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Speaker 1: Welcome to Out of Money. I'm Joel, and today I'm

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Speaker 1: talking about what most people get wrong about paying off

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Speaker 1: debt with Johanna Samara. Okay, so I could rattle off

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Speaker 1: the headline numbers, student loan balance is climbing, credit card

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Speaker 1: debt hitting new highs year after year after year, new

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Speaker 1: forms of borrowing right like buy now, pay later. They

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Speaker 1: kind of seem to appear out of thin air, which

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Speaker 1: is a testament to just how creative the financial industry

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Speaker 1: can be. We are a nation steeped in debt, and

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Speaker 1: it's become so normal that we barely question it anymore.

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Speaker 1: But the weight of the debt we've accrued as a

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Speaker 1: society that is very real, and it's very real on

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Speaker 1: an individual level. And then digging your way out of

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Speaker 1: a debt hole, well it's a lot harder than it sounds.

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Speaker 1: And in fact, studies show that the biggest barriers to

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Speaker 1: getting help they're not just financial, they're personal. There's this

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Speaker 1: lack of confidence or know how, paired with feelings of embarrassment, shame,

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Speaker 1: even moral failure. And that is why I'm excited for

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Speaker 1: this conversation today. Johanna Samara has spent two decades on

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Speaker 1: the front lines of the debt world, the underbelly as

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Speaker 1: it were, and she's currently the vice president of debt

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Speaker 1: Resolution at Money Management International. So, Johanna, I'm so glad

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Speaker 1: to have you along. Thanks for joining me today.

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Speaker 2: Thanks for having me of course.

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Speaker 1: Okay, first question that I ask everyone who comes on

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Speaker 1: is what they like to suploor? John, We call it

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Speaker 1: the craft beer equivalent. What is it that you like

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Speaker 1: to spend a lot of money on even though while

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Speaker 1: you're being smart, you're doing you're investing in saving for

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Speaker 1: your future.

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Speaker 3: So it's definitely scuba diving. So it's gear classes to

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Speaker 3: make sure that I'm as safe as possible when I'm

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Speaker 3: in the water, especially since a lot of what I

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Speaker 3: do is compression diving here on the coast of North Carolina.

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Speaker 1: What's decompression diving is that is that you're is that

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Speaker 1: like a therapeutic thing. You're diving makes you feel like

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Speaker 1: decompresses takes all the stress away.

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Speaker 3: It does do that for me, but it is you're

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Speaker 3: diving at very deep deaths depths, and so when you

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Speaker 3: do that, you on board a lot of nitrogen, So

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Speaker 3: you got to make sure that you off gas that

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Speaker 3: nitrogen and making sure that you decompressed before you come up,

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Speaker 3: because if not, you could I mean, it can potentially

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Speaker 3: lead to death, but it typically leads to decompression, sickness

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Speaker 3: and things like that.

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Speaker 1: Okay have you have you ever had that before?

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Speaker 2: I have not?

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Speaker 1: Okay, good, but yes it is bad.

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Speaker 2: It can end in death.

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Speaker 1: So okay, all right. I've always been interested in scuba diving,

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Speaker 1: have never done it, but I think maybe this is

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Speaker 1: the cake in the pants. I need to go give

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Speaker 1: it a shot.

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Speaker 3: Absolutely, it's great. Just go do a triscuba class if

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Speaker 3: nothing else.

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Speaker 1: Okay, all right. How hard is it to get certified?

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Speaker 1: By the way, is that is that a lengthy? Processors

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Speaker 1: are pretty easy.

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Speaker 2: It'll take you a couple of weeks.

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Speaker 3: So you'll do some online training, you'll do some classroom,

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Speaker 3: you'll do some pool sessions, and then they'll take you

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Speaker 3: out to an open body of water to do your

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Speaker 3: certification dives.

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Speaker 1: Okay, cool, all right, maybe that'll be my next hobby.

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Speaker 2: Do it, you'll love it.

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Speaker 1: Okay, all right, let's talk about debt. I'm curious. Maybe

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Speaker 1: let's start out with an overview, like what is the

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Speaker 1: state of America's relationship to debt? In twenty twenty six,

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Speaker 1: and how would you say, maybe that it's changed over time.

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Speaker 3: So I think in twenty twenty six, across the country,

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Speaker 3: I mean, millions of house holds are you know, under

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Speaker 3: financial pressure, pressure rising costs just for essentials, housing, food, healthcare, transportation,

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Speaker 3: and it's really outpaced income growth for many families. So

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Speaker 3: a lot of families are having to rely on credit

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Speaker 3: cards to cover everyday needs. It's not just a result

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Speaker 3: of you know, unexpected emergencies anymore.

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Speaker 2: It's really become a tool for survival.

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Speaker 1: Do you and how has that changed from maybe ten

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Speaker 1: years ago? Do you feel like pre COVID, pre recent

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Speaker 1: bount of inflation, it felt like there were more lifestyle

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Speaker 1: choice in just like poor habits that led people into

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Speaker 1: the doors of MMI. And now it's more oh man

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Speaker 1: had to take on this debt out of necessity just

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Speaker 1: to make ends meet. Like how things changed in the

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Speaker 1: last ten years.

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Speaker 3: So I think in the last ten years it's definitely

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Speaker 3: more geared to I have to have these credit cards

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Speaker 3: for everyday needs. Whereas previously, even though you know, consumers,

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Speaker 3: it was typically one thing could throw them off track,

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Speaker 3: but they were doing things like you know, going on

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Speaker 3: vacation and having fun and they were able to do

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Speaker 3: more activities, whereas now it's really just about groceries and

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Speaker 3: medical bills and what they need to cover it.

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Speaker 1: Okay, And do you still see it? Do you think

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Speaker 1: like a lack of financial literacy is continues to be

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Speaker 1: part of the problem or do you find that people

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Speaker 1: who come in have a fair amount of knowledge about

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Speaker 1: personal finance that they just don't have the income to

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Speaker 1: support the a like the lifestyle that they've and I

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Speaker 1: don't know, is their lifestyle excessive? Is like what is

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Speaker 1: happening here? Because it does feel like there's as Americans too,

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Speaker 1: we have a unique problem compared to maybe much of

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Speaker 1: the rest of the world.

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Speaker 3: Right, Yeah, I mean I think that it's definitely a

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Speaker 3: unique thing. And I don't think it's about poor decisions,

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Speaker 3: but it is definitely about that financial counseling piece of it.

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Speaker 2: A lot of people, I mean, they don't teach it

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Speaker 2: in high school.

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Speaker 3: Right you can learn about homeg and how to cook,

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Speaker 3: or you know, maybe balance your checkbook if you're lucky,

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Speaker 3: but for the most part, they don't teach you about

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Speaker 3: how to balance your budget. You know, how much to say,

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Speaker 3: how to live within your means or any of that,

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Speaker 3: and so people are just trying to trying to survive.

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Speaker 1: Now really, yeah, I was just talking with my uncle

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Speaker 1: on the phone last night and he's had his own

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Speaker 1: business for like thirty years. He's getting ready to retire,

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Speaker 1: and like only in the past few years has he started.

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Speaker 1: We've had conversations about investing for his retirement. And it's like,

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Speaker 1: I think that's kind of more. He's not abnormal, right,

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Speaker 1: Like that is a normal occurrence in this country, that

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Speaker 1: that's just not on people's radar, it's not of their

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Speaker 1: minds until oh man, that's just a few years away.

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Speaker 1: I guess I better started thinking about this. And the

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Speaker 1: same is true with a whole lot of the personal

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Speaker 1: finance topics that we cover here on How to Money,

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Speaker 1: I want to start off by talking about, like how

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Speaker 1: a debt goes to collections? How does that happen? Can

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Speaker 1: you give me make like the Schoolhouse Rock overview version?

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Speaker 1: You know, I'm just a bill, Like, I'm just a debt.

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Speaker 1: How do I what happens to me?

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Speaker 2: Yeah?

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Speaker 3: So what really happens is when a consumer stops making

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Speaker 3: their payments, the account doesn't immediately go to collections. Most

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Speaker 3: of the time, creditors try to wait for several months

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Speaker 3: to collect internally with reminders and statements, maybe some phone calls,

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Speaker 3: and usually somewhere in the sixty to probably one hundred

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Speaker 3: and eighty days past to the creditor has to make

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Speaker 3: a decision, you know, do they can keep trying to

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Speaker 3: do it internally or do they send.

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Speaker 2: It out to a collection agency.

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Speaker 3: It becomes very costly for them either way, So that's

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Speaker 3: typically what they're looking to do, and a lot of

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Speaker 3: times they're going to send it, typically to a contingency agency.

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Speaker 2: And we can get.

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Speaker 3: More into that, but that's really a collection agency that

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Speaker 3: collects on behalf of the creditor and then eventually after

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Speaker 3: all of those efforts fail, if they do, then they

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Speaker 3: go ahead and sell of that debt to a debt purchaser.

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Speaker 1: Okay, so the debt collection agency, how come let's say,

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Speaker 1: maybe give an example, why is it that the original

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Speaker 1: creditor doesn't go after collecting the debt on their own?

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Speaker 1: And I guess maybe sometimes they do for a period

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Speaker 1: of time, and then they say, well, this isn't our specialty,

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Speaker 1: so we're passing it on to the company who this

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Speaker 1: is what they eat, sleep, and breathe.

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Speaker 2: Right exactly.

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Speaker 3: So internal collections become costly or ineffective because people, you know,

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Speaker 3: may screen out their phone number or they have to

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Speaker 3: write off the debt, and so they have specialized collectors

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Speaker 3: that have better tools and systems, and that's all that

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Speaker 3: they focus on, you know, And so it's for them,

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Speaker 3: it's just a financial and operational decision once the debt

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Speaker 3: reaches a certain age, and each creditor has their own

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Speaker 3: matrix of when they send it out and where they

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Speaker 3: place those accounts as well.

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Speaker 1: Okay, so before so you work for Money Management International.

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Speaker 1: I said that at the beginning. Money Management International is

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Speaker 1: a is a nonprofit entity and I love the mission

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Speaker 1: and we can talk more about that later. But you

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Speaker 1: were working for a for profit debt collection agency before

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Speaker 1: you joined MMI. Those are different animals. So can you

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Speaker 1: kind of maybe outline the differences between a nonprofit and

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Speaker 1: a for profit agency?

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Speaker 2: Oh?

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Speaker 3: Yeah, absolutely, there's quite a few significant differences, and I

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Speaker 3: think that first and foremost is really about you know,

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Speaker 3: MMI's mission and how do we give people financial counseling

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Speaker 3: and put them in the solution. In the for profit industry,

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Speaker 3: that's really all that they have for the consumer, and

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Speaker 3: the consumer may not need that. Maybe they need just

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Speaker 3: to help with their budget, or maybe they could do

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Speaker 3: it on their own and they just need to talk

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Speaker 3: to somebody and figure that piece of it out. For us,

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Speaker 3: you know, we really want to keep clients current with

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Speaker 3: their creditors if we can, and so we do have

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Speaker 3: different solutions available other than just settlement, like our debt

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Speaker 3: management plans, but our consumers that are in our debt

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Speaker 3: settlement our debt resolution program are significantly different. Those are

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Speaker 3: people that their accounts have typically already charged off, things

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Speaker 3: are happening with their accounts. So it's really about meeting

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Speaker 3: the consumer and getting them in the right program that

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Speaker 3: meets their needs. And maybe none of that even meets

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Speaker 3: their needs. What maybe what they really need is housing,

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Speaker 3: counseling or something different, and so we'll put them down

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Speaker 3: that path as well. So there's a lot of different

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Speaker 3: paths that a consumer can take, unfortunately in the for

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Speaker 3: profit industry, and that's all the only option that they

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Speaker 3: really have available. And so it's all about you know,

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Speaker 3: marketing and getting people in the funnel and pitching them

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Speaker 3: on that that settlement program.

