You’re welcome.

The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey.

Steve Rhode — Mon, 10 Aug 2009 11:14:44 +0000

From How to Get Out of Debt

I’m finally sitting back at my desk, at home, after my week long tour of the Northeast U.S., talking to people about the economy, money, credit, and debt. My travels took me from NC through VA, WV, PA, NY, VT, NH, MA, CT, MD.

I traveled through some of the hardest hit counties in the Mid-Atlantic from these difficult economic times and one message rung true in each corner of this part of the country.

If you go back and listen to my interviews I recorded during the trip you will hear one overwhelming message thread through the advice given by people from all different walks and stations of life.

The advice is so simple and if I had followed it when I lived through my money problems and bankruptcy it would have greatly helped me to recover from those difficult days. The secret, and the message is hope. Hope of brighter days and hope that things will improve is the secret that helped many to find the strength to make across the dark and desperate times.

Almost as if a sign from a higher power, as I was sitting in the passenger seat, headed down the highway on the final legs and contemplating what I had learned from this trip, the truck above passed me by with the message you see on it’s back window. The exact message of hope that many had shared with me, “Things are getting better…just hang in there.”

Now this magic and free hope is not a wish that your life as you know it will be unaffected by your money troubles. It is instead an acceptance of your current reality and then an enthusiastic embrace that while tomorrow may be difficult, the days that follow will be better and take you one step closer to a better life.

Everyone I talked to has lived through painful times in their life and yet their advice for you was that hope carried them through. Hope provides energy to make it through today and tomorrow and it positively encourages you to power yourself forward to the better times that will come.

The loudest second bit of advice to share was not to suffer in silence. That it is important to reach out to friends and family and to lean on them for emotional support. The time honored tradition of community provides a scaffolding to prop you up when you are struggling. This community isn’t going to bail you out or make the problems disappear. But a community can help you buoy hope and carry you over the tough times and to shore where you can gain your footing.

What was also encouraging was that the two most powerful emotional and supporting messages of hope and community and both tools that are totally free and available to you this very instant. You don’t need to buy anything to start applying hope to your situation right now.

But I will admit, it is enormously difficult to flip a switch from feeling hopeless to hopeful. Not everyone can do that in an instant. But if you can remember to hope it can become second nature.

Hope is the knowledge that while today might really suck, better days are ahead. With hope you can live through your darkest days with some excitement because you will know that as bad as today is, a day is coming for you when life will be the exact opposite.

Evoking hope does not have to be a complicated process. It is activated when you can look at your current situation and know that things will get better, you just need to hang in there.

So the message of hope is one that I will try to weave into my help and support that I give to people. And it is a message that I will try to fiercely hang on to the next time I face a hurdle in my life.

@GetOutOfDebtGuy

I Interview Allie, the Navy Wife in Charlottesville, VA

Steve Rhode — Sun, 09 Aug 2009 12:31:06 +0000

From How to Get Out of Debt

Allie and I sat down in Charlottesville, Virginia and since she had been unemployed we talked about looking for a job, how to find a job, the economic opportunities in her area and her opinion about people that have faced or may be facing money troubles and tough times.

I was really surprised when she talked about landing jobs and feeling that she had been passed over because she was the wife of a military service member.

Click here to listen to my interview with Allie.

You can subscribe to my series of debt interviews through iTunes by clicking here.

Transcript

Steve: So I’m here with Allie in Charlottesville, Virginia. Hello, Allie.

Allie: Hi, Steve.

Steve: And I’m traveling around the country and I’m talking to people about the economy, how things are in their area, some questions about credit and debt and, you know, how people look at others that have been through tough times. So let’s start first with you live kind of near Charlottesville, Virginia and how are things in this area?

Allie: Things are improving. They’ve really been rough around the first of the year. We had a lot of companies with layoffs and a lotta people were looking for jobs at the same time which was not a good thing.

Steve: Now did you know lots of people who – did you know people who fell into trouble and were having a difficult time making ends meet?

Allie: Yes, quite a few.

Steve: And, you know, when people live through times like that they often feel like they suffer in silence, you know. They’re – they sometimes feel like they’re losers or rejects or being punished in some way. What advice do you have for people that are living through those troubles?

Allie: Just to keep a positive outlook. Amongst my friends, the people that had gotten laid off that got jobs fairly quickly were people who didn’t let it bring them down. The people who approached it with that they were too good to work a menial job in the meantime to pay the bills are the ones that are still looking for jobs out here.

Steve: So the people that contact me most often are feeling very desperate, sometimes even suicidal, and they don’t know what to do at all. I know that keeping a positive outlook is a good thing to do, but when you’re feeling so – I don’t know. When you’re feeling like you have personally failed, I know – what advice do you have for somebody to get to the point of being able to have a positive outlook? How do you put those feelings aside?

Allie: I think you have to rely on your friends and family. You have to have a good support system. I think you have to approach it as looking for a job is your job. It’s not just something you have to do. It’s – you know, you make a fulltime job out of searching for employment, and I know there are some people that get very down in the dumps there. I think you just have to have a support system to do that or rely on your support system or reach out to your friends and your contacts and, you know, don’t be ashamed of where you’re at. Just, you know, tell everybody that you know what you’re doing and what you’re going through so that they can help you out.

Steve: So you’re feeling more positive about the future.

Allie: Yes.

Steve: And do you see that there’ll be a time when you might make a big purchase? You might feel confident enough to go back to using credit again?

Allie: I’m getting there. We are carrying a lotta debt from the last year and a half, two years, so I’d like to get that paid off before, you know, we start doing that again, but it’s feeling more comfortable than it was.

Steve: Now your husband’s in the Navy and has been for two years?

Allie: Two years.

Steve: Two years now. Is being a military wife – is that a difficult financial path?

Allie: The thing I ran into – I had it happen on two separate occasions – as a military spouse going in it’s pretty common knowledge that we have very good benefits and, you know, his job is steady. He’s not gonna get laid off. So I found jobs where I was one of many possible candidates. A lot of the time the feeling that I got was because I wasn’t the most desperate of those seeking jobs that I probably got passed over because – for somebody else who did need a job because they knew that I wasn’t – you know, yes, we need that extra income, but in terms of jobs with benefits and things like that, I wasn’t top of the list as far as that goes and I think a lot – especially in a small town, a lot of employers were looking at that as well as qualifications.

Steve: You live in an area that’s probably 30 or 40 minutes from a mid-sized city, Charlottesville. Would you consider relocating to a different area to find employment or is living in your small town that you’re very comfortable with your top priority? You know, what I’m trying to get at is that there are jobs that are available out there for people and I hear people telling me that they’re not willing to relocate. What’s your opinion about that?

Allie: I would be willing to relocate. The military makes that kinda difficult. Granted, my husband’s stationed somewhere and he’s committed to being there for the time being. Within a local area, that is certainly a possibility and there’s a lot of things, you know, people have to do. We’re at a disadvantage because we own a home, so the housing market also impacted us and, you know, kind of limiting us where we could – where I personally could look for someplace else to be while he was gone because, you know, of the housing situation. So having a mortgage and also having to rent somewhere else was not a feasible thing.

Steve: I was just thinking today on the long drive down here about, you know, living through financial troubles, being nervous and scared and concerned about that, looking at moving to a new area where you don’t potentially know anybody and looking for a job at the same time all seems like it creates so much fear that you’d almost get paralyzed into not doing anything.

Allie: Well, I think us being a military family it’s – you have to be open to moving anyway because it eventually happens and that’s the lifestyle, so having to look outside for a job, I think we’re in an advantage of that because we’re used to being able to be prepared to go if you need to go. So it’s not as scary for us as it is for, you know, most people, who especially have lived in a place for a long time and have established, you know, family or friends or, you know, spent their professional career in one place. You know, it’s a little bit different. We’re always on the ready to go, so.

Steve: All right. Well, thank you very much, Allie.

Allie: Thank you.

@GetOutOfDebtGuy

An Interview With Two Guys Standing Atop a Burning Coal Mine

Steve Rhode — Sat, 08 Aug 2009 17:53:51 +0000

From How to Get Out of Debt

Centralia, PA is an interesting place. It is said that map makers and GPS providers want to take it off the maps. Ever since a seam of coal caught fire below ground decades ago, a smoldering coal fire has burned below this town.

From a town of 2,000 residents, it is down to about 10, but some houses still remain. Main Street is still paved but without a single building on it. Railroad Avenue pushes out steps that once belonged to what look like thriving businesses. All gone now.

Evidence of the mine fire is hard to spot. You need to look near the old cemetery to see smoke and heat that emerge out from cracks in the ground to support the continued claims of the fire that continues to rage below my feet as I stand here.

Walking down a back road and searching for more smoking holes in Centralia I ran into Al and Rob and got a chance to talk to them about the economy, credit and debt.

Al & Rob

These guys are the only two that specifically said they make it a point to pay their credit cards in full each month to avoid paying interest charges.

While they have some distinct opinions about those that have fallen to the doorstep of bankruptcy, they are also forgiving when options are limited. Their comments about the need for savings are important. Rob was rescued by his emergency fund when he was laid off.

Al recommends that people using credit cards need to be responsible for reading the fine print of contracts but he observes that his pest control customers don’t read the contract for his services.

Click here to listen to Al and Rob.

You can subscribe to my series of debt interviews through iTunes by clicking here.

Transcript

Interviewer: I’m standing here in Centralia Pennsylvania with two very fine gentlemen and you are?

Rob Rossie: My name’s Rob Rossie, Rob.

Allen Haber: Allen Haber.

Interviewer: Come here a little closer. All right, now I know why I’m in Centralia Pennsylvania, why are you here?

Allen Haber: Probably the same reason, curiosity.

Interviewer: See the mine fire, yeah.

Allen Haber: Curiosity basically.

Interviewer: Yeah, where you guys from?

Allen Haber: I’m Philadelphia.

Rob Rossie: I live in Hatfield.

Interviewer: Okay, that must be somewhere not too far away?

Rob Rossie: Right outside Philly.

Allen Haber: Yeah.

Interviewer: I been traveling all around the country asking people about the economy, how things are going. What’s your impression? Do you think that things are dire and desperate as we hear on the news all the time?

Allen Haber: In my opinion things are definitely getting better. It was much worse last summer as far as I see things. I own a business and I do see a difference. Things are definitely picking up. It’s not where I want it to be yet, but it’s definitely getting better. To me, over the past couple months it’s been definitely getting better.

Interviewer: Do you think that –

Allen Haber: I’m busy.

Interviewer: Well that’s – what kinda business do you have?

Allen Haber: Pest control.

Interviewer: Okay well there’s –

Allen Haber: I won’t plug it.

Interviewer: Oh that’s okay. Pests never go away do they? It’s –

Allen Haber: They pretty much are here to stay.

Interviewer: Yeah.

Allen Haber: They’ll be here after us.

Interviewer: Now that’s interesting, in the pest control business, people have pest issues all the time but do they make conscious decisions in down times that well, we can’t afford to take care of em?

Allen Haber: Well, that is the problem. People will go out and get the can of Raid. They’ll try anything on their own and then they’ll call me afterward.

Interviewer: Yeah, it’s just more expensive that way isn’t it?

Allen Haber: Pretty much, I mean sometimes you could do things on your own but I wouldn’t know cause those people I guess don’t call me because they’re doing their own thing but what could I say?

Interviewer: How about you in your world? What’s the economy like in Hatfield?

Rob Rossie: Well, I work for a big company. I work for Johnson and Johnson and I haven’t really seen, I mean at work it’s been pretty steady for the past couple years cause we haven’t been affected too much. But outside of work I think it is getting better like Al said, over the last year or two with gas prices coming down and people are spending a little more money now I think than they were. People are taking vacations. We’re out all the time on motorcycles. We see people out.

Interviewer: What do you ride?

Rob Rossie: We have a – we both have Kawasaki’s.

Interviewer: Okay.

Rob Rossie: And we’re all over the place.

Interviewer: I ride too.

Rob Rossie: Oh you do?

Interviewer: Yeah.

Rob Rossie: Yeah, we have the Kawasaki Tours and we go out for a given day, we left this morning at like nine, we’ll go out all day and ride and we don’t even – it doesn’t affect nowadays even with gas prices. We’ll go out. It doesn’t, you know stuff like leisure time like today.

Allen Haber: Cheap day riding.

Rob Rossie: Yeah.

Interviewer: That’s true, it is cheap day. What about people who, you know all over the country there are people that are struggling with credit and debt issues. They got money troubles, they might be worried about their houses, they might file bankruptcy, they feel like losers and rejects. What advice do you have for people who are in that situation?

Rob Rossie: Just ride it out. I was unemployed for 4 or 5 months a couple years ago and it takes a while to recover, even from just a 3 or 4 month layoff. So I can’t even imagine – my heart goes out to people who are still you know for a year or two you get to the point where you just don’t know what to do with yourself.

Interviewer: So now they’re looking down on themselves that somehow they had failed.

Rob Rossie: Same thing happened to me when I was unemployed and you just have to keep going, you have to keep looking and eventually you will find a job and feel better and recover. But yeah, it’s a tough time for a lot of people right now and I’m just lucky right now that it hasn’t really affected me too bad.

Interviewer: All right and how about you? What do you have to say to people who are struggling?

Allen Haber: Save your money, don’t spend it and things will get better. There’s not much more to say. Once you spend the money and make the mistake, there’s no real turning back. Just gotta, like Rob says, stick it out, hang on, things are getting better.

Interviewer: Well you know one of the things I run into are people that are faced with maybe only bankruptcy as a real option but feel that there’s a big stigma or a moral shame about going bankrupt. Do you have any problem if somebody goes bankrupt if they don’t have any other choice?

Allen Haber: Really I don’t have a problem with it. Credit card debt to me though is not a reason. It’s irresponsibility for the most part. Not with everybody, some people are in a jam, they need to charge things but when you owe 10,000 or 20,000 or more on a credit card, then you wanna blame somebody else for it, doesn’t cut it.

Interviewer: How about with you? What do you say?

Rob Rossie: Yeah, like Al said, I think it’s the same kinda thing where – I don’t look down on people that file bankruptcy. But if it’s their own fault and they’re going out and they’re buying stupid stuff and living way out of their means, then I hate to say they deserve it but you have to be a little more careful. And I’m sure people learned. You know that’s probably the only good thing about it is the economy kinda, when it’s this bad I think people kinda learn, well, in the future I’m gonna really make sure I have a couple months saved up.