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Speaker 1: So everything's nailed to them because they're a hammer, and

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Speaker 1: MMI is like, actually, you might benefit from counseling or

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Speaker 1: a budgeting class instead of like a full on debt

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Speaker 1: management plan, and so you're able to be a little

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Speaker 1: more like funnel people into the places where they're going

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Speaker 1: to get the best help.

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Speaker 3: Right, Absolutely, And there's several things that go along with that,

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Speaker 3: especially if a consumer is entering a settlement plan and

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Speaker 3: their current with all of their accounts to settle the debt,

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Speaker 3: it really needs to be passed due. And the for

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Speaker 3: profit industry, you know, typically a consumer is going to

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Speaker 3: take a huge hit to their credit, and so we

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Speaker 3: try to keep a consumer.

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Speaker 2: Away from that.

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Speaker 3: And that's why we have those debt management plans, is

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Speaker 3: if we can keep a consumer current on their debt

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Speaker 3: and give them just a better predictable, structured monthly payment

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Speaker 3: with maybe some concessions from their creditors with a lower

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Speaker 3: interest rate, we're going to to do that and not

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Speaker 3: let that account charge off or take that hit to

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Speaker 3: their credit.

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Speaker 2: It's really our last resort.

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Speaker 3: Alternative for our consumers. So yeah, it's definitely a very

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Speaker 3: different program as well as.

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Speaker 2: The fees alone.

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Speaker 3: I mean that the fees alone in the for profit industry,

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Speaker 3: typically they're going to charge about twenty five percent of

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Speaker 3: the enrolled debt. For US, we are debt resolution program.

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Speaker 3: Our fees are really based on our debt management plan fees.

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Speaker 1: So talk about that is that And I know that

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Speaker 1: at least in the past, some of those for profit

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Speaker 1: debt collection agencies or debt you know, the effort to

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Speaker 1: help people in a for profit model, often it's been

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Speaker 1: an upfront fee charged at times, Right, But I guess

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Speaker 1: is that illegal and at this point in time and

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Speaker 1: is that something that still happens, Like how rarey should

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Speaker 1: people be of these for profit firms?

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Speaker 3: Yeah, So any firm other than a law firm that

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Speaker 3: wants to charge you an upfront fee for settlement their

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Speaker 3: settlement program, then that is a huge red flag that

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Speaker 3: they shouldn't be doing that. So there were several years

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Speaker 3: ago that the FDC came in and settlement companies can

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Speaker 3: no longer charge an upfront fee. They can only charge

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Speaker 3: the fee at the time of settlement after that first

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Speaker 3: payment clears to the creditor, but they can they can

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Speaker 3: take that fee from your account immediately as that first

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Speaker 3: payment clears. You may have a settlement the last thirty

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Speaker 3: six months, but they're going to take that entire fee.

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Speaker 3: Let's say that's a ten thousand dollars account, so that

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Speaker 3: twenty five hundred dollars fee they're going to take immediately,

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Speaker 3: whether you finish that settlement or not. So yeah, a

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Speaker 3: huge red flag. Don't enroll in a settlement company. There

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Speaker 3: are attorney models that do charge some upfront fees because

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Speaker 3: they can do it with the smoke and mirrors of

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Speaker 3: an attorney model. And maybe that's not the correct verbiage

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Speaker 3: to really use, but they can do it based on

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Speaker 3: they are an attorney, and so they're getting they're using

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Speaker 3: the attorney exemption to get around the settlement laws that

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Speaker 3: are out there.

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Speaker 1: Okay, as humans, I think it's really easy for us

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Speaker 1: to stick our heads in the sand about a lot

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Speaker 1: of things in life, right and just kind of keep

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Speaker 1: marching on. And I think the truth that's true of

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Speaker 1: debt issues as well. It's like, well, maybe I'm just

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Speaker 1: going to keep heading in the same direction and just

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Speaker 1: hope that things magically better. Maybe I get a raise

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Speaker 1: at work and my income increases enough where I can

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Speaker 1: start making a debt in this debt, But how do

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Speaker 1: how do individuals compound maybe their own debt problems by

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Speaker 1: taking that approach so.

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Speaker 3: They can continue I mean, obviously that's going to continue

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Speaker 3: to compound their their issues. But I don't think anymore

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Speaker 3: that the consumers are really thinking that way. They're just

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Speaker 3: like I said earlier, they're just trying to survive. But

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Speaker 3: they do kind of put their head in the sand

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Speaker 3: and they don't want to talk to anybody because there

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Speaker 3: is that stigma against you know, debt is bad and

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Speaker 3: they don't want to talk to their friends or family

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Speaker 3: about it, and so there's an embarrassment that goes along

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Speaker 3: with that and not being able to pay your your

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Speaker 3: bills or whatever. That. But that's why companies like ours

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Speaker 3: have been around for so long, is you know, we

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Speaker 3: can be that judgment free zone that you can talk

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Speaker 3: to and we can walk you through what needs to happen.

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Speaker 3: We can walk you through financial counseling, get you know,

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Speaker 3: talk to your creditors on your behalf and really be

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Speaker 3: there for you and hold your hand through that process.

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Speaker 3: So people should know that they're not alone in it.

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Speaker 1: Yeah. Yeah, it's funny that they don't want to tell

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Speaker 1: their friends and family who are probably also dealing with

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Speaker 1: similar issues, And I think there's that sort of stigma

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Speaker 1: that people feel about their situation when when you look

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Speaker 1: at the statistics and the reality of what's happening in

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Speaker 1: America as a whole, even people who make good money

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Speaker 1: often find themselves tied up in boatloads of debt. I'm

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Speaker 1: curious to like you talked about, how so if a

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Speaker 1: debt is passed to sometimes there are more options. Does

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Speaker 1: it help to me more proactive when you owe a

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Speaker 1: debt that you can't pay to call the firm that

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Speaker 1: you owe, the company that the credit card company, the hospital,

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Speaker 1: wherever you owe this debt before they can call you.

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Speaker 1: Or is it a better idea sometimes to wait and

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Speaker 1: let the problem compound in order to get a better

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Speaker 1: deal or resolution.

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Speaker 3: So that kind of depends on the delinquency. If you're

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Speaker 3: current with your with your accounts and you're just not

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Speaker 3: able to pay them, talk to you to you know,

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Speaker 3: your your bank, especially the original creditors. A lot of

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Speaker 3: them have their own internal hardship programs, or they work

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Speaker 3: with companies like MMI and they they'll send you over

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Speaker 3: to us and we'll do a counseling session with you

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Speaker 3: and walk you through that and like I said, we

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Speaker 3: do work with a lot of the major creditors where

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Speaker 3: we can get better interest rates, get you on a plan,

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Speaker 3: get your your budget really organized, see where you could

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Speaker 3: cut costs. That type of thing there are, and this

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Speaker 3: is probably some of the issue with the for profit

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Speaker 3: industry is like.

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Speaker 2: You have to do a strategic default. You have to

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Speaker 2: be passed you to settle your.

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Speaker 3: Accounts, and the same with with a nonprofit settlement program.

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Speaker 3: If we're going to settle your debt, then you have

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Speaker 3: to be pass due. But the difference is we don't

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Speaker 3: tell you to go past do We're never going to

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Speaker 3: tell a consumer to stop paying their debt. Consumers come

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Speaker 3: to us and they've already stopped paying their debt and

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Speaker 3: the payment on their DMP program would be too high,

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Speaker 3: so they're not able to afford that. So then a

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Speaker 3: debt settlement plan makes a little bit more sense for

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Speaker 3: them because they're already passed due and they already can't

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Speaker 3: afford their minimum monthly payments.

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Speaker 1: So in the for profit model, that's a way of

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Speaker 1: like escalating things to try and get a reaction to

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Speaker 1: get a settlement to happen. Whereas MMI has better relationships.

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Speaker 1: I would say, is that what you would say with

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Speaker 1: with some of these creditors to be able to arrange

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Speaker 1: for a better debt payoff plan for clients.

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Speaker 3: Absolutely, settlement should really be the last resort for a consumer,

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Speaker 3: you know, before bankruptcy, and the bankruptcies are hard. So yeah,

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Speaker 3: there's a lot of different options that we have available,

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Speaker 3: and it's definitely about learning it through that. I mean again,

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Speaker 3: you know, we may give you a counseling session and

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Speaker 3: say you can probably pay this on your own, and

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Speaker 3: you know this is how we would do it, but

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Speaker 3: there are significant differences with those strategic The for profit

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Speaker 3: likes to call it a strategic default.

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Speaker 2: But it's the consumer.

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Speaker 3: The creditor is not going to settle your debt unless

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Speaker 3: you're in default. And MMI does have those relationships with

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Speaker 3: the bank that we may be able to get you

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Speaker 3: a better settlement offer. There are some major banks out

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Speaker 3: there that won't work directly with a for profit debt

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Speaker 3: settlement company, but they will work with companies like MMI

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Speaker 3: for settlement.

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Speaker 1: And I want to get into the specifics of debt

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Speaker 1: management plans debt settlements in just a second. I'm curious

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Speaker 1: to you as a as a former debt collector yourself, Like,

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Speaker 1: how how should people react? What should they do if

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Speaker 1: they're contacted by a debt collector about an old debt,

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Speaker 1: because especially in the era of endless scams AI scams,

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Speaker 1: I mean they're all over the place. It's like you're

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Speaker 1: telling me I owe you money, and in fact, I

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Speaker 1: probably do a some people money. So there's a good

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Speaker 1: Like you're just assuming, based on the way you've handl

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Speaker 1: finances that you probably do oh different entities money. What

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Speaker 1: do you do when you get that call? What should

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Speaker 1: your first reaction be?

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Speaker 3: So I would make sure that that is legitimate. If

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Speaker 3: you haven't received anything in writing from that company, tell

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Speaker 3: them that, hey, send me something in writing, I'll call

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Speaker 3: you back. I definitely don't, you know, try to hold

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Speaker 3: put your head in the sand and just avoid it.

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Speaker 3: You want to talk to them and say, hey, I

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Speaker 3: can't afford this right now, especially if it's your original creditor,

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Speaker 3: you know it's them, But again, make sure that you

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Speaker 3: get something in writing, make sure that you're talking about

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Speaker 3: the right account. If nothing else, get their phone number

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Speaker 3: and call them back and make sure that it's a

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Speaker 3: legitimate company and maybe google that number, because the scams

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Speaker 3: are out there and it's happening every day, especially with

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Speaker 3: the elderly.

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Speaker 1: And yeah, so so debt validation is kind of what

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Speaker 1: you're talking about, right like you, and that is something

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Speaker 1: that people have the right to ask for under federal law,

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Speaker 1: right like and can you maybe give the Fair Deck

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Speaker 1: Collection Practice Act is one of those things that offers

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Speaker 1: a lot of consumer protections for individuals. Yeah, what are

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Speaker 1: maybe some of the most important rights we have as

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Speaker 1: living in a free society with no debtors prisons, thank goodness?

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Speaker 1: What are some of the rights that we have?

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Speaker 3: So one of those is after the initial contact, the

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Speaker 3: FDCPA does state that the collection agency has to send

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Speaker 3: you a written demand letter. So even if it's not

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Speaker 3: validation of the debt, you should at least get something

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Speaker 3: from that collection agency that says, hey, we're collecting on

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Speaker 3: the behalf of Bank of America, so you'll at least

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Speaker 3: know it's a legitimate collection agency and it's.

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Speaker 2: Your debt that you owe.

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Speaker 3: But still be careful because it could be if you

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Speaker 3: have a very common name, it could be somebody that

402
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Speaker 3: has the same name as you, and so you want

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Speaker 3: to make sure.

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Speaker 2: That it's your debt.

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Speaker 3: The debt validation process is something else that can protect it.

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Speaker 3: Maybe you don't think that you owe that amount and

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Speaker 3: you don't understand, you know, how did this build double

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Speaker 3: whatever that may be. You can request your past statements.

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Speaker 3: You can request the breakdown of that account and to

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Speaker 3: figure out how much interest and late and over the

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Speaker 3: limit fees were added to your account. So make sure

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Speaker 3: you make sure that's the amount they owe.

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Speaker 1: Yeah, is there any way to push back sometimes on

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Speaker 1: the fact that the bill has grown significantly? And how

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Speaker 1: often does the original debt holder not have the documentation

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Speaker 1: to prove that the debt is owed? And so sometimes

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Speaker 1: that's how maybe the debt falls away for you.

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Speaker 3: Yeah, so the original creditor typically has all of that documentation. Well,

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Speaker 3: it could be a debt purchaser that doesn't. But if

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Speaker 3: you're already that far past due, we're definitely looking at

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Speaker 3: something that same collections to add that type of interest

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Speaker 3: and leap fees and over the So that significant balance

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Speaker 3: change is really going to happen when your account's pass

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Speaker 3: due and in collections and probably charged off.

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Speaker 1: Okay, I've got a few more questions I want to

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Speaker 1: get to with you. I want to talk about debt

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Speaker 1: management plans, that settlement plans, and how people determine which

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Speaker 1: one is best, and maybe some of the ethical nature

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Speaker 1: of paying less than you owe. That's a big question

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Speaker 1: too when we're talking about paying off debt. We'll get

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Speaker 1: to that and more with Johanna in just a second.

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Speaker 1: I were back for the break. Still talking with Johanna

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Speaker 1: somorrow we're talking about paying off debt and and specifically

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Speaker 1: when let's say you've got more debt on hand than

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Speaker 1: you think is reasonable for you to be able to

436
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Speaker 1: pay off, Like what do you do? How do you proceed?

437
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Speaker 1: Or what if you're being hounded by debt collectors? Like

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Speaker 1: these are important things and maybe I know a lot

439
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Speaker 1: of the how to money crowd is like not me,

440
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Speaker 1: I'm doing great, But this hopefully is at least a

441
00:21:35,119 --> 00:21:37,919
Speaker 1: great episode for you to share with friends or family

442
00:21:37,920 --> 00:21:40,080
Speaker 1: who feel like they're kind of behind the eight ball

443
00:21:40,080 --> 00:21:43,040
Speaker 1: when it comes to debt that they've taken on. Johanna,

444
00:21:43,080 --> 00:21:45,960
Speaker 1: I want to talk about like there's sometimes this terminology

445
00:21:46,040 --> 00:21:49,800
Speaker 1: that people are They're like, I don't know the difference

446
00:21:49,800 --> 00:21:53,320
Speaker 1: between a debt management plan and debt settlement. What is

447
00:21:53,359 --> 00:21:56,160
Speaker 1: the difference and how do people determine which route is best?

448
00:21:57,080 --> 00:22:00,600
Speaker 3: So I think that really depends on the person situation.

449
00:22:00,760 --> 00:22:04,760
Speaker 3: So if you're current and you're in a pre charge

450
00:22:04,800 --> 00:22:08,280
Speaker 3: off status, that I would say a debt management plan,

451
00:22:08,400 --> 00:22:10,200
Speaker 3: if you can afford that payment, is going to be.

452
00:22:10,359 --> 00:22:11,320
Speaker 2: Your best choice.

453
00:22:11,480 --> 00:22:14,199
Speaker 3: It is doing Yeah, so that's one hundred percent of

454
00:22:14,200 --> 00:22:18,240
Speaker 3: your balance repayment. Typically concessions with your creditors sometimes we

455
00:22:18,280 --> 00:22:21,360
Speaker 3: can get it as low as zero percent. It's going

456
00:22:21,440 --> 00:22:24,760
Speaker 3: to be a predictable, structured payment, and your credit is

457
00:22:24,800 --> 00:22:27,800
Speaker 3: going to improve over time, and your legal risk and

458
00:22:27,880 --> 00:22:30,720
Speaker 3: tax risk are going to be very minimal. So it

459
00:22:30,800 --> 00:22:33,800
Speaker 3: should be really your first line solution if you have

460
00:22:33,880 --> 00:22:36,960
Speaker 3: those type of debts now collections, that's a little bit different.

461
00:22:36,760 --> 00:22:38,199
Speaker 2: Right, What is it?

462
00:22:38,280 --> 00:22:42,320
Speaker 1: What is in the creditors interest to agree to that,

463
00:22:42,440 --> 00:22:45,879
Speaker 1: to say, listen, you owe me at an eleven percent

464
00:22:45,960 --> 00:22:50,440
Speaker 1: interest rate, this debt like it continues to accrue. I'm

465
00:22:50,480 --> 00:22:54,760
Speaker 1: just waiting over here salivating to get my cut. But

466
00:22:55,000 --> 00:22:59,080
Speaker 1: in the under a debt management plan, I guess some people,

467
00:22:59,119 --> 00:23:01,359
Speaker 1: as he sayd as little as zero percent interest's what's

468
00:23:01,359 --> 00:23:01,880
Speaker 1: in it for them?

469
00:23:02,280 --> 00:23:03,800
Speaker 3: So what's really in it for them is they're going

470
00:23:03,840 --> 00:23:06,320
Speaker 3: to get one hundred percent recovery that balance, they're probably

471
00:23:06,359 --> 00:23:08,880
Speaker 3: going to maintain that consumer in the future. They may

472
00:23:08,880 --> 00:23:10,720
Speaker 3: not be able to use this credit card, but once

473
00:23:10,880 --> 00:23:14,639
Speaker 3: their credit starts to become intact, they're going to retain that. Also,

474
00:23:14,680 --> 00:23:17,520
Speaker 3: a lot of times credit cards now are in the twenties. Right,

475
00:23:17,600 --> 00:23:21,040
Speaker 3: we're talking twenty nine percent interest. So even though they're

476
00:23:21,080 --> 00:23:23,879
Speaker 3: not getting that twenty nine percent, even if we're getting

477
00:23:23,880 --> 00:23:26,320
Speaker 3: them zero to seven again, they're going to retain that consumer.

478
00:23:26,320 --> 00:23:29,240
Speaker 3: They're going to recover that in that entire balance instead

479
00:23:29,240 --> 00:23:32,320
Speaker 3: of having to do a settlement and recover less or

480
00:23:32,480 --> 00:23:34,199
Speaker 3: potentially never recover that.

481
00:23:35,359 --> 00:23:37,800
Speaker 1: So and then in terms of debt settlement, what does

482
00:23:38,080 --> 00:23:40,879
Speaker 1: that look like and how and then how does someone

483
00:23:41,000 --> 00:23:45,480
Speaker 1: walk through comparison between Are those the two main options?

484
00:23:45,520 --> 00:23:47,080
Speaker 1: Are there other options to reblot there too?

485
00:23:47,920 --> 00:23:50,119
Speaker 3: I mean, those are the two main options that are

486
00:23:50,119 --> 00:23:52,119
Speaker 3: out there, but there's also again you know, doing it

487
00:23:52,200 --> 00:23:54,960
Speaker 3: on your own and trying it to But either way

488
00:23:54,960 --> 00:23:56,840
Speaker 3: it's that repayment of the debt of the one hundred

489
00:23:56,840 --> 00:23:58,520
Speaker 3: percent or do a settlement or the.

490
00:23:58,520 --> 00:24:00,920
Speaker 2: Barrier head in the sand kind of aspect to it.

491
00:24:01,119 --> 00:24:05,280
Speaker 3: There's also bankruptcy out there, but the bankruptcy laws are

492
00:24:05,359 --> 00:24:09,560
Speaker 3: very different. Chapter seven used to be really huge. I

493
00:24:09,560 --> 00:24:12,359
Speaker 3: think it was around seven. I could be wrong on

494
00:24:12,400 --> 00:24:14,440
Speaker 3: the data, may have been five somewhere around in there.

495
00:24:14,560 --> 00:24:17,359
Speaker 3: But bankruptcy law has changed, so filing a Chapter seven

496
00:24:17,840 --> 00:24:19,760
Speaker 3: isn't like what it used to be. You have to

497
00:24:19,760 --> 00:24:23,040
Speaker 3: be below the median income in your state, and a

498
00:24:23,040 --> 00:24:24,919
Speaker 3: lot of people don't meet that threshold. So they're going

499
00:24:24,960 --> 00:24:26,840
Speaker 3: to end up in one hundred percent repayment of their

500
00:24:26,840 --> 00:24:29,439
Speaker 3: debt anyways through the bankruptcy court. So that's always a

501
00:24:29,480 --> 00:24:32,359
Speaker 3: viable option as well, but it kind of depends on

502
00:24:32,400 --> 00:24:33,800
Speaker 3: where you're at in that collection cycle.

503
00:24:33,840 --> 00:24:36,560
Speaker 1: Again, you told me at one point that consumers can

504
00:24:36,600 --> 00:24:39,679
Speaker 1: settle their debt at any time. Tell me more about that, Like,

505
00:24:39,800 --> 00:24:42,280
Speaker 1: should people attempt to DII? Why this? Should more people

506
00:24:42,320 --> 00:24:47,240
Speaker 1: be looking to? Say? Hey, Like the credit card companies

507
00:24:47,720 --> 00:24:50,840
Speaker 1: are making these individual deals with credit card users with

508
00:24:50,880 --> 00:24:55,240
Speaker 1: consumers regularly, Like, is this something I should be even

509
00:24:55,280 --> 00:24:57,480
Speaker 1: if I can afford to pay this off slowly? But

510
00:24:57,520 --> 00:24:59,360
Speaker 1: surely is this something I should be looking towards?

511
00:25:00,119 --> 00:25:03,679
Speaker 3: That it is something that they should look at expect

512
00:25:03,960 --> 00:25:05,600
Speaker 3: and again it's going to be passed you. The creditor

513
00:25:05,680 --> 00:25:06,959
Speaker 3: is not going to come to them and offer them

514
00:25:06,960 --> 00:25:08,720
Speaker 3: a settlement when they're current on their account. I mean,

515
00:25:08,760 --> 00:25:11,960
Speaker 3: why would they at that point? You're somebody that they're

516
00:25:12,040 --> 00:25:14,719
Speaker 3: collecting interest off of there. You know, you're making your

517
00:25:14,760 --> 00:25:16,960
Speaker 3: minimum monthly payments. But if you're already past you and

518
00:25:16,960 --> 00:25:19,199
Speaker 3: your creditor is calling you to offer a settlement, that

519
00:25:19,320 --> 00:25:21,280
Speaker 3: is something that you could do.