Interviewer: Yeah, well some people have described it as the teachable moment. It kinda woke a lot of people up that –

Rob Rossie: Oh yeah, yeah I believe that cause we was – I mean it was too good for a long time.

Interviewer: A long time, yeah.

Rob Rossie: People got this false sense of security, they started spending too much money and –

Interviewer: What about credit cards? Have either of you noticed that credit card companies have started reducing limits and raising interest rates?

Allen Haber: I didn’t see that as much. I’m hearing of it. My rate is still the same fixed for I don’t know how many years, probably about eight years now and I never let anything go beyond 30 days so the credit card companies don’t like me. I pay everything off as soon as I get the bill.

Interviewer: Yeah, so you never pay any interest.

Allen Haber: And when it is the rate is like 7.9 I’m paying if I were to pay it and that’s still not – it’s the same as it was for like years. So yeah, some people are paying more but you gotta read the fine print. Don’t sign on something you’re not sure of, especially now.

Interviewer: You know a lot of people don’t read the fine print at all.

Allen Haber: I know, I know.

Interviewer: Now when you sign a – you go to a customer’s house, you have a contract right for pest services?

Allen Haber: Sure.

Interviewer: How many people read that?

Allen Haber: My contract is not even a contract cause we don’t really do contracts. And what is to read there is like three paragraphs, which could be read in like less than a minute. There’s no fine print and like I said, there’s no contract, it’s strictly a 30-day thing. They could add on if they want to. It’s their option, so there’s really no contract with us.

Interviewer: Do you notice people read all three paragraphs or they just sign and forget it?

Allen Haber: Most people don’t even read it; they just sign it, exactly. And I’ll usually read it to them. I’ll let them know what it says at last, just you know, common courtesy.

Interviewer: All right and how about you? Last question, have you noticed any change in credit cards, limits, interest rates, access to credit?

Rob Rossie: No, I’m actually in the same boat as Al cause I have the same cards for years and I don’t carry a balance. So I haven’t really tried to get a new card in so many years. It didn’t really impact me at all so I really don’t know.

Interviewer: All right, well thank you very much gentlemen.

Allen Haber: You are welcome.

Rob Rossie: Yeah, you’re welcome.

Interviewer: All right thanks Rob, thanks guys. Have a safe ride.

Allen Haber: All right, thank you.

Rob Rossie: Hey, thanks a lot man.

Allen Haber: Enjoy.

Interviewer: Bye.

@GetOutOfDebtGuy

Elizabeth in Wilkes-Barre is Hopeful, Happy and Headed to Law School.

Steve Rhode — Fri, 07 Aug 2009 23:56:51 +0000

From How to Get Out of Debt

I’m tired. It’s been a long journey on this tour of talking to people about the economy and how to deal with financial adversity. I tell you this not as an explanation, but as an excuse. You see, I managed to tape this great interview with a very nice girl from Wilkes-Barre, Pennsylvania tonight, but in my tiredness I forgot to push record. Doh!

But the reason I’m sharing this colossal screw-up is because Elizabeth had to some important observations to share.

She’s Wilkes-Barre born and raised and currently a college student at Kings College. She is heading for law school after graduation and is currently working as an administrator in a local law office.

Elizabeth sees tremendous hope, growth and opportunity in this part of Pennsylvania. She points to new businesses moving in, a revitalized downtown area, and the opportunity to find work and to work hard. She pointed to a growing confidence in the local economy by saying that her boyfriend just bought a brand new car.

When I asked Elizabeth if she had known people that had struggled financial she said that she had and her advice to anyone suffering with money trouble or who has gone bankrupt was that it shouldn’t matter. Wise beyond her years she observed that strife hits everyone at some point. Her opinion of people that have gone bankrupt was one of caring and wishing that they could move ahead with their lives and not get bogged down with past worries. But then again, she is a philosophy undergrad.

@GetOutOfDebtGuy

Thomas Fox Chats With Me About You. Listen.

Steve Rhode — Fri, 07 Aug 2009 23:36:58 +0000

From How to Get Out of Debt

Thomas Fox, whom you will find on Twitter at @ThomasJFox, is a personal finance expert, counselor, teacher and a fellow person who is passionate about helping people with money troubles.

Thom and I met in Springfield, Massachusetts as I was passing through the area on the downhill loop of my tour talking to people about money, the economy, credit and debt.

Sitting in my van outside of a Starbucks we chatted about access to credit, treating yourself to pleasure in downtimes, financial education, student loans, and how to build a good budget.

I invite you to listen to Thom, below.

Listen to My Interview With Thom

You can subscribe to my series of debt interviews through iTunes by clicking here.

Transcript

Interviewer: All right. Well, I’m here with Thom Fox. I guess we could almost say, “The renowned personal finance expert,” but Thom is certainly a personal finance expert. He’s on Twitter, and he’s been working in this field for a while. He’s a spokesman for a company and if anybody has an outlook on what consumer life is like, credit and debt, in the economy, you’re one of those people who has your finger on the pulse, so how do you think things are going just generally for people right now?

Thom Fox: From what I’ve seen so far, people are just really – they’re overwhelmingly concerned about the American economy, about their own stability, and I think their future’s in question to the point where they’re uncomfortable with many of the purchases that in the past would seem very much routine. They’re really doing the mental gymnastics about where do I wanna go? We’re coming from a savings rate that was in 2007, if I’m not mistaken, -2.7 percent and now we’re climbing up towards 7, but we’re still behind where other countries are, so we can see that shift where people are saying, “I’ve gotta hold onto my money a little bit better,” but there’s also that talk that I hear with the people I educate is, “When are things gonna get better?” They’re looking for that hope, and they’re concerned about the light at the end of the tunnel, and many of them just don’t see it.

Interviewer: Do you think that people miss those days of being able to go out and purchase things that they like to provide themselves with entertainment?

Thom Fox: They do. They miss it. We’re an instant gratification kind of society with the expansion of the malls in the 1970’s. That just helped us out all that much more. We had the ability to go out and do what we wanted to do, but people looked at different things, more so in a very generic sense.

For instance, their 401k’s and even Social Security, they’re saying, “Well, that’s my retirement fund,” and to step them away from that and say, “No, really, this is only part of the puzzle. What are you doing with the rest of your financial life?” They’re starting to take that to heart now.

They’re starting to realize. We have, since the beginning 2008, 6.7 billion jobs that have been lost, and those jobs aren’t readily being put back into the economy. Someone doesn’t know what’s gonna happen to them and how long it’s gonna be. I think the average time being unemployed is over six months, well over six months, so if someone’s worried about if I’m unemployed Thomorrow, I don’t think I have the money to really keep myself going.

Interviewer: Well, I was surprised in my travels. I spoke to one marketing manager at a resort who said this has been the slowest year for them with reservations, which I understand, but he said, “Things are really picking up. It’s like people are reaching the end of summer and realizing, ‘I haven’t had a vacation yet. I’d better do something,’” so they’re now starting to part with some money.

Thom Fox: They are, but now we have to look at where the money’s been going. A lot of people have used their credit cards to fuel a lot of things. I think people – where credit card debt has been down in the country is $928 billion dollars down from $977 billion, but it could be that we’re talking about a lot. The economists were like, “We have this pent up wanna go out and buy.”
We could be getting to that cap because a lot of people could be getting stressed, and let’s be honest, a vacation is not just about the financial part. It’s about the psychological part. “I need a break. I need to do something. I’ve gotta get out of here,” and really, you really can’t put any price on that, so yeah, we could see some people coming around and saying, “I’ve gotta do a little bit more for myself.”

Interviewer: Is it wrong for people to want to treat themselves to a weekend getaway or some small vacation even in desperate times?

Thom Fox: Absolutely not. As far as we know, we go around this place once, might as well enjoy it while we’re here. Obviously we wanna have money saved for certain emergencies and that’s – more so where what I try and do with people is a lot of people say, “Oh, I wanna invest. I wanna do all these things.” Well, you’ve gotta learn how to walk before you can run, and I work on very – just giving people the basics.

I would say 80 percent of the people I talk to don’t understand credit scores. They don’t understand. Even 90 percent of the people don’t have budgets, so when you try to get them on that path and they start to realize, “I can save money doing this. I can save money doing that. I can do this and this,” and then when they start to see that I can build savings, I can do these things, there’s that confidence. I know I can prepare, but I also know that I can take care of myself in the process.

Interviewer: Budget in a little fun.

Thom Fox: You need a little fun, and I think that gets them over to the fun aspect when people start to become – I mean education is the largest tool that we have in this country. Understanding something completely gives you the confidence. I know I can build savings, so wow, I’m gonna do that, but now it’s time to take care of me a little bit.

Interviewer: What about credit cards? Have you had a period of time in your life where you might’ve experienced some stress, some financial stress, and lived through some issues yourself?

Thom Fox: When I was younger, I inherited a fair amount of money. I got married and divorced quickly thereafter, and lost all of the inheritance that I had, which is really what got me on the path of personal finance. I didn’t understand any of the mistakes I made. I didn’t understand why I should’ve been protected with my investments or anything, and then I looked into it, and as I started to look into it, I started to realize more and more just how many people did not know this. When I went to work for the organization I’m with right now, it was a small place. It’s a not-for-profit, and I had to move into different areas, and one of the areas they said is, “Based on what you know, why not work in the education area,” and it’s been 14 years now, and I’ve just been teaching personal finance and developing programs, and it’s been great, but it all started from a bad experience.

It’s only bad if you let it be bad. It’s a learning experience otherwise, and I just look at it as probably the most expensive learning experience I ever had, but a close second is my college education, but I’ve had some tough times with money, and I’ve had tough times with credit too. Because of all that, I fell into collections and had collections agents calling me and pulled in every different direction and it takes time. Just as it took time for me to get into trouble with my finances, it took me a long time to get out of trouble. Despite what anybody says, there’s no overnight magic bullet.

You can’t call a credit report company, and boom, you’re done. It takes time. You just have to – it’s patience. It took a lot of patience of mine, but it also helped me do different things in my life, like really understand what people need to know about finances and how it can help themselves.
Interviewer: Now you and I both know that when people are struggling through these difficulties that they feel like they’re the only ones that are going through this. They’re suffering in silence. They feel like losers and rejects and feel just very despondent about their situation. Somehow they failed. What do you have to say to people when they’re feeling like that?

Thom Fox: Well, there’s been circumstances in my own life where I felt that way, not because of finance but for other things, and one of the lessons I learned is that there’s billions of people on this planet. There’s been billions and billions of people before us and so on. Someone somewhere has gone through a similar situation that you have – talk about it. One of the largest obstacles I see for relationships is no one talks about money, especially if you have to go now do a budget for a family. No one really wants to talk about it, but you need to get people on board.

You need to have a conversation about it, and you’d be surprised. You don’t have to get intimate about it. You don’t have to say, “Well, I make $80,000.00 a year but I can’t afford this,” and there’s your cousin making $35,000.00, and he feels all intimidated. You don’t have to do all that but you can say, “Listen, I’m having some troubles.”

You’d be surprised at how many people are having trouble in one way or another. College students, for instance – everybody’s graduating this year. I’m mystified as to how they’re gonna take care of this situation. The job market’s just not there, and these student loans are gonna start coming due, and if their payments are gonna be – I graduate next year.

If their payments are gonna be anything like mine, I don’t know where they’re getting the $500.00 a month or whatever to pay it, unless obviously they’re gonna consolidate their loans and so forth, but they’re gonna be very stressed. They need to talk about it, and I think I see a lot of young kids talking about it and already preparing for it, which is encouraging on my end – they’re knowing. “Okay, this is coming down the road. I’ve gotta prepare for it,” so we’re making that shift I think a little bit in society to be a little bit more open about it, but we probably have a little bit more to go.
Interviewer: Now college loans are actually scary. Student loans are one of those things that everyone thinks is good debt, debt that we should take on, but student loans are very unforgiving if you run into financial problems. How do you – what do you say to people to prepare themselves for college and not just, “Oh, don’t worry. They’ll give you financing.” Should you plan in advance? Should you base your education on what you can afford?

Thom Fox: Well, I took a breath there because it’s a dual kind of aspect. I’ll share a little bit. I dropped out of high school in ninth grade. I ran into a lot of problems. I actually started a couple of agencies that help kids who are considering dropping out of high school to keep them in high school and then get them onto college, and I’m working with a new program now as a mentor to do the same.

In my opinion, the best education that you can ever – the best investment you can ever make is in your education because even beyond the fact of what you can do for earnings for yourself, there’s still the ability of what you can understand in the world, and again, if you have the knowledge of something, you can better be prepared for it, plus there’s so many ways with the internet and everything else that you can create income, and it’s not just about making one stream of income. It could be multiple, but that comes from education, knowing the world and how it works. You should have a plan going into it. I don’t know if we should put a price tag per se on well, I know I can only afford $30,000.00, so I’m stopping when I get to $30,000.00. I think you should make the plan beyond.

This is what I wanna do with my college education after I graduate, and then work a plan from there to say, “I have to create the streams of income that will help me sustain my college loan which is gonna be X amount of dollars per month.” I’ve spoken to people that have done this. One of my friends actually, she graduated three years ago for nursing, and within the first two years of her employment, she’s paid off all of her student loans because she had a plan going into it. She didn’t say, “I can only afford this much,” but she said, “I know when I’m done this is gonna be waiting for me, so what do I have to do now to prepare for that?”

Interviewer: Have you had those clients come to you like I have that are in their third year of law school and they’re a couple hundred thousand dollars in debt and then they decide, “I don’t wanna be a doctor. I don’t wanna be a lawyer.”

Thom Fox: I haven’t had those and I think I may have read about one of those on your site. It’s a difficult choice, but there’s other things you can do with that education too. You don’t necessarily have to be a lawyer. You could go into consulting or something along those lines. There’s gotta be a way to parlay that, and off of the top of my head I don’t know what it is, but again, having the education is one thing and then applying it is another, so there’s multiple things you could probably do, but again, having a plan going into it, and it’s tough today.

If you’re a young kid and you’re going all the way through medical school, by the time you get to the end of it, you’re talking about a substantial amount of your life that things change. Especially being a younger person, that could be a quarter of their life or two-thirds, and next thing you know they’re like, “Well, wait a minute. I don’t know if I want to do this anymore.” It’s challenging, but again, you do have the education.

You can do something with it. You’ve just gotta have that spark inside of you to say, “Well, all right. I’ve got this. What do I do with it?”

Interviewer: Well, people are oftentimes very irritated at credit card companies and one of the things that they don’t seem to understand is that having a credit card is a privilege, not a right.

Thom Fox: True and I’ve seen a lot of it too, especially with the new Card Act that’s been passed. People are saying, “Well, it should’ve happened years ago,” and I think we’ve gotta get back to the mindset that a credit card organization is a business. The credit card companies, they’re in business to make money. They have to look at the situation. They have to protect their shareholders, and a lot of it now I see, that’s my view of it.

They’re cutting back on credit limits and realigning things because they wanna buffer their shareholders. It’s a privilege in a sense that you don’t have to fuel your lifestyle on credit cards but unfortunately because of the ease of access to credit – several years ago I had someone I was educating in a class and they pulled out 30 credit cards that they had from Sears and this one and that one and the other one and then the regular brands, and you’re going, “Why do you need all those?” “Well, if I wanna shop here, I use this.” We have this – the name escapes me, but we feel as though we have a right to this, and it’s not a right. It is a privilege, and people abuse privileges sometimes.

Sometimes it’s not even their fault because it just gets so easy. Everywhere you go now, you don’t even need to carry cash. We’re going to a cashless society, and the next thing you know, you turn around, you’re $40,000.00, $50,000.00 in credit card debt and you’re scratching your head how you got there because it can happen so quickly.

Interviewer: So let’s talk about savings now. Just recently people have started to save more, but they haven’t for a long time, and what do you tell people about the importance of an emergency fund or putting cash away? It’s almost like it needs to be spent, especially in times when income might not be as great as it once was. How do you promote that?

Thom Fox: You couldn’t even bring up the words, emergency fund, three years ago because no one wanted to hear it because everybody was doing fantastic. The unemployment – I mean we were losing maybe 6,000 jobs a month so no one was worried about unemployment whatsoever. Now you talk about an emergency fund and everybody’s, “What do I do? How much do I need?”
It’s very much dependent upon their situation. You can use the economy right now to teach them. For lack of a better word, it is a teachable moment that’s happening in our economy. I have a colleague, master’s degree, two and a half years unemployed, can’t find a job. He had to go through the administration’s mortgage program because they were about ready to lose their house, and that’s a situation that I try and bring into the classes.

This is an MBA educated – get their MBA. He has to hide it on resumes when he wants to go out there because he can’t get a job because he has an MBA, so it’s a very odd moment, but this is where you really talk about the psychology of what’s going on in the country versus your own personal economy. You need to be prepared. You need to have cash on hand.

You need to build up as much as you have. If the average rate of unemployment is six months, the average duration, try to save a year’s worth of income. It’s a lot of money. It’s gonna take you a while to get there, but when you have it, and if something happens, you don’t have to fret.
Obviously, there will be a level of concern if someone were to lose their unemployment, but you can breathe a little by saying, “I have enough money to take care of my family. My insurances are covered. God forbid anything happens. I’m prepared,” and that’s really where you wanna get. You wanna be prepared.

Interviewer: All right, Thom, anything that we should talk about that we haven’t?

Thom Fox: The one thing, because it’s my profession, is financial literacy in the country. Right now we’re at nine states that actually mandate that financial literacy be taught in high school as a matter of graduation, and I think that if a lot more people were to be educated – an education in school is about an education in life, and how could we not talk about finances as a part of that? I understand algebra and everything like that. Don’t like it, but I know that I’m gonna need to understand how to use a credit card much more than I’m gonna need to know how to use algebra, so I’d like to see more states adopt financial literacy just to give people that upper hand when they have to get involved in situations, and they have to do it young too.

As soon as you graduate high school, they were lining up to give you credit cards. That’s gonna change now, but you still have to manage a checking account. You still have to build savings. You still have to understand a budget, so you still need to know the basics of finance, and I’d like to see more places do that.

Interviewer: I constantly scratch my head about it because financial education, financial literacy is something that seems so common sensical, that people should engage in it, but yet you look at organizations like the Jump$tart coalition and you look at their annual reports that constantly show that students that go through financial literacy classes actually score worse on the financial exams than the students who don’t. There’s almost no measurable impact right now. Is the problem that we’re not teaching it the right way or –

Thom Fox: I can’t speak for their organization. I know the organization I’m with – we do pre and post testing. We do show that there is an impact from the education that we deliver. It could be the way it’s in delivery too. I was talking to another blogger on one of their posts, and just like you said, building off that a little bit, people think it’s rudimentary.

They should already know it, and what I’ve seen sometimes is sometimes people teach it that way, like credit scores are this, and they don’t go into the very basics of it. Randy Pausch, when he did The Last Lecture, he talked about something which I always loved. He talked about meeting his childhood goals and one of the things was to play football.

He never got to do it but he said, “You know what? I’m better off that I didn’t because what I did learn from football was what my coach told me when I was a kid. We went in there one day. We wanted to play football and all the kids were like, ‘Well, let’s go play,’ and he’s like, ‘Well, wait a minute. How many guys hold a football at any given time?’

They go, ‘One person.’ He goes, ‘All right, we’re gonna learn what the rest of the people on the field are doing when that one person has the football.’” Basically, what he did is he taught the basics, drilled it into them and if you do that, in my opinion, if you approach personal finance from giving the basics, understanding what’s in a credit score, understanding what aspects should go to certain parts of your budget, once you build that foundation, then it’s that opportunity for someone to build off of. You don’t need to be a millionaire to be rich. You just need to know how to manage your finances correctly and the rest falls into place.

Interviewer: Do you think there’s some benefit to teaching how to use a credit card in practical terms? For example, encouraging high school seniors to have a stored value card that the parents can monitor, have a deposit and use it and know how to look at a statement and read it?

Thom Fox: There’s definitely a benefit to that. Many of the people even that my organization works with – they don’t know how to read a credit card statement. It’s not saying anything against them. It’s just that they’ve never been taught how it is. I still deal with people who don’t know how to reconcile their checking account, and again, I’ve been in the industry for 14 years, and you go, “You think someone would know it but you can’t teach it that way.”

I think there is a benefit to knowing the basics. Anybody can build from there. Again, if I know how I can budget, then I know how I can allocate a certain portion of my funds to invest, so I know that putting that money here, I can now build on that, but again, it all comes from the basics, so I think it’s a benefit for high school students to learn – change up home economics for a sense. We’re not making Bundt cakes anymore. Home economics is how do I keep the lights on in my house? How do I pay my mortgage?

Interviewer: Let’s talk about budgeting for a second. When I see people, when they get into trouble, the first thing they do is they sit down and they wanna make out a budget to accomplish a goal, which is to stop the collectors from calling and meet their expenses, but they trim everything out of the budget that may be perceived as fun, like no going out, no cable TV, no nothing, and they set themselves up for failure. How do you build in a little fun into difficult times like that?

Thom Fox: Well, the first thing I tell anybody to do is first of all call everybody. For instance, the other evening, I call my cable provider ‘cause I’m always looking for ways to save. I was able to find out about promotions that are going on with both the internet service that I have as well as the cable service that I have. I actually wound up getting more cable TV than I had in the past, but I shaved $60.00 a month off just by asking, so before you say, “Well, I’m gonna cut out my cable TV and I’m gonna cut this out,” call everybody, all your service providers, explain your situation.
They know that it’s tough out there, but they also know that they don’t wanna lose any clients, so it’s still a business. Even though I’m not making $150.00 a month off this cable account, I’m also not making zero, so if I can get somebody down to $90.00 and keep them as a cusThomer, I’m still making money. A little bit less, but I still have that client built in. Call everyone.

Don’t cut all the fun stuff out. You still need to – we’re still human beings. A large part of our makeup is our philosophy, our psychology, and we need to decompress. Don’t cut all that out, but again, seek advice too. There’s plenty of agencies. There’s plenty of blogs out there, like your blog and other places that give good advice, and it’s free. You’ve just gotta look for it.

Interviewer: All right, Thom, well, thank you very much.

Thom Fox: Thank you.

@GetOutOfDebtGuy

Jug Rents Me a Harley, Talks About Life, the Economy, and People That File Bankruptcy

Steve Rhode — Thu, 06 Aug 2009 23:30:42 +0000

From How to Get Out of Debt

Jug owns an Eagle Rider store in New Hampshire. He spent a few minutes chatting with me today as I picked up a Harley Electra Glide to take a look around New Hampshire to see how the economy was impacting the area.

This was the third or fourth area that I’ve seen a lot of roadwork being completed as part of the economic stimulus work to help invigorate these economic times. And thankfully there are plenty of roads in New Hampshire that can greatly benefit from repaving.

Jug just recently retired from the local newspaper and admitted that for journalism to move forward, newspapers will need to reinvent themselves and it will probably become harder to find qualified journalists.

Listen to my interview with Jug

If you are facing money troubles or you’ve had to go bankrupt, I think you will find Jug’s views of people that have to go bankrupt, refreshing. But Jug isn’t the only person that has had this point of view. If you listen to some of my other interviews, you will notice a common thread of opinion that people have about bankrupts, and it will surprise you.

You can subscribe to my series of debt interviews through iTunes by clicking here.

@GetOutOfDebtGuy

Transcript

Interviewer: Jug, I’m traveling around talking to people about the economy, credit and debt and how things have affected people. What have you observed? Has the economy hurt your business at all?

Jug: I think the economy has affected us somewhat. Unfortunately this year, this summer in New Hampshire the rain has affected us more but overall people are still looking to go out and have a good time so we are renting.

Interviewer: And what about the local economy, has it suffered?

Jug: I think the local economy here in New Hampshire probably in the last six months has definitely suffered. We have quite a bit of unemployment. Unfortunately the state has had to raise a lot of fees. I think there’s been 38 new fees or taxes added this year in the state of New Hampshire.

Interviewer: Are some of those specifically targeted towards the small business?

Jug: They raised the tax on the rentals from 8 to 8%. Not a big increase but it’s more money. Some of the other fees, license plate fees are going up so it’s all – it’s not really taxes but it’s just little fees that are gonna affect all of us.

Interviewer: Now I’m standing in a Harley rental store, Eagle Rider Store and so what you’re telling me is that even in the worst of times that Harley riders are very dedicated.

Jug: Harley riders wanna come out. I think no matter what people still wanna enjoy their weekend or have a good tome so they’re gonna come out and take a bike and at least get away from their problems for a day.

Interviewer: Have people who have rented, have some of em been people who have sold their bike cause they couldn’t afford it and just now wanna get –

Jug: A lot of people have had bikes in their younger years and now they wanna get back into it so they’ll rent a Harley to try – to get their feet wet again, to see what they like. A lot of people would love to own a Harley but here in New England with the long winters it’s more reasonable to come and rent one than to pay the storage, maintenance, insurance and registration.

Interviewer: Do you know anybody up here who’s been affected by the foreclosures?

Jug: Not personally I don’t. none of my friends have been affected by foreclosures but I recently retired from the local newspaper and every day there’s lots of ads in there for the legal foreclosure notices. It’s probably what’s keeping the business going for the newspaper.

Interviewer: So that’s interesting that you just retired from newspapers. Newspapers have really been hit in this economy. It seems like the newspapers that we knew of yesteryear are not going to survive tomorrow. What do you think?

Jug: I think, well in my case I have two kids, they’re 25 and 20. They grew up in a house with newspapers and neither one of them are big newspaper readers where in my generation, that’s how you got your news and I still read the paper every day.

Interviewer: What do you think journalists are going to have to do, reinvent themselves or leave the field or what?

Jug: I think they’re gonna have to figure out a compensation program to pay journalists to put stuff on the Internet. I don’t know how that’ll work. I know you can go – almost every paper today is online. It has to be to stay in business. I think that’s probably a problem they’re gonna have in the future is getting qualified journalists.

Interviewer: So which do you like better at this time in your life? Would you rather be back in journalism or whatever you did there, or would you rather be here renting Harleys?

Jug: Actually I’d much rather be renting Harleys. This is much more fun.

Interviewer: Do you know anybody who’s struggled during these times, maybe had some money troubles or worries or –

Jug: I think most of the people in my circle of friends are conscientious of their money now. I don’t think anybody’s spending any excess money. They’re not doing major home improvements, maybe not going on the big vacation. I think a lot of people are staying local this year. I think that’s probably true all over America.

Interviewer: And a lot of people that I help all over the country are struggling financially. They’re facing bankruptcy, they can’t pay the bills and they’re very embarrassed and stressed and worried and feel like losers and rejects. What do you have to say for people who are feeling like that?

Jug: Well I think you always have to keep your head up and I think there’s always a sunny day coming. Although I think for all of us there are days you can’t see that but I think if you keep a positive attitude I think you’ll be okay.

Interviewer: How do you think about people who file bankruptcy?

Jug: If that’s the point you’ve gotten to, if you have to file to maybe start over again, I don’t have a problem with it. I hope I don’t have to.

Interviewer: But do you think negatively about those people?

Jug: No, no, no, I mean I think even the best planning gin the – anybody can fall into that trap of I mean all it takes is a couple people in the same family getting laid off and all of a sudden the cash flow is zero. And I don’t think many Americans today have a big enough bank account to go six or eight months without something coming in.

Interviewer: Have you noticed credit card companies have been changing the way they play the game?

Jug: Absolutely, yes. Several of my credit cards, my limit has been reduced and one credit card in particular they’ve just raised my interest rate. It just went outta sight so they’ll be going down the road.

Interviewer: All right well Jug, I thank you very much.

Jug: You’re welcome. Have a great day.

My Interview With the Leaders at the Vermont Country Store

Steve Rhode — Thu, 06 Aug 2009 00:23:39 +0000

From How to Get Out of Debt

The Vermont Country Store evokes thoughts of what life was like many years ago even if you are not chronologically entitled to remember back that far. We think back to simpler times when people knew your name, when candy was a penny and when the local general store was the place to go and meet friends and share stories.

Those days may be long gone in most parts of the country but the guys and gals at the Vermont Country Store have managed to keep alive two outposts of those general store days gone by in Vermont. But thanks to technology the reach of the Vermont Country Store is now global through their website VermontCountryStore.com

Today must have been my lucky day. On sort notice I was able to sit down with the president and CEO Bill Shouldice and two brother’s from the family that owns the company, Eliot and Cabot Orton. We talk about the impact of the economy on a business, when is the best time to start a business, advice for people crossing turbulent waters and how to hold your head up in difficult times.