520
00:25:21,280 --> 00:25:23,280
Speaker 2: Doing it on your own is a little difficult, right,

521
00:25:23,800 --> 00:25:25,320
Speaker 2: it's shaky territory.

522
00:25:25,400 --> 00:25:28,280
Speaker 3: You trust this bank, they owned you, I'm sorry, they

523
00:25:28,359 --> 00:25:31,320
Speaker 3: loaned you money in a time of need, and so

524
00:25:31,359 --> 00:25:34,159
Speaker 3: you trust them and you want to repay your debt, andtrinsically,

525
00:25:34,200 --> 00:25:36,240
Speaker 3: we want to do the right thing, right, Repaying debt

526
00:25:36,280 --> 00:25:37,960
Speaker 3: is what we always do. Nobody wakes up one morning

527
00:25:37,960 --> 00:25:39,800
Speaker 3: and says, I want to join a debt management plan, right,

528
00:25:39,800 --> 00:25:42,800
Speaker 3: I want to join a debt settlement program. Something significant

529
00:25:42,800 --> 00:25:45,000
Speaker 3: has happened in their life or word today. It's just

530
00:25:45,040 --> 00:25:48,080
Speaker 3: the economy in general. You know, inflation's going up and

531
00:25:48,200 --> 00:25:49,800
Speaker 3: wages aren't keeping up with that gap.

532
00:25:51,400 --> 00:25:55,600
Speaker 1: And some people also don't qualify for a debt management plan, right, Like,

533
00:25:55,920 --> 00:25:58,119
Speaker 1: why is that? And what's their best bet if they don't?

534
00:25:58,240 --> 00:26:00,680
Speaker 3: So typically, what we're seeing is if they don't don't qualify,

535
00:26:00,760 --> 00:26:05,520
Speaker 3: there is a significant budget deficit for some whatever reason

536
00:26:05,520 --> 00:26:08,000
Speaker 3: that may be. And maybe it's you know, medical bills.

537
00:26:09,480 --> 00:26:11,520
Speaker 3: And I think that that's a huge part of what's.

538
00:26:11,320 --> 00:26:12,840
Speaker 2: Happening now is you know, we have a lot of

539
00:26:12,880 --> 00:26:13,560
Speaker 2: medical bills.

540
00:26:14,240 --> 00:26:18,000
Speaker 3: Maybe it's a job loss or a divorce, there's something

541
00:26:18,080 --> 00:26:20,600
Speaker 3: death in the families, there's something that's significant that has

542
00:26:20,640 --> 00:26:22,679
Speaker 3: really tipped them over the edges. They're not going to

543
00:26:22,680 --> 00:26:25,680
Speaker 3: be able to afford their minimum monthly payments. But again,

544
00:26:25,720 --> 00:26:28,800
Speaker 3: there's there's things out there before you get to settlement

545
00:26:28,960 --> 00:26:31,520
Speaker 3: or before you get to bankruptcy, like the debt management

546
00:26:31,560 --> 00:26:34,159
Speaker 3: plans or trying to get on an internal hardship program

547
00:26:34,160 --> 00:26:37,719
Speaker 3: with your original creditors. Unfortunately, the for profit industry is

548
00:26:37,760 --> 00:26:43,080
Speaker 3: catching those people in their funnels prior to even getting

549
00:26:43,119 --> 00:26:46,840
Speaker 3: to a solution with their creditors or a nonprofit they

550
00:26:46,920 --> 00:26:49,080
Speaker 3: you know, they're they're doing these late nights, you know,

551
00:26:49,119 --> 00:26:51,280
Speaker 3: people are up at night and they're doing these ads

552
00:26:51,320 --> 00:26:53,760
Speaker 3: of you know, we can settle your debt for less

553
00:26:53,800 --> 00:26:55,679
Speaker 3: than what you owe, get you a better payment. And

554
00:26:55,720 --> 00:26:57,600
Speaker 3: people are really payment shopping right now.

555
00:26:57,720 --> 00:27:00,920
Speaker 1: Oh yeah, a lot of payment shopping going on. If

556
00:27:00,960 --> 00:27:04,520
Speaker 1: payment shopping for your debt pay down isn't the best

557
00:27:04,520 --> 00:27:05,439
Speaker 1: way to go about it, what is?

558
00:27:06,000 --> 00:27:07,760
Speaker 3: So I think the best way to really go about

559
00:27:07,760 --> 00:27:10,359
Speaker 3: it is, you know, sit down with a nonprofit like

560
00:27:10,480 --> 00:27:13,240
Speaker 3: mm I, go through your budget, figure out where you

561
00:27:13,280 --> 00:27:17,280
Speaker 3: can save costs. We can also we have alternatives that

562
00:27:17,280 --> 00:27:20,400
Speaker 3: we could send you to. Maybe you need some help

563
00:27:20,480 --> 00:27:24,200
Speaker 3: with food stamps, or there's food pantries in your area.

564
00:27:24,240 --> 00:27:27,000
Speaker 3: Those are other things that we would look towards. And

565
00:27:27,200 --> 00:27:30,720
Speaker 3: besides helping you with your budget. And again, maybe you

566
00:27:30,760 --> 00:27:32,919
Speaker 3: actually need help with your rent and we could do

567
00:27:32,960 --> 00:27:35,639
Speaker 3: some housing counseling for you, or you need help with your.

568
00:27:35,480 --> 00:27:37,600
Speaker 2: Mortgage, so we could talk.

569
00:27:37,400 --> 00:27:41,080
Speaker 3: We have other solutions that are available other than just

570
00:27:41,840 --> 00:27:44,080
Speaker 3: you know, settlement or d MPs.

571
00:27:45,600 --> 00:27:48,640
Speaker 1: Okay, let's talk about the ethical nature of debt repayment.

572
00:27:48,880 --> 00:27:51,960
Speaker 1: Should people have to pay back the full debt obligation

573
00:27:52,040 --> 00:27:55,320
Speaker 1: they took on, because this is this is ethically ambiguous

574
00:27:55,359 --> 00:27:57,920
Speaker 1: territory at times. Right when we're talking about what should

575
00:27:58,000 --> 00:28:01,879
Speaker 1: be done, what's doable? What are the ethical ramifications of

576
00:28:02,119 --> 00:28:05,439
Speaker 1: seeking help negotiating down your debt, at least with a

577
00:28:05,440 --> 00:28:09,000
Speaker 1: debt management plan. We're talking about, Yeah, getting a better rate,

578
00:28:09,040 --> 00:28:11,800
Speaker 1: but paying back everything that you owe. With that settlement,

579
00:28:11,840 --> 00:28:14,800
Speaker 1: we're talking about asking to pay back less than what

580
00:28:14,880 --> 00:28:18,640
Speaker 1: we borrowed. So yeah, what's the ethical there's some ethical

581
00:28:18,680 --> 00:28:20,320
Speaker 1: potentially ethical landmndes.

582
00:28:19,960 --> 00:28:21,400
Speaker 2: There there is.

583
00:28:21,640 --> 00:28:24,280
Speaker 3: I mean, a DMP is more about keeping promises and

584
00:28:24,320 --> 00:28:27,639
Speaker 3: paying what you owe just in a way that's realistic,

585
00:28:28,160 --> 00:28:31,680
Speaker 3: and I think for settlement it's about it's not about

586
00:28:31,680 --> 00:28:35,240
Speaker 3: avoiding responsibility. It's just about choosing the least harmful option

587
00:28:36,000 --> 00:28:39,320
Speaker 3: when the math no longer works, so it's really your

588
00:28:39,400 --> 00:28:41,720
Speaker 3: last resort and safety net.

589
00:28:42,560 --> 00:28:46,080
Speaker 1: In terms of you mentioned medical bills, how big of

590
00:28:46,120 --> 00:28:49,560
Speaker 1: an issue are those from consumers that come to MMI

591
00:28:50,080 --> 00:28:53,600
Speaker 1: is medical debt? Like typically a big problem that they

592
00:28:53,600 --> 00:28:56,160
Speaker 1: face is that kind of is that the straw that

593
00:28:56,160 --> 00:28:58,280
Speaker 1: broke the camel's back. They've got these other debts that

594
00:28:58,280 --> 00:29:01,680
Speaker 1: they can handle it, and then boom, a medical they

595
00:29:01,720 --> 00:29:04,600
Speaker 1: have some sort of medical emergency and they have a

596
00:29:04,640 --> 00:29:07,480
Speaker 1: massive medical bill that they can't afford to pay, and

597
00:29:07,520 --> 00:29:09,920
Speaker 1: that that pushes them over the edge. What does that

598
00:29:09,960 --> 00:29:13,000
Speaker 1: look like? And then I'm also curious, like I talked

599
00:29:13,040 --> 00:29:16,840
Speaker 1: with Jared from Dollar four, which is an awesome organization

600
00:29:16,880 --> 00:29:20,240
Speaker 1: that helps people figure out what they're eligible for in

601
00:29:20,360 --> 00:29:24,440
Speaker 1: terms of full forgiveness for medical debt if they're below

602
00:29:24,440 --> 00:29:27,480
Speaker 1: a certain income. Is that something that most people are

603
00:29:27,520 --> 00:29:30,240
Speaker 1: just unaware of, and so they're paying back debt that

604
00:29:30,320 --> 00:29:31,960
Speaker 1: maybe they don't owe in the first place.

605
00:29:32,720 --> 00:29:33,120
Speaker 2: Yeah.

606
00:29:33,160 --> 00:29:36,680
Speaker 3: Absolutely, And I think that programs like that are excellent

607
00:29:36,960 --> 00:29:40,520
Speaker 3: places to go for resources to understand what your rights

608
00:29:40,520 --> 00:29:43,280
Speaker 3: are as a consumer, what's available in your state or

609
00:29:43,520 --> 00:29:47,280
Speaker 3: with that particular hospital. So those are things that people

610
00:29:47,320 --> 00:29:51,320
Speaker 3: should go to. I'm unsure for MMI. I mean, I

611
00:29:51,360 --> 00:29:53,800
Speaker 3: know that medical hardships are a huge thing for us,

612
00:29:53,920 --> 00:29:57,200
Speaker 3: or you know, disaster relief or does disaster recovery. That's

613
00:29:57,200 --> 00:30:01,440
Speaker 3: another thing that MMI really works with. There are significant

614
00:30:01,440 --> 00:30:04,520
Speaker 3: things that happen, but the medical debt is definitely a

615
00:30:04,600 --> 00:30:06,800
Speaker 3: huge percentage of our population.

616
00:30:07,160 --> 00:30:11,080
Speaker 1: Yeah. How much negotiation typically happens in the debt settlement space,

617
00:30:11,120 --> 00:30:14,120
Speaker 1: I mean some consumers just have no idea that their

618
00:30:14,120 --> 00:30:17,400
Speaker 1: debt is even negotiable. Most people, if they know that

619
00:30:17,440 --> 00:30:20,160
Speaker 1: it is, have no idea how much wiggle room exists,

620
00:30:20,240 --> 00:30:23,160
Speaker 1: Like can you shed some light like how much in

621
00:30:23,880 --> 00:30:28,040
Speaker 1: debt if someone were to try to settle their debt,

622
00:30:28,080 --> 00:30:30,880
Speaker 1: whether it's DIY or whether it's with the help of

623
00:30:31,120 --> 00:30:34,000
Speaker 1: a nonprofit, how much can they expect to have that

624
00:30:34,040 --> 00:30:35,960
Speaker 1: balance reduced and what are the terms look like?