Listen to the Vermont Country Store interview

The Vermont Country Store is very active in attempts to bring back the right for people to dry their clothes outside on an old fashioned clothesline. Pam and I started doing that again to help cut energy consumption since we put our solar panels in. The Vermont Country Store is a great place to shop for those needed supplies, clothesline, clothespins, and I even walked away with a nostalgic clothespin bag for our outdoor dryer.

Inside the Weston, VT original Vermont Country Store. Doesn’t it just feel like you’ve stepped back in time?

The proprietor brothers and the president of the Vermont Country Store. From left to right, Gardner Orton, Eliot Orton, Cabot Orton, Bill Shouldice

You can subscribe to my series of debt interviews through iTunes by clicking here.

@GetOutOfDebtGuy

Transcript

Interviewer: So the Vermont Country Store has been around since before 1946 right? The first store opened in ’46?

Eliot Orton: Our grandfather Rest Orton and our grandmother Ellen Orton opened the Vermont Country Store in western Vermont in 1946 but before that opened – started a mail order catalog in the fall of 1945 and our grandfather grew up in a small country store up in Callis Vermont, north Callis Vermont. So the country store was in his blood and has been in our family for quite a long time.

Interviewer: So if you just joined us, if you could just give us your name with a voice and spell your name for me.

Cabot Orton: Hi, I’m Cabot Orton, that’s c-a-b-o-t o-r-t-o-n.

Interviewer: Would your great grandfather, your grandfather recognize the business today if he came back?

Cabot Orton: I think they’d be a little astonished at the scale of the business. I think they’d also be surprised by the fact that it’s not just a catalog anymore. We have, of course, a web site and I think they’d be delighted to see how far people will travel from all over the world to visit the two stores that we have here in Vermont.

Interviewer: So do you have – it’s like asking which is your favorite child, but do you have a favorite store? Is it the original or is it the new one or what is it?

Eliot Orton: Well I think we – I don’t wanna say to the folks that work there because they’re both unique and special in their own right. The store in Rockingham at times can be a little less busy on some days than Weston so can go down there and you can kind of be a little more alone to your thoughts. And Weston can be pretty busy on most days but are both truly authentic country stores and unique in their own way and just I love em both.

Bill Shouldice: Yeah, what I like about Weston is it’s in a traditional kind of Vermont downtown setting off the green. And so it’s just, it’s picturesque. But the same token, you know what’s really exciting about Rockingham is it has the same merchandise assortment but it’s got a nice covered bridge around it. All the land around it is very bucolic and hearkens back to the agrarian roots of Vermont along with a beautiful trout pond and a gristmill and it’s just – it’s a special place as well.

Interviewer: Well, I’m traveling around asking people about the economy we’ve heard so much about, it’s a difficult economy, people losing their jobs, foreclosures. What’s your impression from where you sit here at the Vermont Country Store? Do you notice a difference in the Vermont Country Store?

Bill Shouldice: Yeah I think, here’s what I think, I think that the Vermont Country Store is lucky. We have a longstanding tradition of selling products and we’ve got just a phenomenal loyal customer base. And we’re paying very close attention to both. The products that we’re offering them, making sure we’re focusing on quality as we always have. We’re not allowing ourselves to get distracted by that. Making sure that we’re offering good pricing and good price points and we’re focusing on service.

You know it’s really tough right now when you go out, when you shop in retailers and you can’t return anything or they say it’s out of warrantee. When you shop at the Vermont Country Store, 100% customer satisfaction from the day you buy it until the day you decide it’s met its ultimate end. So I think we’re just harkening back to our roots and I think it’s serving us well right now. I think our customers are loyal and I think they’re telling other friends about it and we’re able to have a little bit broader reach than maybe we have in the past by our web site. But I think the combination of those things and sticking to our knitting and who we are and not being distracted by some shiny new object or direction I think is serving us well right now.

Interviewer: Is that difficult to say, look, there’s a great new idea, like we’d like to head this way but it’s so much different than what you’re doing right now? Is that a temptation at all?

Cabot Orton: In terms of growing the business or changing the business?

Interviewer: You ever want the Vermont Country Store ski slope or you know –

Eliot Orton: No, I mean there are certainly opportunities as well in our industry. There’s certainly a lot of mail order catalogs that are having hard times. And I know there are a lot of opportunities for a company like ours to possibly go out and merger or acquire other businesses but that would also take away from our focus and the types of products that we sell and the core fundamental values of who we are as a business. And so I think there are always those temptations but I think at this point we’ve seen that it’s served us well to – as Bill said, stick to our knitting and keep our focus to the core attributes of our business that have made us successful over the last 65 years.

Interviewer: Do you think at all about your customers who might be struggling out there and trying to offer them any special deals during these times or to keep them motivated as customers?

Bill Shouldice: One of the things that we have is we’re an accessible brand. The Vermont Country Store is – we’re not aspirational in terms of high ticket. We sell everything from a piece of penny candy, literally, a piece of penny candy to a really industrial strength vacuum or a doormat. And so you know people have a way of thinking of the Vermont Country Store as a way to help them through this economic downturn and to be well positioned to not only help them with their – the things they need to run their household but ultimately to – we do a great holiday business as well, so they’ll come back to us and do their gift shopping.

So we all said as part of our duties as owners and as executives at the Vermont Country Store, that we refer to ourselves as shopkeepers. We sit on the phone and we talk, we hear from our customers. And they’ll say, “Jeez, I only have so much to spend on a particular garment. Can you help me?” And we take great pride in the fact that we help them through that purchase. We do the same in the store. A little bit harder on the web but there’s some ways of price points and suggestions that can be automated at doing that but we don’t default to artificial intelligence at the Vermont Country Store. We still keep a shopkeeper’s eye and we try and touch every item and every customer one-on-one.

Interviewer: Do people spend more when they call on the phone and order or when they order on the web?

Bill Shouldice: It’s about the same. They’re – we still get a lot of people who are sending us an order by mail. We still get cash in the mail. People will send us cash and just have not forgotten that that is a currency of choice not that long ago. But no, it’s a – the orders that we get are pretty standard from web to catalog to what the store – interesting thing about the store, and you’ve been there is when you can touch it. The store is the – the purchases they have there and it’s a little bit more broader because we also in our Weston store have a great restaurant called the Bryant House and we offer everything from Johnny cake there to ice cream to shepherd’s pie and a special sandwich of the day. So you tend to get – they stay a little bit longer at the store. You get a little bit more – it’s a place they go to say I’m going to the stores for the day. So they spend a little bit more there but by in large I think we’re pretty consistent across the channels.

Interviewer: What advice do you have for people who are living through difficult times right now who are struggling? I mean just advice from the heart. How do people make it through difficult times like that?

Cabot Orton: I think the keyword is community that nobody has to go through difficult times alone. You know our grandparents spent their formative years in the great depression. When they were our age, times were harder than anybody could have remembered or could have foreseen. And they made it by being involved in the communities that they lived in. They lived in a small town in western Vermont. And people relied on one another for a sense of connectedness, for reliability, for support, and at the end of the day there’s an awful lot we miss in a life of individualism and consumerism.

The gratification of connecting with other people around us and being part of something larger than ourselves. We believe in that and as Vermonters, it’s a fundament of our business and of who we are and we may be facing challenging times now. But as Vermonters, we think we’re probably better poised to go through those times and flourish than we may otherwise be living in other parts of the country that are less rooted and less grounded in tradition and history and community.

Interviewer: Is this a bad time for someone who is unemployed, has an idea, wants to be an entrepreneur? Is this a bad time to start a business or is there a good time or bad time? What do you think?

Bill Shouldice: I think the access to capital is really a stranglehold. It’s tough right now. You know folks have got their – if they’re out of a job they don’t have the income. If they’ve been out of a job for a while they’re probably incurred some credit card debt or have some back bills. So their credit as you’ve heard throughout the country is in a tough spot. And then banks aren’t lending. So I think it’s gonna be a tough struggle. I also think though that – you know I’ve heard some people who’ve been displaced and said, “I got nothing to lose,” throw caution to the wind, so there’s a little bit of that I think going on as well. But I think it’s a – I think this economy is going to – at least in Vermont – our down I don’t think is gonna be as down but I also think our recovery may not be as quick as others. So there’s something to be said for that.

Interviewer: So speaking of your grandparents and depression, what would your grandparents say about all of this credit card debt, all this easy mortgage, what would they say to that?

Cabot Orton: It’s absolutely antithetical to everything they grew up believing. The idea that you could pay no money down and buy a house. The idea that you could buy everything on credit far beyond your means. The idea that you could make a living producing nothing, creating nothing to show for it and that’s where really our economy has been over the last 30 years increasingly. So I think they’d be absolutely baffled and rather horrified by it.

At the same time I think that they furnished us with a sensibility that will carry us very well in terms of sacrifice, in terms of austerity, in terms of practicality, in terms of frugality. These are values we didn’t just abandon when we embraced credit and we embraced the opportunity of high finance. So it’s still central to the way we live our lives.

Interviewer: Right now there is no Vermont Country Store credit card.

Bill Shouldice: No.

Eliot Orton: No.

Interviewer: If some big bank came and offered you some great deal, does that kind of go against the beliefs of the Vermont Country Store to extend easy credit to customers or –

Bill Shouldice: There’s a lot of – you look at what’s happening to retailing over the years. You know Sears was a great retailer for years by all accounts, created the catalog business itself. And what are they now? They’re a finance company. They’re selling to you when you buy something that you think is quality, they’re selling you a credit card and they’re selling you warranty services. They’ve gotten away from what they were.

We are true to our core. And the Orton’s – you can’t work at the Vermont Country Store if you don’t understand one simple thing. We sell products that don’t come back to people that do. We focus on products and we focus on customers and all the rest of it around it is noise. And so we get em all the time, people who call us and say, “We’d like you to offer this financial service,” or “do it on credit,” do it on some new scheme and we don’t allow ourselves to be distracted by that.

Interviewer: Is that the launch code comin in?

Cabot Orton: Making you an aural canvas.

Interviewer: Last question guys. I’d like to hear from each of you on this one. People right now, as I said before, difficult times, losing homes, losing jobs, filing bankruptcy and they’re suffering in silence. They feel like losers and rejects. They’re just real down. What advice do you, each of you individually have for somebody in that situation?

Bill Shouldice: I think Cabot’s already started to talk about it. I believe that your community that you live in and you know, one thing about Vermont is we were raised in a – with a heritage of a barn raising party where people came together to help one another, shared labor to get the crops in out of the field. We still believe in the value and the virtues of town meeting and the fact that if your house catches on fire, the volunteer firemen are gonna be there to help you out. And I think it’s times like this, be it a natural disaster, be it an economic disaster, I think in places in Vermont people come together and they network and they share and so you know –

Interviewer: So they shouldn’t be afraid to suffer in silence? You’re saying they should reach out for help?

Bill Shouldice: No, I think what, I think people know and there’s a pride that comes with it in Vermont. We’re a small state of 600,000 people. They know who your neighbor who’s displaced. They know who the kid who was trying to get to college and hasn’t gotten a summer job because they are a hugely impacted population this year. Summer jobs which were once held by teenagers to make their spending money to buy their books and pay their share of the college loan, those jobs are gone.

I have somebody working for me this summer whose son couldn’t find a job and so he’s cutting my grass and doing things because his father wants him to have that work ethic and because he knows he needs to make a little extra money. So I think the double-edged sword that you speak of is absolutely true cause the pride to suffer in silence I think is very much a part of it but I think in caring, thoughtful ways, in a place like Vermont which is a special place, I firmly believe that. I think we have a little bit of a leg up in helping people get through that.

Interviewer: Cabot?

Cabot Orton: I’d say find a way to be of service to others and you’ll never find yourself wanting and you’ll never find yourself alone. That it’s truly powerful and when people can connect with those around them in a community and a neighborhood; it transcends the feeling of alienation and being alone in a hard place. And it sounds like a cliché but it’s the one thing you can always count on is the people around you.

Eliot Orton: Yeah, I think I’d echo my brother’s statements on that that. I feel certainly when folks are probably at their last end and feel they have no more, that to look for any way that they can give and help others even in the most minute way is very empowering and can connect you to opportunity that you didn’t know was around you. And I think certainly in the times of hardship we’ve seen that during national disasters and tragedies that occur. When folks bind together and bring out that spirit, I mean certainly New York City is forever changed because of the events that occurred there on 9/11 that there’s a spirit that still is there of friendliness in the streets. A willingness to – you know if you ask folks for direction, that a willingness to help one another that came out of that. And I think that will come out of the hardships that we’re in now and that’s the enduring spirit of our nation, what makes America great. The melting pot attitude and the energy that we have as neighbors and as a nation that’ll carry us through this.

Interviewer: All right, thank you very much gentlemen. I appreciate it.

Eliot Orton: You’re welcome.

Cabot Orton: Thank you.

My Interview With Bill. Hotels, Vacations, Being Your Own Boss, and More.

Steve Rhode — Wed, 05 Aug 2009 00:39:50 +0000

From How to Get Out of Debt

Bill is the director of marketing for a resort and also has been his own boss and lived through periods of unemployment. Today I had the pleasure of sitting with him on a roof top terrace in Lake Placid, NY and pick his brain on a variety of topics.

You will be very interested in the tips and secrets that he shares to help you book a memorable but affordable vacation at a hotel and resort. His opinion and advice about how to deal with adversity, retain customers and what it is really like to be your own boss and insightful as well.

I really enjoyed his outlook on life and how to face the darkest days of life and debt and his outlook on bankruptcy in your life. Listen and discover why his emergency fund was critical in his life.

Listen to interview with Bill.

You can subscribe to my series of debt interviews through iTunes by clicking here.

@GetOutOfDebtGuy

Transcript

Interviewer: Well, I’m traveling around talking to people about the economy, credit and debt, and the economy, you know, in some parts of the country has really kinda taken a nosedive and people are desperate and they’re losing their homes, but in other parts of the country, it hasn’t. So in your world, have you noticed a difference with the economy?

Bill: I have noticed a difference in the economy. I work in travel and tourism and I noticed in that specific industry that we’ve seen the trends is people are waiting until the last minute or waiting to see if they’re going to have a job. They’re waiting to see if the economy is going to improve. They’re just – it’s a lot of waiting to see what’s gonna happen and now that we’re moving through the summer and we’re into August now and Labor Day’s gonna be here before you know it, people are putting less importance on the economy and more importance on, “Well, we still need to get away.”

But the first portion of the summer I – we – I can tell you that in our particular industry it was definitely a down year and so from that perspective, I have – we’ve seen the economy really affecting people’s decisions to travel, how long they’re gonna stay and how much they’re gonna pay. Our guests and guests of – you know, of people in the – of other, you know, hotels in the area have said that they’re waiting until the last minute to see the best deal. They’ll call and they’ll haggle. We’ve never seen that before and they’ll just – they’ll shop and shop and shop. Whereas in the past it would be, “Okay. Oh, that’s the rate? Okay, we’ll take that rate.” It’s – it really hasn’t been that way this year.

Interviewer: Yeah, it’s been interesting because along my travels like two nights ago I was at a Marriott in Buffalo and they told me what the rate was and they said, “Is that okay?” And I said, “Well, you know, it seems a little high.” And they went, “Okay, well…” And they knocked off 50 bucks.

Bill: And that’s sort of par for the course. You – if somebody walks in, you don’t let them leave, whatever it takes to keep them. Otherwise that room goes unoccupied for the night and you – in a way, you would want that to be at least – you want someone to be in that room at whatever rate you can get. But there are certain periods where you – you know, where there’s – where occupancy is high and you can still get those top rates and so right now as we’re moving into August, I – it feels like things are moving back to normal, whatever normal is, but a little more predictable in terms of the trends. Really though, the first five or six weeks, I would say right after June 21 until just about last week, it was tough going. It was an environment that I’m not familiar with.

Interviewer: Now what is the – what’s the cost for a hotel – not wherever you are, but just in general – for a hotel to maintain a room?

Bill: I mean it depends. You know, if you’ve got – what type of amenities you have in the room, how often you turn it, if you’ve got, you know, once or twice a day, if you’ve got turn-down service. More or less it’s anywhere between $35.00 to $50.00 a night to turn a room and then of course there are other, you know, costs involved with that, but I’d say high end you might be looking anywhere to 50 to 60.

Interviewer: An empty room earns you no money.

Bill: An empty room surprisingly earns you not a dime.

Interviewer: (Laughter)

Bill: The end. The average daily rate on an empty room is zero. But, you know, the flipside of that is that you sometimes don’t want to compromise your own rate integrity, that if you’ve always gotten a certain amount of money for a room and there are expectations in the marketplace for what you can charge for a room and you start to drive rate lower and lower and lower, when the economy starts to pick up again, bringing the rate back up is not as easy as one might think and so you try to give guests other value-added items, whether it be food and beverage or an extra night stay for the – you know, two for three or something like that. So you really try to retain guest rate integrity as much as possible in this particular industry. Like anything, you know, it’s easier to lower the rate than it is to raise it.

Interviewer: So what’s the secret for people when they’re trying to negotiate? If they’re trying to decide between a staycation – it’s the word of the year –

Bill: Sure.

Interviewer: – or go away, is there something that they should know about how to negotiate to get the best rate?

Bill: You’re giving away all our trade secrets here.

(Laughter)

Bill: I don’t – I would say that there’s no secret. It’s just too – the term of do your due diligence. I would say just shop around. Make sure you are getting the best value. Don’t settle for the first good deal you see and to read the fine print. Ask as many questions as possible. You know, even in this industry, if it seems too good to be true, there’s a chance that it might be.

Also, sometimes it’s not bad to spend a little extra to stay at a place you may – might not otherwise stay at because everyone’s keeping their – trying to keep either the rates down or to offer value-added packages out there. I’d say just don’t settle right away. Don’t say yes to the first offer. Always say, “Well, do you have anything else?” or “Is that the best you can do?” And a lotta times a reservationist or somebody will come back and say, “Well, we do have this” or “We do have that” or “If you stay an extra night we can do this” or something like that.

Interviewer: Is it better to call the hotel directly?

Bill: Call the hotel directly only ’cause there’s so much you can do online. You can put your prices out there. You can put packages out there, but you don’t have that one-on-one of talking to a person and we’ll have people call who are looking right at our booking engine and say, “I’m on your booking engine but I wanted to call.” And there is something to be said about that human contact of speaking with a person and a reassurance of they know exactly what I want and what I’m looking for.

Interviewer: Is it also good to call up and say, “I’ve spoken with Hotel X, which is just down the street from you, and here’s their rate. Can you –?”

Bill: No. I would say hotels – it’s hard for a hotel to – I would say not to do that. (Laughter)

Interviewer: Okay.

Bill: Well, and again, you could say, you know, you personally know what you’re looking for. When you start to pit hotels against each other, it sometimes works to your disadvantage and that’s – you know, you don’t – we – hotels want you to stay with them. You know, restaurants want you to eat there. But like anyone, no one likes to be put in a compromising position. We want to give you a wonderful stay, a great guest experience, regardless of where you’re gonna stay, but nobody likes to feel manipulated.

And so I would say, you know, as long you’re being genuine and honest and saying, “This is really what I’m looking for” – I wouldn’t say, “Okay, this is what I’m willing to pay,” but say, “This is what I would like to do and this is – I’m coming out and what can you do for me?” And if they don’t have what you’re looking for and they – you know, and you shop it around, you know, and you find someone that does, you know, stay with where you feel comfortable. You know, you – some of us only get one vacation a year. Some of us don’t get any.

Interviewer: Well, you had mentioned before we started talking that you were an entrepreneur. You were your own boss.

Bill: I was.

Interviewer: And a lotta people out there are their own boss right now and what I’m hearing is the money was coming in but it’s not coming in as much now and I’m worried about what to do in the next six months and do you have any advice for people who are their own boss?

Bill: I would say don’t give up on what you’re doing if you’re doing something that you love to do. This is a tough time for everybody. It will not always be like this, though. Things – we’ve all been through tough economies. We’ve all been through down periods and up periods. If you can just get through this period, you know, live within your means. Don’t overspend. Really concentrate, whatever you do, on customer service, on making sure you retain the clients or the guests or the customers that you have.

That old saying is it’s six times more difficult to gain a new customer than to keep an existing one, it’s true. So, you know, once you are able to get someone to use your product or to try your service or to read your blog, as I was – as I once did, do whatever you can to keep them, especially through this tough period, because once we start to come out of it, that core group of fans that you have or loyalists or whoever, you know, that believes in you and your product, they’re gonna stay with you. It’s not all about price. It’s not always about what you’re charging someone but what you’re giving to them.

Interviewer: Is this – this down economy, is it a good time to start a business?

Bill: You would see – you would think it would be, the number of people that are starting new businesses. I think that, you know, people are turning to entrepreneurship as a way to get back to work. I mean I have many friends who’ve been outta work. My brother, in fact, has been out of work for about a year now and has talked about starting his own business just for lack of not being able to get another job and so, you know, you can only live so long on unemployment and you start to get stir-crazy.

But then you also do have a lotta time to reflect and to say, “What is it that I actually enjoy doing? What is it that I really want to do with my life? Do I want to sit in an office? Do I want to manage people? Do I want to wait tables? Do I want to” whatever it is and – or is it “Do I want to be an entrepreneur? Do I want to provide something to people that I can only do if I open my own business?” I would say there’s no good time or bad time to do it. If it’s something you are passionate about and you believe in, don’t let the economy tell you what you should and shouldn’t do. Just listen to your heart.

Interviewer: Have you ever lived through a difficult time or a period that might have been labeled a failure and how did you pull yourself through that?

Bill: I think it’s an individual. I think people – all people react differently to adversity. I don’t want to play, you know, armchair psychologist here, but I just think if you believe in yourself and you have – basically you believe in what you’re doing and, you know, good times, bad times, you know, we’ve all had our share. I mean you think that it’s – that things are as bad as they could ever be and they’re not. Never think that things are as bad as they can be ’cause they can always get worse, but the truth is is that they’re gonna get better and so if you get fired – I’ve been fired from jobs before. I’ve been fired for a lot of reasons.

You know, it’s just – I’m in marketing and when things are good, you know, marketing gets no credit. When things are bad, marketing gets all the blame and, you know, being in marketing, it’s a tumultuous field and so I’ve lost positions and you feel like you are worthless and you have nothing to offer the world and then you just have to keep doing what you’re doing. You have to believe in what you’re doing and just say, “I do have something to offer and I can contribute.” Just – it comes back to don’t let anyone else tell you what you’re good at and what you’re bad at and what you can contribute. There’s one person in the world that can do that and that’s you.

Interviewer: So a lotta that advice applies to having financial problems, too. Your creditors are yelling at you. Your collectors are yelling at you, whatever, and you’re feeling hopeless. Do you just try to find that positive face and move on or – ’cause a lotta people are just scared out of their gourd.

Bill: Yeah. I mean it’s that fear of the unknown, like what’s gonna happen tomorrow and the sun always comes up, you know. It – things always move for – my mother used to say that all the time, you know. No matter what you do, you know – I wanted to go back and get my master’s degree, which I eventually did – I went back and got it in teaching. I’m no longer a teacher but, you know, I remember my mother said – she’s like, “Well, you – whether you go back to school or you don’t go back to school, those years are gonna come and go anyway.” So, you know, don’t revolve around what-ifs and who – you know, maybes.

You know, you just – yeah, okay, so maybe you have too much debt. Maybe the creditors are knocking down your door, but there’s always a way out, whether it’s, you know, by declaring bankruptcy or consolidating or, you know, just again living within your means or living even within within your means. You know, there’s always a way to figure it out, and it’s not the end of the world because these days are gonna come and they’re gonna go and then there’s gonna be good times ahead and rest assured, there’s gonna be bad times ahead.

So just, you know, always – you have to take – it’s – you have to take a very – just I think just take a thoughtful approach to everything and just don’t – you can’t over – you just can’t exaggerate issues and you can’t get – listen – one thing you – and again, I know I’m rambling here. Don’t get wrapped up in what people are saying on television because if you do, it’s gonna be a lot of rhetoric and hyperbole and a lot of exaggeration and it’s gonna make you feel really bad because it’s a lot of scare tactics out there and –

Interviewer: Have you ever relocated for a job?

Bill: Well, for this particular job. I live in Albany and I work up here in Lake Placid, so I’ve half relocated, so I travel for my job.

Interviewer: And would you ever consider moving across country to try to find a better opportunity or do you have your limits, that Albany –?

Bill: I have my limits. I have family. I’m a homebody. I’m an East Coast guy, so I wouldn’t – my brother lives in Atlanta. My other brother lives in Jersey. You know, we’ve got pioneers in the family. I’m not one of them.

Interviewer: Now one of the things that I hear are people who are just in terrible financial straits and they need to go bankrupt, but they’re concerned about this stigma of being labeled a loser or a failure or something else.

Bill: Mm-hmm.

Interviewer: Do you have any advice for people in that situation?

Bill: Again, I don’t think you can worry about what people think about you. You need to worry about you and your family and you need to do what’s right by you. If that’s declare bankruptcy, it’s not the end of the world. I mean if you have to do it, you have to do it. You do it; you move on. And it’ll be tough and you may have to, you know, take some – you know, some looks from people and, you know, maybe certain – some of your friends won’t be your friends after that. Maybe they weren’t your friends in the first place, but you need to do what’s right by you and your family and that’s the only advice I would give anybody.

Interviewer: From your marketing days, do you know somebody who had a flashy appearance to the outside and it was all built on sand?

Bill: Yeah.

Interviewer: And then they lost it?

Bill: That’s the essence of marketing. No, I – sure, sure. We all know – I think we all know people like that and, you know, I definitely am not – I would never judge. I mean there are – people come in many shapes and sizes and some people are ostentatious and they’re boisterous and when you really drill down and you find out there’s not a lot of substance there and some people are quiet and thoughtful and there’s a lotta substance there and so, you know, the world needs loud people and quiet people. It needs all types and so who am I to judge?

Interviewer: And finally, I think the news is kind of turning. We’re seeing little green shoots of there’s hope coming or whatever, but a lotta people are feeling very bad. How are you feeling about the economy?

Bill: Well, I’ve got a house, got a car. I’m – I don’t have a lotta debt beyond, you know, just paying, you know, for my home and my cars. You know, we’ve paid off all of our student loans. I mean we’re a single-income household. My wife stays at home with the boys and we’re able to make it by. We’re frugal. I mean we really live well, well within our means and we don’t really go out and do much of anything, so personally, the economy hasn’t affected me either way.

I mean it was tough when I was looking for a job, you know, but was able to find this I think before the economy took a turn, but for us, it’s – you know, we’ve always sort of – we’ve always just sorta been very, you know, not – we’re not really spendthrifts. We’re really not, so it hasn’t affected us. I know people would be – are like shaking their fist saying, “Oh, who’s this guy to think he’s better than the economy?” But the truth is it’s – you know, it hasn’t really bothered us.

Interviewer: Do you have an emergency fund? I mean have you focused on saving at all?

Bill: We unfortunately a couple of years ago went through a period where I was out of work and we had to tap into my 401k and we’re building it back up at this point, so I know of some people who’ve had to do that and we are part of that group. But, you know, we don’t have that. We don’t have that fund.

Interviewer: Any final words of wisdom?

Bill: I don’t think that I am a person to give wise advice. No. No, I – I would say that, you know – that if you have not – you know, to go back to where we started that, you know, the summer’s almost gone. You know, even if you can get away for a day, I would say it’s good to break away from your routine and to just detach and unplug and to – I think it helps you gain some clarity on where you are and where you’re going. I think vacations are critical for the psyche.

Interviewer: So even in a downtime you deserve to reward yourself a little bit at least.

Bill: I think everybody deserves a reward. I do.

Interviewer: Okay, speaking of rewards, what would your reward be for this summer? What would you really like to do?

Bill: I’d like to unplug for a day. I do – part of my position and what we do is I’m also – I’m the director of marketing but also the director of social media and so a lot of what I do requires me to be online at least once a day for something. So my wife and I have talked and we’re gonna take a vacation after Labor Day ’cause at that point there’s a few periods where I can technically unplug. That would be my reward.

Interviewer: To power off all your devices.

Bill: I just turn them all off.

Interviewer: All right. Well, thank you very much.

Bill: No, it was my pleasure. Thank you.

My Interview With Derek, a 23 Year Old Soon to be Father

Steve Rhode — Tue, 04 Aug 2009 00:36:36 +0000

From How to Get Out of Debt

Derek and I met in Buffalo, New York where we hd a chance to sit down and discuss a wide range of topics. Since Derek is a young man and just out of college his opinions about student loans, campus credit cards, reading contracts, and trying to get by are very enlightening.