625
00:30:36,040 --> 00:30:40,480
Speaker 3: Usually, so, on average, a debt will settle for about

626
00:30:40,520 --> 00:30:45,080
Speaker 3: fifty percent of the current balance and that can be

627
00:30:45,120 --> 00:30:48,479
Speaker 3: spread over time. So a debt settlement program is probably

628
00:30:48,480 --> 00:30:50,320
Speaker 3: going to take you thirty six to forty eight months,

629
00:30:50,400 --> 00:30:55,200
Speaker 3: kind of like a debt management plan. So that's kind

630
00:30:55,240 --> 00:30:56,440
Speaker 3: of you roughly your time frame.

631
00:30:56,960 --> 00:30:58,960
Speaker 1: How much does something like that impact someone's credit.

632
00:30:59,400 --> 00:31:02,239
Speaker 3: So you are already current and you have to do

633
00:31:02,280 --> 00:31:05,760
Speaker 3: that strategic default like the for profit, it's a huge

634
00:31:05,800 --> 00:31:07,880
Speaker 3: impact to your credit. You're going to see a huge

635
00:31:07,880 --> 00:31:10,840
Speaker 3: slide eventually once those accounts are paid off, then it's

636
00:31:10,840 --> 00:31:14,600
Speaker 3: going to come up. And that's the biggest thing is

637
00:31:14,640 --> 00:31:17,800
Speaker 3: you're going to see that initial drop later recovery with

638
00:31:18,360 --> 00:31:20,719
Speaker 3: a DMP. If your accounts are current and we can

639
00:31:20,760 --> 00:31:23,120
Speaker 3: get you those concessions with your creditor, then your your

640
00:31:23,120 --> 00:31:26,680
Speaker 3: credit's going to improve over time. I think roughly for

641
00:31:27,080 --> 00:31:31,600
Speaker 3: MMI consumers that enroll in a DMP, they have about

642
00:31:31,600 --> 00:31:33,000
Speaker 3: a six to twenty one credit score.

643
00:31:33,040 --> 00:31:34,400
Speaker 2: We see that quickly rise.

644
00:31:34,520 --> 00:31:37,040
Speaker 3: Well, it still improves over time, but we're going to

645
00:31:37,040 --> 00:31:40,360
Speaker 3: start to see that twenty thirty points rise within probably

646
00:31:40,400 --> 00:31:44,160
Speaker 3: the first year with a settlement plan. Our consumers that

647
00:31:44,200 --> 00:31:47,240
Speaker 3: we're pulling into our settlement programs and saying, hey, you know,

648
00:31:47,280 --> 00:31:49,480
Speaker 3: there's the other options. They're already passed due, so they've

649
00:31:49,480 --> 00:31:51,840
Speaker 3: got about an average credit score five hundred and fifty,

650
00:31:52,040 --> 00:31:54,680
Speaker 3: so they were already down that path of being delinquent.

651
00:31:55,080 --> 00:31:58,160
Speaker 3: And I think that's again a significant difference between for

652
00:31:58,320 --> 00:31:59,360
Speaker 3: profit and nonprofit.

653
00:32:00,360 --> 00:32:04,040
Speaker 1: And how does a consumer know would it make sense

654
00:32:04,080 --> 00:32:07,960
Speaker 1: to stop paying a bill? Right? Because there is if

655
00:32:08,000 --> 00:32:11,720
Speaker 1: it's hard to put food on the table, like, oh man,

656
00:32:11,720 --> 00:32:14,400
Speaker 1: it's just hard to make ends meet. How do I

657
00:32:14,480 --> 00:32:17,360
Speaker 1: know which debt to stop paying on? When to stop

658
00:32:17,360 --> 00:32:20,440
Speaker 1: paying on that debt? It's and then what signal does

659
00:32:20,480 --> 00:32:24,200
Speaker 1: that send to the creditor? Yeah, talk to me about

660
00:32:24,200 --> 00:32:25,800
Speaker 1: someone who feels like they're getting to the end of

661
00:32:25,840 --> 00:32:29,200
Speaker 1: their rope and they're just not sure what to prioritize.

662
00:32:29,600 --> 00:32:33,360
Speaker 3: Well, obviously you want to prioritize your secure you know,

663
00:32:33,520 --> 00:32:36,840
Speaker 3: you're housing your car so you can get to work,

664
00:32:37,160 --> 00:32:39,320
Speaker 3: those type of things that are significant to your day

665
00:32:39,360 --> 00:32:41,400
Speaker 3: to day life, because you need a place to live,

666
00:32:41,440 --> 00:32:43,040
Speaker 3: you need a car to drive to work.

667
00:32:43,080 --> 00:32:44,360
Speaker 2: If you have that ability.

668
00:32:44,760 --> 00:32:46,960
Speaker 3: There are some people that you know, they live in

669
00:32:47,120 --> 00:32:49,640
Speaker 3: a metropolitan area and they could take the bus or whatever,

670
00:32:49,680 --> 00:32:52,719
Speaker 3: so maybe they don't need that car. If you live

671
00:32:52,720 --> 00:32:54,240
Speaker 3: in a more rural area, you're going to need that

672
00:32:54,280 --> 00:32:56,720
Speaker 3: car to get back and forth to work. So definitely

673
00:32:56,720 --> 00:32:59,080
Speaker 3: try to take care of those secure debts that aren't

674
00:32:59,720 --> 00:33:03,880
Speaker 3: to so they're not your four wheelers, and you know,

675
00:33:04,040 --> 00:33:06,480
Speaker 3: your motorcycle and the unless your motorcycle is your primary

676
00:33:06,480 --> 00:33:10,200
Speaker 3: mode of transportation, right, so those are the things that

677
00:33:10,240 --> 00:33:10,920
Speaker 3: you really want.

678
00:33:10,800 --> 00:33:13,400
Speaker 2: To focus on, and then you get to that unsecured debt.

679
00:33:13,400 --> 00:33:16,280
Speaker 3: I would definitely say, you know, your medical debt is important,

680
00:33:16,320 --> 00:33:18,080
Speaker 3: but a lot of times if you call the hospital

681
00:33:18,120 --> 00:33:20,000
Speaker 3: and you're paying something on it, they're going to work

682
00:33:20,000 --> 00:33:23,600
Speaker 3: with you. Not every hospital, not every place, but those

683
00:33:23,600 --> 00:33:26,080
Speaker 3: folks are going to work with you. And then when

684
00:33:26,080 --> 00:33:28,440
Speaker 3: it comes to the unsecured debt, it's probably you know,

685
00:33:28,480 --> 00:33:31,840
Speaker 3: when you no longer you've had some emergency and now

686
00:33:31,840 --> 00:33:34,080
Speaker 3: you can no longer make those minimal monthly payments, and

687
00:33:34,160 --> 00:33:36,920
Speaker 3: so it's really that unsecured that goes away first. And

688
00:33:36,960 --> 00:33:38,640
Speaker 3: your family has to be able to eat, so you

689
00:33:38,680 --> 00:33:41,880
Speaker 3: want groceries, and all of those things are very important

690
00:33:41,920 --> 00:33:43,480
Speaker 3: over that unsecured debt.

691
00:33:43,920 --> 00:33:45,960
Speaker 1: I think some people maybe feel like they have to

692
00:33:45,960 --> 00:33:48,360
Speaker 1: stretch the truth in order to get a get a

693
00:33:48,360 --> 00:33:52,040
Speaker 1: better deal, like from from the you know, party that

694
00:33:52,040 --> 00:33:54,680
Speaker 1: they owe money to. But then some people really can't

695
00:33:54,680 --> 00:33:57,240
Speaker 1: afford to pay. Talk to me maybe about like hardship

696
00:33:57,320 --> 00:34:01,080
Speaker 1: letters or an honest financial disclosure. What does that look

697
00:34:01,120 --> 00:34:05,240
Speaker 1: like and how much information do creditors want from individuals

698
00:34:05,560 --> 00:34:09,319
Speaker 1: when it comes to finding a settlement that where they

699
00:34:09,320 --> 00:34:12,160
Speaker 1: don't feel like they're being taken advantage of, but the

700
00:34:12,239 --> 00:34:13,920
Speaker 1: individual is getting some concessions.

701
00:34:14,800 --> 00:34:18,160
Speaker 3: So I think that, you know, consumers should have full

702
00:34:18,200 --> 00:34:21,920
Speaker 3: disclosure with their creditors on what their hardship is, you know,

703
00:34:22,200 --> 00:34:25,640
Speaker 3: especially when it's something significant like medical or job loss,

704
00:34:25,920 --> 00:34:30,000
Speaker 3: or a divorce, whatever that may be a death of

705
00:34:30,040 --> 00:34:34,160
Speaker 3: a loved one, because those are significant impacts to somebody's life,

706
00:34:34,239 --> 00:34:36,120
Speaker 3: especially you know, if that death of a loved one

707
00:34:36,200 --> 00:34:38,480
Speaker 3: was a spouse and they were your primary wagers. So

708
00:34:39,040 --> 00:34:41,600
Speaker 3: be forthcoming with your creditors. Tell them what's going on.

709
00:34:42,000 --> 00:34:45,640
Speaker 3: Creditors these days, they understand, they get it, and they've

710
00:34:45,680 --> 00:34:47,799
Speaker 3: seen your charges on your credit cards, right They know

711
00:34:47,840 --> 00:34:50,759
Speaker 3: that you've been spending your money on groceries and not

712
00:34:50,800 --> 00:34:53,399
Speaker 3: frivolous things that you weren't out at Bloomingdale spending three

713
00:34:53,400 --> 00:34:55,920
Speaker 3: thousand dollars on just close right, So they're going to

714
00:34:56,000 --> 00:34:58,399
Speaker 3: see that progression in your debt.

715
00:34:58,480 --> 00:35:00,239
Speaker 2: So I think that just being open and eyes honest.

716
00:35:01,040 --> 00:35:04,040
Speaker 3: Now, when you're talking to collection agencies and law firms

717
00:35:04,040 --> 00:35:07,440
Speaker 3: that may be collecting on behalf of the creditor, you

718
00:35:07,480 --> 00:35:11,880
Speaker 3: may not want to necessarily, you definitely want to disclose

719
00:35:11,920 --> 00:35:13,879
Speaker 3: all of your hardship, but there are times that they're

720
00:35:13,920 --> 00:35:16,960
Speaker 3: going to use the information that they get to collect

721
00:35:17,000 --> 00:35:19,600
Speaker 3: that debt, So especially if it's down a legal path,

722
00:35:19,680 --> 00:35:22,200
Speaker 3: so you know, be careful they're going to figure out

723
00:35:22,200 --> 00:35:24,799
Speaker 3: where you work, but definitely say hey, I've returned to work,

724
00:35:25,120 --> 00:35:28,160
Speaker 3: I make less money than I did before, because a

725
00:35:28,200 --> 00:35:30,280
Speaker 3: lot of times if they do go down that legal

726
00:35:30,320 --> 00:35:33,840
Speaker 3: path and they file a lawsuit there in some states

727
00:35:34,400 --> 00:35:37,160
Speaker 3: they can you know, do a wage guardnageument, a bank levy,

728
00:35:38,760 --> 00:35:41,279
Speaker 3: lean your home depending on you know, whatever the state

729
00:35:41,320 --> 00:35:42,160
Speaker 3: regulations are.

730
00:35:42,560 --> 00:35:46,240
Speaker 1: So we were talking about settling for less or trying

731
00:35:46,280 --> 00:35:51,759
Speaker 1: to negotiate right a lower payment full payment in order

732
00:35:51,840 --> 00:35:55,040
Speaker 1: to pay less than what you owe. I'm curious, like,

733
00:35:55,080 --> 00:36:00,200
Speaker 1: what do people typically have better results when they're negotia

734
00:36:00,320 --> 00:36:04,879
Speaker 1: with the original creditor or with a debt collector that's

735
00:36:04,920 --> 00:36:09,960
Speaker 1: assumed the debt later on, Like what's the difference there,

736
00:36:10,120 --> 00:36:12,520
Speaker 1: look like negotiating with each party.

737
00:36:13,600 --> 00:36:17,040
Speaker 3: So internal collection agencies, if it's severely passed due and

738
00:36:17,120 --> 00:36:19,200
Speaker 3: it's at that charge off phase, you're probably going to

739
00:36:19,200 --> 00:36:22,680
Speaker 3: get a pretty good deal with your original creditor collection agency.

740
00:36:22,800 --> 00:36:25,840
Speaker 3: Same thing if it's that contingency agency where they're collecting

741
00:36:25,840 --> 00:36:28,279
Speaker 3: on behalf of the bank. The bank actually gives them

742
00:36:28,280 --> 00:36:30,640
Speaker 3: their guidelines on what they can settle for, and it's

743
00:36:30,680 --> 00:36:33,520
Speaker 3: all based on whatever their hardship parameters are, and it

744
00:36:33,600 --> 00:36:37,319
Speaker 3: varies by bank. So some are as low as you know,

745
00:36:37,520 --> 00:36:39,279
Speaker 3: I've seen it in the industry years ago, as low

746
00:36:39,360 --> 00:36:42,400
Speaker 3: as ten percent that you're paid repayment, or it's as

747
00:36:42,480 --> 00:36:45,440
Speaker 3: high as seventy eighty percent. If you're down that legal path.

748
00:36:45,920 --> 00:36:49,080
Speaker 3: Once you get to a debt purchaser, you should definitely

749
00:36:49,120 --> 00:36:51,240
Speaker 3: try to settle that account for as little as possible

750
00:36:51,280 --> 00:36:54,200
Speaker 3: because they've purchased that debt from the original creditor for

751
00:36:54,280 --> 00:36:57,040
Speaker 3: pennies on the dollar. Probably somewhere around twelve cents on

752
00:36:57,080 --> 00:36:59,920
Speaker 3: the dollar, so you definitely have a little bit more

753
00:37:00,080 --> 00:37:03,040
Speaker 3: leverage there and let less again they go down that

754
00:37:03,120 --> 00:37:03,720
Speaker 3: legal path.

755
00:37:03,960 --> 00:37:06,120
Speaker 1: Okay, I got a few more questions I want to

756
00:37:06,120 --> 00:37:09,440
Speaker 1: get to with you, Johanna, and including like, yeah, what

757
00:37:09,440 --> 00:37:12,720
Speaker 1: are some of the best resources MMI has to help people.

758
00:37:12,840 --> 00:37:22,640
Speaker 1: We'll talk about that and more right after this. All right,

759
00:37:22,640 --> 00:37:25,120
Speaker 1: we're back. We're still talking about paying off debt with

760
00:37:25,360 --> 00:37:28,120
Speaker 1: Johanna Samara from MMI, which is just one of my

761
00:37:28,160 --> 00:37:31,920
Speaker 1: favorite nonprofits that's helped just I don't know, tens of

762
00:37:31,920 --> 00:37:34,839
Speaker 1: thousands of people get out of debt, pay off their debt,

763
00:37:35,280 --> 00:37:40,040
Speaker 1: and more than that, right, they've helped people learn what

764
00:37:40,080 --> 00:37:44,239
Speaker 1: it looks like to successfully manage their household finances. So

765
00:37:45,120 --> 00:37:47,800
Speaker 1: it is the kind of Swiss army knife, if you will,

766
00:37:48,000 --> 00:37:51,000
Speaker 1: of help with people's finances, which I think is so

767
00:37:51,040 --> 00:37:56,920
Speaker 1: wonderful and charging far less right than these four profits do.

768
00:37:57,080 --> 00:38:01,080
Speaker 1: So really it's it's a mission driven organization. Johanna, I'm like,

769
00:38:01,960 --> 00:38:05,759
Speaker 1: compare that to maybe some of the tactics of the

770
00:38:05,760 --> 00:38:08,880
Speaker 1: debt collectors out there. What are maybe I'm curious, what

771
00:38:08,920 --> 00:38:11,279
Speaker 1: are some of the biggest tricks that they tend to use.

772
00:38:11,680 --> 00:38:15,239
Speaker 1: And there are a lot of like debt collectors just

773
00:38:15,280 --> 00:38:18,759
Speaker 1: doing their job right, They are fine people, not questioning

774
00:38:19,239 --> 00:38:23,520
Speaker 1: their morality. But then there are some unscrupulous debt collectors too,

775
00:38:24,120 --> 00:38:27,960
Speaker 1: just like they're bad people in any industry. But what

776
00:38:28,040 --> 00:38:32,719
Speaker 1: are maybe some of the tricks or the attempts that

777
00:38:32,760 --> 00:38:35,600
Speaker 1: they use. How do they attempt to get people to

778
00:38:35,640 --> 00:38:39,640
Speaker 1: maybe pay more than they can actually afford, because I

779
00:38:39,640 --> 00:38:42,080
Speaker 1: gotta imagine sometimes you feel like you negotiate a deal

780
00:38:42,120 --> 00:38:44,640
Speaker 1: with the debt collector and it turns out you can't

781
00:38:44,640 --> 00:38:47,000
Speaker 1: even afford the deal you agree to, right.

782
00:38:47,120 --> 00:38:49,400
Speaker 3: A lot of that is they use a lot of

783
00:38:49,400 --> 00:38:52,600
Speaker 3: scare tactics. And again there are good debt collectors and

784
00:38:52,640 --> 00:38:53,720
Speaker 3: there's bad debt collectors.

785
00:38:53,719 --> 00:38:54,560
Speaker 2: It kind of depends.

786
00:38:55,160 --> 00:38:58,200
Speaker 3: But those debt collectors are paid off of commission as well,

787
00:38:58,280 --> 00:39:00,880
Speaker 3: so they're also they're having to feed their families and

788
00:39:00,880 --> 00:39:04,480
Speaker 3: they're feeling the same burdens of the people that they're

789
00:39:04,520 --> 00:39:07,440
Speaker 3: collecting from. So some of the things that they'll do,

790
00:39:07,880 --> 00:39:09,640
Speaker 3: and again, you have to know who you're talking to,

791
00:39:09,760 --> 00:39:12,960
Speaker 3: because if it is a collection agency, you have to

792
00:39:13,000 --> 00:39:16,440
Speaker 3: really look at they're going to use words like my

793
00:39:16,520 --> 00:39:18,760
Speaker 3: client has the right to attempt to attach your wages

794
00:39:18,800 --> 00:39:21,839
Speaker 3: and things like that, and their client does because they

795
00:39:22,200 --> 00:39:24,760
Speaker 3: are the original bank. But if you're just a collection agency,

796
00:39:24,800 --> 00:39:27,520
Speaker 3: you're not in a position to sue that client. So

797
00:39:27,560 --> 00:39:30,680
Speaker 3: it's just those things that they try to do. Also

798
00:39:30,719 --> 00:39:31,880
Speaker 3: that embarrassment.

799
00:39:31,400 --> 00:39:32,840
Speaker 1: Backs like fake legal threats.

800
00:39:32,920 --> 00:39:35,719
Speaker 3: Essentially, yeah, essentially it is, but it's all about the

801
00:39:35,760 --> 00:39:37,759
Speaker 3: wording because it's not really a legal threat if they

802
00:39:37,800 --> 00:39:40,880
Speaker 3: say my client has the right to sure, the creditor

803
00:39:40,920 --> 00:39:42,080
Speaker 3: does have a right to do.

804
00:39:41,960 --> 00:39:44,040
Speaker 2: That, but that doesn't mean that they're going to do that.

805
00:39:44,320 --> 00:39:46,040
Speaker 3: So now if they come right out and say, hey,

806
00:39:46,040 --> 00:39:47,919
Speaker 3: we're going to sue you and they don't have that right,

807
00:39:48,000 --> 00:39:50,799
Speaker 3: then that's the violation of the FDCPA, and that's something

808
00:39:50,880 --> 00:39:55,080
Speaker 3: that you should hire an FDCPA attorney about. So it's

809
00:39:55,120 --> 00:39:56,880
Speaker 3: really about that wording and that they're going to use

810
00:39:56,920 --> 00:39:59,239
Speaker 3: and give you that impression, and then there's also that

811
00:39:59,320 --> 00:40:03,280
Speaker 3: embarrassment right. So especially if you live in a rural area,

812
00:40:03,560 --> 00:40:05,640
Speaker 3: like my last name is Samara, it's not a very

813
00:40:05,640 --> 00:40:07,520
Speaker 3: common name in my area, so they may try to

814
00:40:07,520 --> 00:40:10,759
Speaker 3: call same last names in your area, hoping that you

815
00:40:10,760 --> 00:40:12,560
Speaker 3: know they're going to reach a family member and leave

816
00:40:12,600 --> 00:40:14,880
Speaker 3: their name and number. You know, I'm Johanna, I'm calling

817
00:40:14,920 --> 00:40:18,160
Speaker 3: with a collection agency and name their collection agency. And

818
00:40:18,239 --> 00:40:21,120
Speaker 3: so their family then is going to start to ask questions,

819
00:40:21,280 --> 00:40:23,640
Speaker 3: or they're going to call your place of employment and

820
00:40:23,719 --> 00:40:26,760
Speaker 3: call your human resources department and act like they're verifying

821
00:40:26,760 --> 00:40:30,520
Speaker 3: your employment for a legal reason, right, and then leave

822
00:40:30,560 --> 00:40:33,080
Speaker 3: a message with that HR department or leave a message

823
00:40:33,120 --> 00:40:35,520
Speaker 3: with your boss. So again it's that embarrassment factor if

824
00:40:35,520 --> 00:40:38,360
Speaker 3: you're getting those collection calls, and people should be aware.

825
00:40:38,080 --> 00:40:39,239
Speaker 1: And are they allowed to do that?

826
00:40:39,719 --> 00:40:42,359
Speaker 3: They are, so unless you ask them to stop calling

827
00:40:42,400 --> 00:40:44,920
Speaker 3: you at your place of employment, they are allowed to

828
00:40:44,960 --> 00:40:45,520
Speaker 3: call you there.

829
00:40:46,080 --> 00:40:47,959
Speaker 1: So again okay, but if you ask them to stop,

830
00:40:47,960 --> 00:40:48,319
Speaker 1: they have to.

831
00:40:48,360 --> 00:40:49,040
Speaker 2: Yeah, they have to.

832
00:40:49,400 --> 00:40:52,520
Speaker 1: And they are also certain hours of the day that

833
00:40:52,600 --> 00:40:55,400
Speaker 1: you can say, don't call me before then before what

834
00:40:55,560 --> 00:40:57,280
Speaker 1: eight am or after nine pm?