He remembers his mother having to use food stamps and he might have to resort to using WIC and food stamps again as he and his young wife try to make ends meet and prepare for the birth of their first child.

Listen to My Interview With Derek.

You can subscribe to my series of debt interviews through iTunes by clicking here.

@GetOutOfDebtGuy

Transcript

Interviewer: I wanted to talk about the economy right now. So we’re in Buffalo, New York.

Derek: Right.

Interviewer: And have you worried about the economy? Are you concerned about it?

Derek: A little bit. Yeah, just coming out of a – got my master’s degree and it’s – you hear a lot about, you know, not being able to find a job and, you know, it’s kind of worrisome. (Laughter) But not too much in that, you know, try not to let it get to you too much.

Interviewer: Have you ever or have you known somebody that’s worried about money?

Derek: Everybody. (Laughter) Who doesn’t? But –

Interviewer: How does that feel when you worry about money?

Derek: It’s – you go into panic mode sometimes if, you know, you get, you know, in over your head or – you know.

Interviewer: Does it – I remember when I went though it. I felt like I really couldn’t talk to anybody. I was embarrassed about it.

Derek: Right, yeah. It’s –

Interviewer: You end up kind of suffering in silence.

Derek: Yeah, exactly.

Interviewer: So what do people do when they get in that situation?

Derek: It’s – I don’t know, try to find a way out anyway, you know, any way you can get out. (Laughter)

Interviewer: Well, who should people talk to?

Derek: I would talk to my parents. (Laughter) But I don’t know, somebody that you know is successful so you can see what they can do or if they can help you or whatever or look for a job.

Interviewer: Have you ever had to call a creditor and ask for help or some kind of –?

Derek: I have not, no.

Interviewer: No.

Derek: No, not yet, but maybe one day. (Laughter)

Interviewer: Do you have any loans or credit cards in your name?

Derek: Oh, yeah. I got a ton of student loans. I’m managing to pay out the credit cards, but student loans are a big deal.

Interviewer: How much do you owe in student loans?

Derek: I think around 20. You know, I had my graduate school paid for in the system chip but that helped out a lot, but yeah, a lot. (Laughter)

Interviewer: Did – were student loans easy to get into? I mean –

Derek: Oh, yeah. Yeah. And we always learn, you know, if you’re gonna have loans, student loans are pretty good because they’re really low interest and, you know, so that’s kinda the word around everywhere that I’ve been, you know.

Interviewer: Did the college promote student loans as, you know, here’s the easy way to get financing or –?

Derek: I’m not sure that they promoted it, but they offered it, you know. There’s always that option.

Interviewer: Did anybody – did you have to go through any financial counseling with the school before you got the student loans?

Derek: They make you do like an introduction counseling and actually counseling says, you know, I’m gonna pay these back and I understand how it works, you know, over time, the interest and everything.

Interviewer: What did you get your degree in?

Derek: I got my bachelor degree in anthropology and archeology, which, you know, is what I’m working on now and I got my master’s degree in historic preservation.

Interviewer: So you’ve been watching Time Team America?

Derek: I – when – we live out in the country now and it doesn’t come in very well when it’s on. (Laughter) But when it’s on, yeah, I watch it.

Interviewer: It’s funny because when I – I lived over in England for two years and Time Team actually started over there.

Derek: Oh, really.

Interviewer: And the crew that does it is really dynamic, so the difference is here on Time Team America they’re like, you know, scraping stuff away and after three days they’ve gone down this far.

Derek: Yeah. (Laughter)

Interviewer: Time Team Europe, they come in with a backhoe. (Laughter)

Derek: Yeah. (Laughter)

Interviewer: There’s just so much stuff they don’t care. (Laughter)

Derek: Yeah. (Laughter)

Interviewer: So what about that field? I mean is that a good income-earning field?

Derek: No, but I like it, you know. It’s – you know, obviously if you’re a teacher you can make more money and, you know, but it’s – I got into historic preservation thinking I would find a job easier ’cause, you know, more encompassing, but as I’m looking there’s more – they want the master’s degree in archeology or something, so I kinda, you know, got lost in that. But – and I like archeology a lot better than the architectural, but it’s all interesting and here in Buffalo we have a lot of it and it’s – with the stimulus stuff going on, there’s a lot of like Section 106 where, you know, if there’s federal money being put into a project, you have to make sure that there’s no historical value to it or archeological, you know, data that could be lost and all that has to be, you know, funds so it should be a good field with the stimulus going on, but I haven’t really noticed anything yet, so.

Interviewer: What’s your backup plan?

Derek: Just keep looking for a job, you know, hopefully something with my education, but if I have to, you know, I’ll work at McDonald’s or something, and I’ve been thinking about joining the Coast Guard or something, you know, as a last resort obviously. My wife doesn’t like it or – you know, and my mom. She’s been opposed to it since high school, but I – you know, I have to talk to a recruiter and make sure, you know, it’s all – like works out, but that’s a last resort, for me at least.

Interviewer: Are you working now?

Derek: Yeah, I’m working at like a seasonal-type job doing archeology with the Section 106-type stuff.

Interviewer: How does it feel being an expectant father?

Derek: Oh, geez.

Interviewer: Does that become – do you get a little stressed about thinking about money and ______?

[Crosstalk]

Derek: Yeah. (Laughter) Yeah, it’s tough, you know, but New York State seems to be pretty – there seems to be like funding out there, like, you know, you can get WIC or, you know, food stamps if you had to. We haven’t done that yet, but if we had to we will and, you know, it’s time – you know, time-consuming. There’s a lot of paperwork and stuff and – but it’s – you know, it’s out there and it’s good, so.

Interviewer: So what do you think about people who can’t pay their bills and file bankruptcy? Do you think that they’re just in a bad situation? Are they losers? Are they cheats? Are they – what are they?

Derek: You know, it – I tend to think that they’ve been, you know, in a – you get caught up in a bad situation. You know, sometimes, you know, you can’t help but think that somebody – you know, maybe they’re a loser or something, but, you know, everybody, you know, goes through the hard times. And it’s – you know, you gotta look past, you know, what you might think of people and, you know, just realize that you could be in their situation at any time and you never know, you know. It’s scary and, you know, it’s not something you want to deal with ever. (Laughter) You know, you don’t want to run outta money. It’s important to us, you know, here, but –

Interviewer: What school did you go to?

Derek: I went to – I started out at community college which turned out to be a really good idea ’cause it’s cheaper and you get your early stuff, you know, your pre-reqs out of the way and I went to the University of Buffalo, and I actually went to graduate school outta state at Ball State University in Muncie, so.

Interviewer: Was – when you were on campus, was it easy to get credit card applications and –?

Derek: Oh, yeah, especially at UB. It seemed like there was a credit card guy out in the, you know, main commons all the time, you know. Yeah, there’s a Facebook group saying, you know, how to avoid them and everything. We’d come up with clever ways to get outta there. But, you know, they’d offer you, you know, free burgers at Burger King or a sub at Subway or something and, you know, most people know that – you know, not – don’t do that and – you know. But they’re – yeah, they’re all over. (Laughter)

Interviewer: Did you know anybody in school who got in over their head?

Derek: Oh, yeah. Yeah, there’s, a lot of our friends, you know, that did it and, you know, they’re thinking about going bankrupt and stuff already and they’re young. You know, I’m only 23 and, you know, it’s scary to think about that, you know.

Interviewer: So when you were watching your friends who were struggling, what do you think was going through their mind? What – were they stressed? How were they acting?

Derek: You know, surprisingly not as stressed as I think I would be. (Laughter) But it’s – you know, they seem – you know, if you want to go out or something, you know, I have no money, but they’d probably still go out anyway and, you know, then you start to think, you know, maybe you shouldn’t be doing this to them. (Laughter)

Interviewer: Right. So what are your plans after you find this job? Do you want to eventually buy a house, buy a car?

Derek: I’d like to buy a house. I’d like to find a job here in Buffalo ’cause I like the city a lot and, you know, it’s – I hear their houses are pretty cheap here relatively, you know, and I’m hopeful. I think Buffalo’s gonna come back. There’s a lotta people moving out, but I think there’s a lotta people coming back in, too, so – but if I had to – I’d like to stay in the Northeast for whatever reason. I’m not really sure why. (Laughter) But I like all the seasons and I like the snow a little bit.

Interviewer: They do have snow up here.

Derek: Yeah, we do. (Laughter) Yeah.

Interviewer: Does – what – it’s that snowy in the wintertime. Does it – it obviously kills the seasonal jobs.

Derek: Oh, yeah. Yeah. You know, what I do now like is all – it’s all fieldwork and that basically comes to a standstill, you know, unless there’s some emergency stuff that needs to happen and I get called by boss and all that, but yeah, there’s a lot of seasonal jobs and all the kids are back in school and stuff, you know, for the fall and winter, so it seems like a lot of the lower-end jobs like the McDonald’s or working at J. C. Penney or something are taken up by them, you know, so that – I’m sure snow removal does pretty good. There’s a lotta people that have snow plows on their trucks and come clear driveways and stuff, but –

Interviewer: Well, who taught you about money growing up? Anybody?

Derek: (Laughter) High school teachers. I watched my mom and dad, too. You know, we had to take economics here. It’s part of, I think, the regents’ programming for the high schools here and, you know, you learn a little bit about that and just watching people, I guess. Watch CNN once in a while or, you know, hear about it on the radio or read in the newspaper.

Interviewer: Do you think that credit is too easy to get?

Derek: Yeah, I do. Yeah. (Laughter) It’s pretty easy.

Interviewer: You said that you do have credit cards.

Derek: Yeah.

Interviewer: And when you – did you get those in school?

Derek: Yeah, I think so. (Laughter)

Interviewer: What was the free gift that you got? The sub or something?

Derek: I don’t even remember. (Laughter) I might have not even gotten a free gift. I – just, you know, but –

Interviewer: So now a new law has passed saying that people under 21 can’t apply for credit cards.

Derek: Really? Well, that’s good. (Laughter)

Interviewer: Yeah. So can you imagine what college would be like if nobody had credit cards on campus?

Derek: Probably better. (Laughter) As long as they didn’t get rid of student loans, I think it’d be good, but yeah, credit cards, I tend to think that they’re not a really good idea, you know. You know, we’ll see how it goes when my kid’s old, you know, grows up. You know, I’ll try to talk him out of it, you know, unless something happened – good happens with them. I have no idea. But yeah, I can’t see any good coming from credit cards. If you don’t have the money, you probably shouldn’t be going after it.

Interviewer: Your student loans.

Derek: Yeah.

Interviewer: When – some people now are taking 25 to 30 years to repay their student loans.

Derek: Yeah. (Laughter)

Interviewer: Do you have some sort of graduated payment plan or –?

Derek: I honestly don’t remember what I selected. (Laughter) But yeah, that’s all, you know, offered on there, like you start out paying, you know, a little bit and then, you know, when you get older you end up paying more, which is kinda scary, ’cause I don’t know if I’ll have a job when I’m older. I don’t have a job now, you know, a permanent, you know, good, awesome-paying job now. But yeah, so it’s cool that they – you don’t have to pay it right away when you get outta school. They give you a little bit of time, so.

Interviewer: So when you get this job in archeology, do you have any sort of idea about if you want to save money or if you’re going to try to save money as you get your paychecks?

Derek: Yeah. I try to put it in the bank. (Laughter)

Interviewer: I mean is saving a priority for you to set aside any money?

Derek: Yeah. Yeah, you know, I – it’s hard ’cause I like to – I don’t like sitting around and so I like to go, you know, do whatever, even, you know, go walk around the mall or something. I don’t spend money all the time but, you know, the gas to get there costs money and stuff, but I like to save, you know, mostly.

Interviewer: Have you heard about people who have committed suicide because of their worry about debt?

Derek: Yeah. Yeah, you know, it’s – there’s always a better way out than that. It’s – you know, it’s – you don’t need to go to that extreme ever, I don’t think. So, yeah, it’s not – you hear about it all actually.

Interviewer: So what about people who can’t find a job that are running out of unemployment benefits? What are they gonna do?

Derek: I don’t know. Hopefully, something. I think, you know, if we had to resort to something like the CCC or something like in the – what was it? – the ’30s, something like that would be excellent and – I don’t know. I don’t know that anybody’s actually looked into that or, you know, the president has actually thought about that ____ _____ ______ _____.

[Crosstalk]

Interviewer: So what role does government have in trying to support people who –?

Derek: I’d like to think not too much, but I think that they should. You know, if they’re gonna – if they say that they’re gonna, I think they should help. But, you know, I like to think, you know, the less government involvement, you know, the better but if, you know, they’re saying – they’re giving hope to all these people that they’re gonna help them then they should help. But, you know –

Interviewer: If you had a bunch of money on credit cards and somebody came to you and said, “You can pay off that debt for half of what you owe but it’s gonna leave you with bad credit,” would you do that?

Derek: Probably not ’cause I feel like having good credit is something that’s been, you know, taught to me. You know, you have to have good credit, so I would – I don’t know. I wouldn’t go with having bad credit. (Laughter)

Interviewer: Have you ever been tempted to apply for credit for something that you wanted right now?

Derek: (Laughter) Yeah. Yeah, about one of the new Camaros. (Laughter) But, you know, it’s – you know, and we’re looking for a house and stuff, too, but we don’t want to – you know, we can’t get approved for, you know, something. You know, we don’t have the money to do it because, you know, we don’t have permanent jobs right now, so it’s – you know, it’s – there’s a lot that I want, but you can’t – you know, if you don’t have the money, you know –

Interviewer: How does not having the money make you feel?

Derek: You know, there’s always – you always want what you can’t have, you know. It’s frustrating but, you know, they get by. Maybe one day you’ll have it, you know. Maybe one day there’ll be something better.

Interviewer: Okay. So if somebody came up to you right now and said, “You know the house that you want? You can have it right now. You just have to sign right here.”

Derek: (Laughter) Have to read the paper. (Laughter)

Interviewer: Do you read contracts, honestly?

Derek: I start. (Laughter) And then I get bored with it, you know, and I figure they’re all probably mostly the same, but I probably should.

Interviewer: So how many credit cards do you have? One, two –?

Derek: Whew. I think one now.

Interviewer: One, okay. And have they ever raised your interest rate?