835
00:40:57,400 --> 00:40:58,840
Speaker 2: Right right? Exactly?

836
00:40:59,200 --> 00:41:00,960
Speaker 3: Yeah, So those are the things that you really have

837
00:41:01,000 --> 00:41:04,239
Speaker 3: to listen to, are pay attention to and if you

838
00:41:04,320 --> 00:41:06,320
Speaker 3: and you need to make sure like the original creditor,

839
00:41:06,360 --> 00:41:09,600
Speaker 3: they the FDCPA doesn't actually apply to them. So the

840
00:41:09,680 --> 00:41:13,200
Speaker 3: FDCPA only applies to third party collection agencies. So you

841
00:41:13,239 --> 00:41:15,680
Speaker 3: could tell you your original creditor, Hey, don't call me

842
00:41:15,719 --> 00:41:18,080
Speaker 3: at work, but they could still do that. Most of

843
00:41:18,120 --> 00:41:21,759
Speaker 3: the original creditors are going to stop calling you. You

844
00:41:21,840 --> 00:41:24,239
Speaker 3: still have those buy here, pay here things that are

845
00:41:24,360 --> 00:41:26,640
Speaker 3: probably going to call you, those payday loans, that.

846
00:41:26,600 --> 00:41:27,719
Speaker 2: Type of stuff that's out there.

847
00:41:28,440 --> 00:41:31,360
Speaker 3: But for the most part, most original creditors do follow

848
00:41:31,400 --> 00:41:33,480
Speaker 3: the FDCPA or.

849
00:41:33,400 --> 00:41:34,399
Speaker 2: If it's a business debt.

850
00:41:34,719 --> 00:41:38,600
Speaker 3: Business debt is a whole other gambit on collection laws.

851
00:41:38,680 --> 00:41:42,120
Speaker 1: Okay, what consumers need to know about the statute of

852
00:41:42,200 --> 00:41:46,400
Speaker 1: limitations because I think some people maybe are hoping that

853
00:41:46,480 --> 00:41:50,200
Speaker 1: they can they can just wait it out like is

854
00:41:50,200 --> 00:41:53,160
Speaker 1: is like if I just wait seven years, will will

855
00:41:53,160 --> 00:41:55,880
Speaker 1: they get off my back? And then this debt eventually

856
00:41:55,880 --> 00:41:59,120
Speaker 1: goes away? You know? Is there any truth to that?

857
00:41:59,160 --> 00:42:00,000
Speaker 2: There is some truth to that.

858
00:42:00,160 --> 00:42:03,440
Speaker 3: So the statute of limitations, depending on the state regulations

859
00:42:03,480 --> 00:42:05,680
Speaker 3: in your areas, some are as little as I think

860
00:42:05,719 --> 00:42:09,160
Speaker 3: four years. That seven year mark is really about the

861
00:42:09,160 --> 00:42:11,080
Speaker 3: time that it falls off your credit, so seven years

862
00:42:11,080 --> 00:42:13,480
Speaker 3: from the date of the last payment. But pay attention

863
00:42:13,520 --> 00:42:15,759
Speaker 3: to that statute of limitations. Maybe you were out of

864
00:42:15,800 --> 00:42:18,680
Speaker 3: work for medical reasons for three years, and the statute

865
00:42:18,680 --> 00:42:23,319
Speaker 3: of limitations in your area is four years. However, though,

866
00:42:23,360 --> 00:42:25,600
Speaker 3: if a creditor does sue you and they are able

867
00:42:25,640 --> 00:42:28,520
Speaker 3: to obtain judgment, they can continue to renew that judgment

868
00:42:28,640 --> 00:42:30,560
Speaker 3: and then when you do find it in a job,

869
00:42:30,600 --> 00:42:33,759
Speaker 3: they could potentially execute on that judgment. So statute of

870
00:42:33,840 --> 00:42:36,600
Speaker 3: limitations is a real thing. It does happen. I don't

871
00:42:36,680 --> 00:42:40,040
Speaker 3: encourage people to do that just because collection activity is

872
00:42:40,080 --> 00:42:42,000
Speaker 3: going to continue that whole time. You're going to continue

873
00:42:42,000 --> 00:42:44,400
Speaker 3: with bad credit. So if you have the ability to

874
00:42:44,440 --> 00:42:47,000
Speaker 3: repay your creditors, you should probably attempt to work with them.

875
00:42:47,239 --> 00:42:49,200
Speaker 1: When you said, from the date of the last payment.

876
00:42:49,239 --> 00:42:52,520
Speaker 1: And isn't that sometimes a tool of the trade that's

877
00:42:52,640 --> 00:42:55,399
Speaker 1: used is to get you to make just a one

878
00:42:55,640 --> 00:42:59,960
Speaker 1: time payment, even if it's for a small amount, because

879
00:43:00,200 --> 00:43:03,359
Speaker 1: then it restarts that clock ticking. And so you think

880
00:43:03,400 --> 00:43:05,640
Speaker 1: I've just done a good job. You know, I gave

881
00:43:05,680 --> 00:43:08,200
Speaker 1: them twenty or fifty or one hundred bucks. Yeah, and

882
00:43:09,120 --> 00:43:11,839
Speaker 1: ultimately what you've done is you've you've kicked the can

883
00:43:12,080 --> 00:43:14,360
Speaker 1: much further down the road as to win. Statute of

884
00:43:14,360 --> 00:43:16,960
Speaker 1: limitations of apply. Statute of limitations.

885
00:43:16,520 --> 00:43:20,640
Speaker 3: Applies absolutely so it could be that ten dollars payment

886
00:43:21,480 --> 00:43:24,440
Speaker 3: and now that statute of limitations reset.

887
00:43:24,840 --> 00:43:25,720
Speaker 2: The other thing that.

888
00:43:25,760 --> 00:43:28,000
Speaker 3: Debt purchasers try to do is they do try to

889
00:43:28,000 --> 00:43:32,440
Speaker 3: collect on accounts that are outside of the statute. So

890
00:43:32,800 --> 00:43:35,600
Speaker 3: a consumer needs to be understanding, you know, contact somebody

891
00:43:35,640 --> 00:43:39,160
Speaker 3: like MMI or contact an attorney to understand the statute

892
00:43:39,160 --> 00:43:41,279
Speaker 3: of limitations and whether you should pay on that debt

893
00:43:41,360 --> 00:43:43,400
Speaker 3: or not. If it's no longer on your credit report,

894
00:43:43,480 --> 00:43:46,960
Speaker 3: that's probably a good rule of thumb that hey, this

895
00:43:47,080 --> 00:43:50,640
Speaker 3: is probably out of the Statute of Limitations. But just

896
00:43:50,640 --> 00:43:53,239
Speaker 3: being out of statute doesn't prevent collection activity. It just

897
00:43:53,280 --> 00:43:55,960
Speaker 3: prevents your legal right to have to repay that debt.

898
00:43:56,160 --> 00:43:58,200
Speaker 1: All right, Well, tell me what else do we need

899
00:43:58,239 --> 00:44:01,719
Speaker 1: to know about formal that settlement that we haven't covered yet.

900
00:44:02,120 --> 00:44:04,759
Speaker 3: So I think that the biggest thing that people need

901
00:44:04,800 --> 00:44:08,319
Speaker 3: to understand about settlement and whether it's right for them,

902
00:44:08,520 --> 00:44:11,760
Speaker 3: and you know, understanding going with a for profit versus

903
00:44:11,760 --> 00:44:15,920
Speaker 3: a nonprofit is really making sure that they understand everything

904
00:44:15,960 --> 00:44:18,120
Speaker 3: that comes with it, because there are pitfalls of being

905
00:44:18,200 --> 00:44:20,560
Speaker 3: enrolled in a settlement program, especially if you weren't in

906
00:44:20,640 --> 00:44:21,799
Speaker 3: default when you got there.

907
00:44:22,440 --> 00:44:23,440
Speaker 2: So I like to call it the.

908
00:44:23,400 --> 00:44:27,560
Speaker 3: TLC tax is legal and credit. So if you weren't

909
00:44:27,560 --> 00:44:30,680
Speaker 3: past due with your creditors, and a company is telling

910
00:44:30,719 --> 00:44:33,040
Speaker 3: you to do a strategic default, you're going to take

911
00:44:33,040 --> 00:44:35,880
Speaker 3: that credit impact. Just know that that is going to happen,

912
00:44:36,400 --> 00:44:38,640
Speaker 3: and that there is no way for them to prevent

913
00:44:38,760 --> 00:44:41,719
Speaker 3: legal action. So your creditor can choose to sue you

914
00:44:41,840 --> 00:44:46,239
Speaker 3: at any time. Typically in the for profit space, we

915
00:44:46,280 --> 00:44:50,279
Speaker 3: would see about fifty percent of our consumers receive at

916
00:44:50,360 --> 00:44:54,040
Speaker 3: least one lawsuit or more. So that is a significant impact.

917
00:44:54,080 --> 00:44:57,840
Speaker 3: And if that for profit agency does not have some

918
00:44:57,920 --> 00:45:00,080
Speaker 3: type of legal model to help you out with that

919
00:45:00,120 --> 00:45:03,360
Speaker 3: in case you are sued, it's probably not an agency

920
00:45:03,400 --> 00:45:06,160
Speaker 3: that you want to be with. And again that the

921
00:45:06,200 --> 00:45:08,000
Speaker 3: fees that are going to be very high. But that

922
00:45:08,360 --> 00:45:11,880
Speaker 3: other part of the TLC is taxes. So any settlement

923
00:45:11,920 --> 00:45:14,240
Speaker 3: savings of six hundred dollars or more could we reported

924
00:45:14,239 --> 00:45:16,640
Speaker 3: to the IRS as income. But also so can a

925
00:45:16,719 --> 00:45:19,239
Speaker 3: charge off. Right if they decided that they're going to

926
00:45:19,280 --> 00:45:21,319
Speaker 3: do charge off an account, they could still send you

927
00:45:21,360 --> 00:45:23,920
Speaker 3: a ten ninety nine. But those our significant things that

928
00:45:23,920 --> 00:45:26,799
Speaker 3: people need to be aware of when enrolling in a

929
00:45:26,800 --> 00:45:30,200
Speaker 3: settlement program. But again, our consumers are already here at MMI,

930
00:45:30,239 --> 00:45:32,359
Speaker 3: they're already down that path. We would prefer to work

931
00:45:32,360 --> 00:45:35,560
Speaker 3: with your creditors why you're still current and get you

932
00:45:35,960 --> 00:45:38,840
Speaker 3: a lower interest rate or get you some significant savings

933
00:45:38,880 --> 00:45:39,640
Speaker 3: on that account.

934
00:45:40,120 --> 00:45:44,120
Speaker 1: And a lot of people think are just assume that

935
00:45:44,600 --> 00:45:47,320
Speaker 1: bankruptcy is the right path forward, or it's the best pathward,

936
00:45:47,440 --> 00:45:50,920
Speaker 1: or it's the easiest path to getting rid of the

937
00:45:51,000 --> 00:45:53,320
Speaker 1: overwhelming amount of debt that they have in their lives.

938
00:45:53,920 --> 00:45:56,319
Speaker 1: Talk to me about that assumption and how often is

939
00:45:56,320 --> 00:45:59,480
Speaker 1: that an accurate assumption or do most people actually have

940
00:46:00,080 --> 00:46:03,640
Speaker 1: better options through a debt management plan or a debt settlement.