Derek: Yeah, I missed a payment on one that I had a long time ago and they completely – they raised it. I lost my introductory rate and I had to pay a really high like, you know, minimum payment and they had a fee that you had to pay if you miss it, too, so I learned my lesson. I – it wasn’t even that I didn’t have the money or anything. I just lost the bill on the corner on the kitchen table, you know, so yeah, that was – it was a mess. (Laughter)

Interviewer: Probably the last time you do that.

Derek: Yeah, yeah. Lesson learned. (Laughter)

Interviewer: Do you have a government-backed student loan?

Derek: I think so.

Interviewer: Is it – or is it a private student loan?

Derek: (Laughter) I think they’re government, the Stafford loans.

Interviewer: Mm-hmm.

Derek: Yeah.

Interviewer: Yeah. There’s been a whole lot of stuff in the press about foreclosure and people losing their homes and have you known anybody who’s lost their house?

Derek: Not personally. No, I haven’t. You know, I hear that foreclosures are the way to go if you’re gonna buy a house though. I’m not sure and – you know, how true it is or not, but yeah.

Interviewer: When you were growing up, was there ever any feeling of kind of economic stress or having to do without or “you can’t get that now?”

Derek: You know, my mom always said – I sound like Forest Gump. (Laughter) But, you know, “You gotta learn like the value of the dollar,” you know, and I think there’s not a lotta that going on right now, and I think parents will just buy their kids anything and, you know, you notice that they’re kind of all snots now, you know. (Laughter) They’re – the kids are mean and – you know, and you always have to do like the social studies classroom stuff, like you had to interview somebody from the Depression, you know, stuff like that. But, you know, nothing – you know, I didn’t really worry about it.

Interviewer: So when you interviewed somebody from the Depression, what did they say?

Derek: I interviewed my great-grandma and it – you know, it seems – from what she said, it sounds kinda like where we are now. You know, she wasn’t – they weren’t too bad. You know, they didn’t live in the city or anything so, you know, they didn’t have to sell apples on the streets and stuff but, you know, it sounded very similar to what’s going now and just hard to find jobs and stuff.

Interviewer: Do you have a checking account?

Derek: Yeah, I think so. (Laughter)

Interviewer: (Laughter) Okay. Maybe.

Derek: Yeah. Yeah, I have a checking or a savings. (Laughter)

Interviewer: Now usually – you know how opposites attract in a relationship?

Derek: Mm-hmm.

Interviewer: One person’s usually a saver and the other person’s usually the spender. Is that true in your relationship?

Derek: I – yeah, I think I might be more the spender. (Laughter)

Interviewer: Really.

Derek: Yeah.

Interviewer: What’s your vice?

Derek: Just – I don’t know. I just like to not sit at home. (Laughter)

Interviewer: I mean just do you feel that you spend to go do something or video games or –?

Derek: No, not – just going to do things, like just not being at home. You know, I don’t own too much to show for what I spend, I guess, but a lot of experiences, which is cool. I like – we like state trips, you know, weekends trips and stuff and, you know, they’re not that expensive so we try to do it on the cheap weekend.

Interviewer: You mentioned before just about benefits, about WIC and I think it’s now called SNAP actually.

Derek: Oh, is it?

Interviewer: Yeah.

Derek: (Laughter)

Interviewer: I don’t know who changed it from food stamps to SNAP. If you were – if you did have to go into a benefit program like that is that no problem? How does it make you feel? Is –?

Derek: I – you know, I was talking to my friends at work and stuff about it. I’m like, “Yeah, I’m a little embarrassed about it, you know.” But they’re like, “You know, you gotta do what you gotta do.” And, you know, I’m thinking if it’s out there you might as well take advantage of it. You know, there’s no – or you’re not being penalized for doing it at all, like I’m pretty sure that you don’t go under that ______. (Laughter) But, you know, so I don’t know how it all works exactly, but it’s – yeah.

Interviewer: It’s interesting. There are – some people have a big stigma about that.

Derek: Yeah. Yeah, it’s – you know, I mean I’m pretty sure I grew up on food stamps and a lotta my friends did, you know. You know, I don’t think – you know, we’re not too many – we’re not friends with too many rich kids or anything, so I think we all came from the same boat and – yeah, and – but you think, you know, you don’t want to – you think of a lotta dirty, you know, kinda people around food stamps and, you know, like drug dealers or something, you know, and just people taking advantage of the system and stuff. But, you know, it’s – you don’t want to be lumped into a group of people that – you know, that are taking advantage of it as opposed to people that are – you know, just ran into a hard time. You know, it’s very –

Interviewer: You mentioned when you were growing up you and other families were on food stamps.

Derek: (Laughter) Right. Yeah, so I was –

Interviewer: Did you know anybody that was taking advantage of it?

Derek: (Laughter) No, I don’t, but you hear about it, you know, so it’s – I mean I have no idea. Maybe somebody was. I have no idea. It’s weird. (Laughter)

Interviewer: It’s funny because, you know, I always hear those stories, too.

Derek: Uh-huh.

Interviewer: But it’s almost like it’s become an urban myth, you know?

Derek: Yeah, exactly. You don’t really – it’s, yeah, true.

Interviewer: Was there ever – did you ever feel embarrassed about the fact that ma had to _____ _____?

Derek: No, I don’t think I –

Interviewer: Just didn’t register.

Derek: Yeah and like that.

Interviewer: Yeah. Okay. I don’t think I have any more questions.

Derek: Cool.

Interviewer: So one – actually, I do.

Derek: Okay.

Interviewer: You’re 22?

Derek: Twenty-three.

Interviewer: Twenty-three. I was 22 when I got married, so –

Derek: Yeah.

Interviewer: So looking back on kids that are now 15, 16, 17 getting ready to go into college, what advice – from what you’ve learned about so far – credit, debt, money, student loans, whatever – what advice would you give yourself if you were going to talk to yourself when you were 17?

Derek: You know, apply for scholarships and stuff for school definitely. You know, the – you can go for as cheap as possible. You know, you gotta really apply yourself, but there’s help out there, you know, grants and scholarships and, you know, don’t get into credit cards. You know, probably stay from a car even if you can, you know, ’cause gas is expensive and you gotta pay insurance and all that. You know, if you can – you know, to have as, you know, a small amount of spending as possible, I think that would be great.

Interviewer: Before you went into archeology, did you think about how much – what those jobs paid or did you –?

Derek: Nope. (Laughter) No, I didn’t. I – you know, I wanted to – I started out thinking – you know, I was always interested in archeology and stuff but, you know, thinking like maybe I’ll be a – you know, a pilot or something and then I figured I wasn’t good enough at math or, you know, psychology and then I just kinda didn’t really like psychology. So I just went with my gut and went with archeology and, you know, I like it and I think that’s important but, you know, nobody ever really told you – like the high school counselors don’t tell you, you know, you’re not gonna make money doing archeology. You know, you gotta find a job that’s probably, you know, gonna make some money.

You know, a _____ _____ like, you know, nursing and stuff’s actually making a lotta money and the computer jobs are always pretty good and, you know, even entrepreneurial stuff. I think cities like Buffalo could benefit from that but, you know – and my wife and I talked about it and, you know, we were never told by our counselors, you know, “Go with something that’s gonna make money” or, you know, “This is what’s a hot, you know, kinda job right now.” I mean it’s mostly just, you know, go with what you want to do when you grow up, but that’s – I don’t think that’s necessarily how it is.

Interviewer: If an archeology job was open in Buffalo –

Derek: Oh, I would apply for it. (Laughter)

Interviewer: (Laughter) What’s the average salary for a job like that?

Derek: It’s not very high. I mean unless – there’s a lotta like federal government jobs and then, you know, I go on usajobs.gov a lot looking for them and they seem to be out Southwest and stuff, but they earn anywhere from like $50,000.00 to like in the 100 and something thousand, so there’s a huge scale but, you know – but you need your doctorate or whatever in there, so –

Interviewer: Do you think you could get a $50,000.00 archeology job in Buffalo?

Derek: No. No, there’s not –

Interviewer: What would it be, 20?

Derek: Yeah, 20, 30, you know, depending on how – you know, if you’re fulltime or seasonal. I mean there’s not too much fulltime here. You know, it’s – they call it shovel bumming. You know, you go where the jobs are, you know, and people that’ll just work all year long _____ _____ working here in – up here in the summer and they’ll wind up going down to, you know, Arizona or, you know, Colorado and stuff in the spring.

Interviewer: Would you consider doing that?

Derek: Well, if I wasn’t married and having a kid. (Laughter) But I would, yeah. It’s kind of a cool idea for me, you know, adventure. Yeah.

Interviewer: So let’s say that that job doesn’t show up in Buffalo. How do you feel about maybe having to set aside your dreaming in order to get some job just to pay the bills?

Derek: I – you know, you gotta do what you gotta do, you know. I haven’t ruled out going back to school for something else and it’s – I’m all right with it. Something might come up in the future and then I have the historic preservation that – you know, that – my higher education to fall back on, I guess. (Laughter) But yeah.

Interviewer: Okay. All right. Well, thank you very much.

Derek: Yeah.

Kevin in Roanoke, VA Talks About His Debt

Steve Rhode — Sun, 02 Aug 2009 10:49:36 +0000

From How to Get Out of Debt

Kevin and I met through Twitter and we made arrangements to meet up on my travels around the country. I’m @GetOutOfDebtGuy on Twitter.

On August 1, 2009 I had the pleasure of meeting Kevin, sitting down in a local coffee shop and talk about his debt. He was kind enough to share what it was like for him in hopes of helping others.

Kevin is still in the initial stages of dealing with his debt but you can hear the emotion, passion, anger and sadness in his voice. In his answer to Q18 you can hear him choke with emotion when he talks about his friend that has helped him to cope with the pain he’s been living through.

Q1 Do you know someone that has struggled with debt?

Q2 What’s your story, what happened to you?

Q3 Did you seek any assistance from anyone?

Q4 How did you feel when people turned you away from help?

Q5 How do you feel about going bankrupt?

Q6 People that have not lived through money troubles think that people that have are reckless, losers, or stupid. What do you have to say to those accusations?

Q7 Before you got into trouble would you have ever thought that it would be hard to get creditors to take your money or work with you to resolve your situation?

Q8 How would you have felt if your creditors had been willing to work with you on a plan you could meet?

Q9 Most people in debt don’t have a lump-sum payment to settle their debts so are creditor settlement offers a bit rediculous?

Q10 Do you think your debt would have been worth killing yourself over?

Q10

Q11 What do you think when you hear stories of people that kill themselves or their family over debt? Have you heard those stories?

Q11

Q12 Did turning to your religion provide you any comfort as you were seeking help or looking for answers?

Q12

Q13 Do you feel like you’ve been a victim in all of this?

Q13

Q14 What did you learn about trying to help others to make yourself feel better about your situation?

Q14

Q15 What has helped you to feel better about yourself in this mess?

Q15

Q16 How did you find your bankruptcy attorney?

Q16

Q17 How did you finally select your bankruptcy attorney?

Q17

Q18 What advice do you have for people that are living through money troubles right now?

Q18

Thank you so much Kevin for letting me record your thoughts and experiences as you live through this debt mess. My only lingering curiosity, what did the people in the coffee shop think we were doing with the equipment and headphones? LOL

Big hug to you Kevin. Stay safe and if you need me, you know how to reach me. And and lastly, thank you from the bottom of my heart for sharing your emotions and experience in hopes that through your words and our actions we can help at least one person that is suffering in silence with debt.

If you would like to leave a message for Kevin, please add it in the comments section of this question.

You can subscribe to my series of debt interviews through iTunes by clicking here.

@GetOutOfDebtGuy

Transcript

Q1 Do you know someone that has struggled with debt?
A1 Kevin: Get a mirror? Yeah, let me look into one real quick. Yeah, me. It’s horrid.

Interviewer: Well how – tell me how it feels because people are coming – I remember how I felt but how’s it feel for you?

Kevin: Well, first, in my case, depression, astonishment. You just can’t believe what’s happening to you is really going on. Disbelief and it gets to extremes, suicidal, with me homicidal. There were people, yeah, you do lay in bed and contemplate their demise. And nobody out there that you thought cared about you, worried about you, was there behind you. You turn around, they nobody got your back. You know and that again, it just makes it worse. The people and the ways that you get into bankruptcy is a trap. You know the system is set up – it’s like quicksand. And if you’re unfortunate enough to put your foot in there, you’re gone.

Q2 What’s your story, what happened to you?
A2 A girl, all right? And I use the term now, gold-digger. I mean it was my mistake not seeing that to begin with. All the signs was there and I didn’t see it. I come to Virginia not a penny in debt. The only bill I had was the mortgage and I had less than a year left. Paid that off, no problem. And to make her happy, anything she wanted, she got.

That included me getting more credit cards. That included me – when they tried to repossess her van, I went and got a signature loan and paid it off for her okay? A signature loan, no collateral, no nothing. Here baby, I love you. They’ll leave you alone now. And when you think your life’s going good, she met a millionaire, a millionaire and now I feel sorry for him. Three days after she met him she left me for him.

All right, it’s fine for the first month then the economy starts taking its dump. Not only did I lose her income, then I got laid off because the first company was being sold to some Brits. Then the second company I worked for did layoffs because they weren’t publishing enough books. So now you’re unemployed, hosed, when you look at your financial situation, you’re depressed, and I – before I feel behind I went to Barclays. I went to Juniper Bank.

I went to these people and said, “Hey, we gotta reduce these interest rates. I gotta refinance. I gotta do something. I cannot keep these payments up.” And they blatantly over the phone told me, “Oh, you’re not three payments behind. We’re not gonna reduce your interest rates. We’re not gonna refinance nothing. Until you’re behind, we’re not gonna touch it.”

Now anger kicks in. I went to CitiFinancial and said, “Hey, I need,” an explained the situation to em. All I wanted was $500.00 to try to reorganize myself, shuffle some of my bills around, get some of the – and they said no. even though up that point, not only had I been making minimum – I’d been, you know CitiFinancial gives you the monthly statements, I was paying almost three payments at once. Instead of paying 220, I was paying $700.00 whacks; well ahead of schedule. And they said no to $500.00.

At that point I lost it. A weird thing is I started seeking out people – I wasn’t aware of it but looking back now, I was seeking out people in worse shape than I was. And I found people that – I found a lady from Katrina that wanted to go to school and no one was gonna cosign her loan. Stupid me cosigned a loan for her.