941
00:46:04,120 --> 00:46:06,600
Speaker 3: Yeah, so I think that the debt management plans or

942
00:46:06,640 --> 00:46:10,040
Speaker 3: the debt settlement plans are really kind of a way

943
00:46:10,080 --> 00:46:13,319
Speaker 3: to go. Again, it all depends on if they're below

944
00:46:13,360 --> 00:46:15,520
Speaker 3: that media and income in their state to file for

945
00:46:15,560 --> 00:46:18,120
Speaker 3: that Chapter seven and be able to just get rid

946
00:46:18,160 --> 00:46:20,799
Speaker 3: of the debt. A Chapter thirteen is still going to

947
00:46:20,880 --> 00:46:24,040
Speaker 3: be a repayment of your entire debt, and you're still

948
00:46:24,040 --> 00:46:25,839
Speaker 3: going to have that bankruptcy on your record. You know,

949
00:46:25,960 --> 00:46:28,120
Speaker 3: it's not like it's just on there for seven years.

950
00:46:28,160 --> 00:46:29,359
Speaker 3: If you think about it. When you go to get

951
00:46:29,360 --> 00:46:31,960
Speaker 3: a mortgage, they ask you, have you ever filed for bankruptcy?

952
00:46:32,160 --> 00:46:34,319
Speaker 3: Not having filed in the last seven years, and so

953
00:46:34,400 --> 00:46:36,319
Speaker 3: that's some of those things because you're still going to

954
00:46:36,320 --> 00:46:38,600
Speaker 3: be have to be on a budget, have to make

955
00:46:38,600 --> 00:46:41,520
Speaker 3: a payment to the trustee of the court, and if

956
00:46:41,560 --> 00:46:44,000
Speaker 3: you don't make that payment, then there's you know, significant

957
00:46:44,040 --> 00:46:46,359
Speaker 3: legal ramifications and you're still back to where you were.

958
00:46:47,200 --> 00:46:49,600
Speaker 3: So I would definitely say it is an option that's

959
00:46:49,680 --> 00:46:52,080
Speaker 3: viable out there for people, but they need to understand

960
00:46:53,320 --> 00:46:54,760
Speaker 3: what chapter that they qualify.

961
00:46:55,400 --> 00:46:59,080
Speaker 1: Okay, Johanna, this has been super informative. We got in

962
00:46:59,200 --> 00:47:03,640
Speaker 1: depth on debt payoff today, so I really appreciate you

963
00:47:03,680 --> 00:47:06,120
Speaker 1: taking the time to join me. Where where can how

964
00:47:06,120 --> 00:47:08,880
Speaker 1: do money listeners go to find out more about MMI

965
00:47:08,920 --> 00:47:10,080
Speaker 1: and what MMI offers.

966
00:47:10,680 --> 00:47:13,840
Speaker 3: They can go to our website, so money Management dot.

967
00:47:13,719 --> 00:47:16,200
Speaker 1: Org, okay, and just start messing around. There is this

968
00:47:16,400 --> 00:47:20,360
Speaker 1: like typically are people going in person? Is this virtual? Like?

969
00:47:20,400 --> 00:47:22,280
Speaker 1: What should they expect if they go to their website

970
00:47:22,280 --> 00:47:22,960
Speaker 1: and they look for help.

971
00:47:23,760 --> 00:47:25,759
Speaker 3: So if they go to our website and look for help,

972
00:47:25,800 --> 00:47:28,640
Speaker 3: you're gonna see all of our different programs on there

973
00:47:28,719 --> 00:47:31,880
Speaker 3: that we offer. You could actually try to do some

974
00:47:32,040 --> 00:47:34,359
Speaker 3: online counseling. We do have that available, so you can

975
00:47:34,400 --> 00:47:37,960
Speaker 3: go through an online counseling process, and we can try

976
00:47:37,960 --> 00:47:39,880
Speaker 3: to figure out what's working best for you, help you

977
00:47:39,920 --> 00:47:44,640
Speaker 3: through a budget, give you some resources to maybe contact

978
00:47:44,680 --> 00:47:47,680
Speaker 3: in your area. And then if that online counseling experience,

979
00:47:47,719 --> 00:47:49,839
Speaker 3: you're still wanting to know more information, you can talk

980
00:47:49,880 --> 00:47:52,600
Speaker 3: to a live counselor you can chat with us as

981
00:47:52,640 --> 00:47:54,920
Speaker 3: well if you don't want to talk to somebody on

982
00:47:54,960 --> 00:47:57,359
Speaker 3: the phone. But we do have counselors available pretty much

983
00:47:57,440 --> 00:48:00,320
Speaker 3: twenty four hours a date. Well, actually twenty four hours

984
00:48:00,320 --> 00:48:02,239
Speaker 3: a day, seven days a week except for I think

985
00:48:02,239 --> 00:48:04,759
Speaker 3: three days out of the year, so there's always somebody

986
00:48:04,800 --> 00:48:05,720
Speaker 3: available for you.

987
00:48:05,760 --> 00:48:10,480
Speaker 1: No Christmas Day, sorry people, Yeah, wait till it's twenty six. Awesome, Johannah,

988
00:48:10,480 --> 00:48:12,319
Speaker 1: thank you so much for taking the time to join

989
00:48:12,360 --> 00:48:12,760
Speaker 1: me today.

990
00:48:13,040 --> 00:48:14,440
Speaker 2: Thank you so much for having me.

991
00:48:15,880 --> 00:48:18,280
Speaker 1: Ooh all right. Fun to hear kind of the ins

992
00:48:18,480 --> 00:48:23,719
Speaker 1: and outs of the debt collection consolidation industry. And Johanna's

993
00:48:23,760 --> 00:48:26,759
Speaker 1: been in that industry for a long long time. She's

994
00:48:26,760 --> 00:48:30,400
Speaker 1: seen a lot of things, and so I just appreciate

995
00:48:30,480 --> 00:48:34,920
Speaker 1: her sharing her wisdom and insight. And I think when

996
00:48:34,960 --> 00:48:37,759
Speaker 1: it comes down to it, yeah, there are there are

997
00:48:37,800 --> 00:48:41,640
Speaker 1: ways to diy this right, Like, you can even try

998
00:48:41,680 --> 00:48:44,680
Speaker 1: to approach debt settlement on your own directly with the creditor.

999
00:48:45,200 --> 00:48:49,520
Speaker 1: But man working with a nonprofit, don't listen to the

1000
00:48:49,560 --> 00:48:54,040
Speaker 1: ads right from the for profit companies that purport they're

1001
00:48:54,040 --> 00:48:56,440
Speaker 1: going to help you settle your debt for pennies on

1002
00:48:56,480 --> 00:49:00,439
Speaker 1: the dollar. They're often not as helpful. They charge more,

1003
00:49:00,800 --> 00:49:03,640
Speaker 1: and the nonprofits are just better at this. And so

1004
00:49:04,080 --> 00:49:09,719
Speaker 1: MMI is not the only nonprofit that exists, but it is.

1005
00:49:10,120 --> 00:49:13,000
Speaker 1: It's a great place to turn. And so I guess

1006
00:49:13,040 --> 00:49:14,800
Speaker 1: I just want people to know too that that getting

1007
00:49:14,800 --> 00:49:19,120
Speaker 1: help and paying that money is actually worth It's worth

1008
00:49:19,120 --> 00:49:22,920
Speaker 1: the money because of those relationships that Johanna described that

1009
00:49:23,080 --> 00:49:28,560
Speaker 1: MMI has with creditors. Think about that debt management plan. Yeah,

1010
00:49:28,560 --> 00:49:30,120
Speaker 1: you're paying one hundred percent of your debt back, but

1011
00:49:30,520 --> 00:49:34,560
Speaker 1: if your interest rate gets cut significantly, right, well, that

1012
00:49:34,680 --> 00:49:36,680
Speaker 1: impacts how quickly you can pay that debt back off

1013
00:49:37,040 --> 00:49:40,080
Speaker 1: and try to get that deal. If you going directly

1014
00:49:40,120 --> 00:49:43,000
Speaker 1: through them, it's gonna be much harder, like good luck, right. So,

1015
00:49:43,160 --> 00:49:46,000
Speaker 1: the fact that you're working with a big organization that

1016
00:49:46,239 --> 00:49:50,520
Speaker 1: has a great reputation out there and they've helped you know,

1017
00:49:50,560 --> 00:49:53,160
Speaker 1: tens of thousands of consumers in the past do this

1018
00:49:53,280 --> 00:49:56,640
Speaker 1: very thing. Well, the Bank of America's capital ones of

1019
00:49:56,640 --> 00:49:59,600
Speaker 1: this world are just more likely to work with a

1020
00:49:59,640 --> 00:50:04,120
Speaker 1: client of INMI than with just insert name here, right,

1021
00:50:04,239 --> 00:50:06,960
Speaker 1: So don't stick your head in the sand. There is

1022
00:50:07,040 --> 00:50:10,400
Speaker 1: help out there. If you find yourself in debt up

1023
00:50:10,440 --> 00:50:13,800
Speaker 1: to your eyeballs, and if you have a friend or

1024
00:50:13,880 --> 00:50:16,759
Speaker 1: relative who you know is struggling with this and they've

1025
00:50:16,800 --> 00:50:19,000
Speaker 1: been kicking the can down the road and they don't

1026
00:50:19,000 --> 00:50:22,840
Speaker 1: know they don't know where to turn or how to proceed,

1027
00:50:23,239 --> 00:50:25,600
Speaker 1: then I would just say share this episode with them,

1028
00:50:25,920 --> 00:50:30,640
Speaker 1: share them Money Management International website with them, and just

1029
00:50:31,360 --> 00:50:33,680
Speaker 1: let them know that there are they don't have to

1030
00:50:33,880 --> 00:50:36,640
Speaker 1: kind of continue in the direction they're going. There is

1031
00:50:36,680 --> 00:50:38,840
Speaker 1: a way to turn the ship around, slowly but steadily.

1032
00:50:39,040 --> 00:50:40,960
Speaker 1: Like we've talked about before on the show, you don't

1033
00:50:40,960 --> 00:50:44,640
Speaker 1: get into debt overnight. Often take often it takes many,

1034
00:50:44,680 --> 00:50:48,440
Speaker 1: many years, and so the reality is you're not going

1035
00:50:48,480 --> 00:50:51,759
Speaker 1: to get out of it overnight either, But you've got

1036
00:50:51,800 --> 00:50:54,120
Speaker 1: to start turning the ship right so you can head

1037
00:50:54,160 --> 00:50:57,080
Speaker 1: in the right direction. And I'm just glad to be

1038
00:50:57,120 --> 00:50:58,960
Speaker 1: able to share that there's help out there and you

1039
00:50:58,960 --> 00:51:00,680
Speaker 1: don't have to go it alone. All right, that's going

1040
00:51:00,719 --> 00:51:01,920
Speaker 1: to do it. For this episode, we'll link to the

1041
00:51:01,920 --> 00:51:04,440
Speaker 1: Money Management International website in the show notes, along with

1042
00:51:04,480 --> 00:51:07,360
Speaker 1: some other resources that we find helpful in terms of

1043
00:51:07,680 --> 00:51:11,480
Speaker 1: debt management, debt payoff. So until next time, best friend out,