There was a girl that had never found her father before, never known her father. Well I was born a bastard and put up for adoption and I found my mother. And I knew what it was like to find that person you never – so I found her father for her, took him to her and long story short, ended up moving her from Ohio to Tennessee all at my expense. I thought it was making me feel better but it was only getting me worse in debt. I was spending all this money – well, the chick that went to college has never paid a penny back. Now I’m being sued for that.

The people that I did the signature loan on the van, they’re suing me; trying to garnish my wages. All the credit card companies – you want me three months behind? Fine, all right, well now I’m like six months behind and now they wanna work with me after the government bails them out with billions, they still wanna work with you until you are in the toilet and flushed and enough is enough. They can all kiss my rosy red one for all I’m concerned.

Q3 Did you seek any assistance from anyone?
A3 All right, it was because of the depression. It was because of being taken by a gold-digger and seeing what I was doing. I went there and I got laughed at. All right, yes. Three professionals, every one of them suggesting me to somebody else. And to them it was all to them like a humorous story. Well you need help but I can’t help you. Well you need help but I can’t help you.

Q4 How did you feel when people turned you away from help?
A4 That’s when the suicidal and the homicidal tendencies come out. I got a new job. It’s with the government, which will make you angrier even still at points, and I refocused. I’m a grandfather. Grandkid number seven is on the way and I now focus on building treasure chests for my grandkids, wooden treasure chests. And I got the idea from my uncle, who gave me a gift a long time ago and my grandfather, who made a gun rack and I combined the two and I’m making treasure chests.

If the professionals wanna laugh at me, laugh. That’s fine. I found my niche okay? So psychologically I’m gonna be all right. Financially, I talked to three bankruptcy lawyers and one of them is gonna try to help me get _______. And we’re just gonna dump it all and tell all those gold-diggers out there, sorry, you burned the last wick. I’m not gonna be there for ya. Tell those credit card companies you wanna throw all those fees out there. You don’t wanna work with me, fine, now you can all eat it.

Q5 How do you feel about going bankrupt?
A5 Kevin: Good. It pisses me off. One, it’s gonna be 10 years. Okay, I think that 10 year clause is stupid because it’s – you’re filing bankruptcy, you can’t do it again for another 7 or 10 years or whatever it is. So why is it when someone files bankruptcy, that’s the number one thing they hold against ya?

It’s like man, if you filed bankruptcy, you oughta be jumping to give this person credit again or to cut him a break but it’s not. It’s gonna hold me. I won’t be able to change apartments because they do credit checks. I won’t be able – some of my government jobs, I know they’re gonna do background and financial background. They’re gonna see a bankruptcy. That’s gonna – so I’m ticked off because even though the system is put there to help you, it’s gonna cripple me until that comes off.

Interviewer: Well let me tell you something that you might not know. That if you do a Chapter 7 bankruptcy, you know where you just, complete wipe-out of the debt.

Kevin: Right.

Interviewer: Probably which is what you’re gonna do.

Kevin: Right.

Interviewer: You will get credit offers the very next day. You will be able to get a credit card, a secured card. You put up a deposit, okay?

Kevin: Right, that’s – yeah, yeah.

Interviewer: And that will immediately start to rebuild your credit. Your credit score will go up. And as far as like security clearances and background checks you’re fine. If you had a lot of open debt and it wasn’t addressed, then that would be a problem but so many people are going bankrupt these days that you don’t need to worry about that.

Q6 People that have not lived through money troubles think that people that have are reckless, losers, or stupid. What do you have to say to those accusations?
A6 Kevin: One day, and I hope it doesn’t happen to em. You walk into a dark room and all of a sudden a noose drops out of the ceiling and instead of the guy next to you, it goes around your neck. You didn’t have control where that noose dropped. There was no light. You didn’t see it coming. And when it drops and it gets you, remember you’re in a room by yourself and it’s dark and now I feel sorry for you.

Okay like I said, I came out here with zero debt, no intention to hurt, harm or steal from anybody, take from anybody or anything. It just happened. No control over it. And now my – this rollercoaster ride is going down and unfortunately the trap bottom is at the bottom. There is no curve back up.

Q7 Before you got into trouble would you have ever thought that it would be hard to get creditors to take your money or work with you to resolve your situation?
A7 Kevin: I was astonished at the lack of any cooperation between me and the lenders. Here’s an example. It was CitiFinancial, I went to them for help the first time they said no. Fine, so I missed their 4 or 5 payments. I go in their office. I am at the bottom. I am crying in their office. I’m shaking okay?

The lady sees what kinda condition I’m in and she says, “Tell you what, this is what we’re gonna do. We’re gonna give you, we’re gonna refinance your loan, start you over. We’re gonna give you $99.00 cash, all right, you can take the check right now, right now.” Now if someone has no money and somebody has no tomorrow and then somebody comes up to you and says, “Here, I’ll give you $99.00 and we’ll refinance your loan.” What do you do? Okay, stupid me, I took the $99.00, refinanced my loan and now I just watch this giant interest pops up for going from X amount of dollars, I just added 20 more percent to it. But I got 99 bucks out of it. That’s a scam!

Q8 How would you have felt if your creditors had been willing to work with you on a plan you could meet?
A8 Kevin: I woulda worked! I would have done it. Instead, I look on there and I get a late month interest fee. I get interest on interest fees. I get nasty-ass phone calls. My cell phone was ringing – I had to increase the minutes on my cell phone because of all the bill collectors calling. But when you talk to em and you tell em what’s going on, they don’t wanna work with you until you’re beyond saving.

Now, when they all realize, okay, this guy is 8 and 9 months behind, now all of a sudden their lawyers, lawyers, lawyers, lawyers, are offering deals to you. “Well I tell you what, you pay us this little – you know you pay 40% off or 60% of the balance and we’ll call it good.” You’re not calling it good, you’re gonna take the credit card away; you know which is fine at that point. But it’s done in one bulk payment okay? So instead of paying us 30 or $40.00 over the next – if you pay this – well why didn’t you do that in the first place?

Q9 Most people in debt don’t have a lump-sum payment to settle their debts so are creditor settlement offers a bit rediculous?
A9 Kevin: You’re right. And when you talk to a bankruptcy lawyer, he’ll flat out tell you, yeah, there is that option. God forbid if they break it into three payments and you miss one of those payments. God forbid because the entire balance then comes back. See they don’t tell you that through the credit card company. “We’re gonna allow you a last chance ditch effort to clear off your – here’s $1,000.00 broke it up into 3 payments. You make that, all is well.” And again, you miss or short on one of those, you’re hosed.

Q10 Do you think your debt would have been worth killing yourself over?
A10 No, for me, no. All right, I used to think I’ve seen all of the United States. I’ve got grandkids. I’ve seen my grandkids. I’ve had a damn good life. I could, and it was rational at the time, I could get it over with and not feel bad about it. Okay? But because I took that extra minute one time to really think about this and think all right, it’s 10 years.

You know it’s gonna be on my record, no, it’s not worth it. Fight one more day. There’s a lot of doors in that dark room. Keep reaching around. One of em will open and one of em will have a light in it. And I caution, it’s a whole lot of doors in there you can open up and there’s gonna be big, bad, nasty things behind em. Then shut the door.

Q11 What do you think when you hear stories of people that kill themselves or their family over debt? Have you heard those stories?
A11 All the time, yeah. Professional sports people do it, distraught – yeah, that happens all the time. I live very close to the Virginia Tech where the killing happened and that was over boys and girl routine. I didn’t ever understand or comprehend why the guy wanted to take out a group of people. If you were mad at the one girl, fine, take the one girl and yourself out and be done with it. Why did you have to do 31 other people?

When you get this angry, you gotta remember, don’t take it out on society. All right then the people here in this coffee shop with us right now, not one of em have ever done anything to hurt me and never will do anything to hurt me. And if I walk outside and trip, probably some – one of these people would pick me up. So why would I wanna bring in a gun and level everybody here in this coffee shop? Okay? You gotta keep a little bit of realism in your head all right? And remember that I’m not a very much of a religious man anymore. I have my own personal beliefs and you gotta find that personal belief in there wherever it dwells at and grasp a hold of it and don’t let go and don’t take it out on the other guy.

Q12 Did turning to your religion provide you any comfort as you were seeking help or looking for answers?
A12 No because I went to a minister for help. I will not mention his name but I went to a minister for help. All he told me was, “You need to get a better job.” Duh! Two years ago I was running my own computer business and now I’m sweeping floors. Duh!

Six months later that minister tried to commit suicide over financial matters and stabbed himself 21 times and lived. Now it wasn’t that man’s time to go okay? I turned to the wrong person but I did try the spiritual thing. It didn’t work for me and obviously his own advice didn’t work for him.

Q13 Do you feel like you’ve been a victim in all of this?
A13 I was, it started as a victim okay? Good intentions and we’ve all heard the road of good intentions where that leads. I try to turn my life into something more even than what it used to be. And I got sucked into something I wasn’t expecting. Now after the initial victimization, then like I said, it became self-destructive because I knew where I was at.

The only way to make me feel better was to find somebody worse off. And here I help all these people, not using the best judgment, throwing money out like it was candy at a parade. None of em are getting the money back, which is fine, I don’t care. I didn’t give em the money really thinking I was gonna get it all back. Part of it woulda been nice.

Q14 What did you learn about trying to help others to make yourself feel better about your situation?
A14 And that’s self-destructive. You know I’ve got a friend, Deborah. I will mention her name, in Pennsylvania. When I – now when I feel like I wanna give somebody money or something like that, I have to call her first and she has the school of no. And I call her on the phone knowing what she’s gonna say but it is humorous. Deborah, so and so wants to borrow 50 bucks for electric bill. And she’ll say, “No Kevin, say no, no, no.” And if I say no, I get a good grade for the day cause it’s the school of no. So you come up with these silly little things that get you day-to-day and there are people out there that will goof around with you and won’t just cry for you. Deborah, thank God Deborah’s out there. She makes me giggle and laugh. And before I do something stupid, I have her on speed-dial.

Q15 What has helped you to feel better about yourself in this mess?
A15 Up until a couple months ago I was still doing really stupid things. And I saw my grandfather’s gun rack that he made back in the ‘60s. So I started making treasure chests made out of wood for my grandkids. My granddad’s been dead since the ‘70s and it was something to refocus on and I make these treasure chests. And it’s gonna be all their Christmas’s this Christmas.

But I – but you’re cutting the wood, you’re sanding the wood, you’re painting the wood. You’re dreaming. There’s no plans on any of these treasure chests. They all come out of this scary little head of mine. And there’s – there’s gonna be a treasure in each treasure in that the fact that once all the treasure chests ever come together, there’ll be a message to my grandkids from granddad. The only way for them to get that message to get all treasure chests together.

And because it sounds fun, it’s interesting, it’s gonna be memorable, it’s years down the line. That’s what’s got me away from the depression, the hate, the desperation. It’s given me something to focus on. God, I don’t know what’s gonna happen after Christmas. What I’m banking on is that the bankruptcy’s over by Christmas. Okay so I kinda do a – all right I chose the bankruptcy. I still pay 300 and some odd dollars left for that but once that’s paid for, the treasure chest will hopefully hold me to Christmas.

And come Christmas morning, I wanna be around my grandkids. But I’m gonna be giggling okay cause I know what’s going on back wherever they’re at opening those treasure chests from granddad. And then it becomes a waiting game. How long will it take for them to figure out the treasure in the treasure? And by then I will hopefully find something else that will keep me entertained, keep me out of trouble. Hopefully by then a few lights have turned on, a window or door was open and you start over.

Q16 How did you find your bankruptcy attorney?
A16 Advertising pays you know. You check your mail day after day and there’s bill, bill, bill, bill, bill and there’s this flyer, you know bankruptcy. In today’s economy, everybody’s screaming for financial help. I have XM Radio in my truck. And every other commercial is we’re gonna help you get outta debt. We’re gonna help you do that. Then right after that you hear bankruptcy lawyer, everything is bankruptcy and finance nowadays.

So finding a bankruptcy lawyer wasn’t hard. The hard part was talking to 2 or 3 of em because I didn’t have a lot of money. The first one I talked to basically told me the whole thing was gonna cost about $2,800.00 between lawyer’s fees and everything else. The second one I talked to says, “It’s gonna cost you 700 to start. If we do this it’s 1,100. If we do this it’s 1,800. If we do this, it’s 2,000.

They actually showed me there are different options. We don’t have to shoot for the moon over here. So the second one didn’t scare me off. I’m hoping for the cheapest of course, but at least my eyes are open that it may cost me more. So yeah, I shopped around. And it’s again, you go in and you tell somebody else your story and it rips you a new one every time you do, even to the bankruptcy lawyer. This ain’t easy doing this.

Q17 How did you finally select your bankruptcy attorney?
A17 This is the most disorganized lawyer in the planet. I walked in – I was amused really. I think it was more comical because one, it was price. He did, he started off at least the lowest price but he did give a little information about the – but I was really amused because phone was ringing and nobody was answering it. He went to go print out the paperwork that I needed to fill out and he couldn’t find it on the computer. Then the printer didn’t have either ink or paper in it and the secretary is blaming him. I’m whoa – I thought the secretary was supposed to – anyway, it was so comical it was actually, it was kinda like this is what I need.

Okay this guy fits into my lifestyle. The other people over there – I’m nothing more than a file folder to them okay? Even though they had everything printed off in a pretty office and the Italian leather furniture, this guy’s real. This secretary is real. When I get in there he’ll probably fight for me more realistically where the other guy’s gonna go in there, do his generic motions, in and out. I might get what I want and I might not.

Q18 What advice do you have for people that are living through money troubles right now?
A18 Kevin: Stick with it. I mean it’s – I know a lot of people have a lot bigger debt than I do and there’s probably people out there that have less debt than I do. But it doesn’t matter the dollar amount. We’re all equal. Okay, if you can’t afford that $10.00 a month payment or you can’t afford $100,000.00 a month payment, whatever it is, when you come to your end of your rope, it’s your end of your rope. Just don’t let go of the rope. Okay, sooner or later you’ll be able to climb back out or someone’s gonna pull you up. Don’t do – I did enough stupid stuff and just got me in more trouble. Don’t do stupid. Okay, find you a Deborah in Pennsylvania. Stick with it.

Interviewer: She means a lot to you doesn’t she?

Kevin: Actually Deborah is one of the few – I don’t talk to her every day. She’s just one of the few that will make you laugh. Maybe that’s what everybody needs; you just need that one laugh a day.

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