Consumer Credit Counseling Services

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Consumer Credit Counseling Services American Financial Solutions a CareOne Credit Provider

Transcript of The I Hate Debt radio show with:
Host: Tom Allen
Guest: Cuba Craig from American Financial Solutions
Segment 1

Tom: I’m Tom Allen. I’m here with Cuba Craig the President and CEO of American Financial Solutions, a CareOne Credit Counseling service provider based in Seattle Washington. American Financial Solutions counsels people on debt management and helps over-extended bill payers develop a strategy to get rid of their debts paid off as quickly as possible. Cuba, I want to talk to you about developing a strategy to get my bills paid off as quickly as possible. But first I’d like to know a little bit about you. What motivates you to help people who are deep in debt? What’s your background? What’s your motivation?

Cuba: Hi Tom.

Tom: Hi.

Cuba: I’m happy to tell you that. I’m the president of American Financial Solutions, as you said, and we started this program four years ago because we wanted to set up a foundation, we’re connected with a community college system in here in Seattle, and any net revenues we that have go to scholarships and that in addition to helping people who are having trouble with their credit is the reason we do this.

Tom: So you help people pay their bills and by doing that you are helping future college students with their education.

Cuba: Precisely

Tom: Wonderful.

Cuba: It is wonderful. It a …it not only is as far as our counselors are concerned it’s not only a great job because every time they hang-up the phone they’ve helped somebody but they also know that they’re helping kids as well. So it’s a great added point to why we do this business.

Tom: What drove you to get involved in the business? Did you have some personal challenges with debt or what exactly was it in your background that said I’m going to help people get out of debt?

Cuba: Well, one of the things about me is that I do a lot of community service work. And American Financial Solutions like all the CareOne agencies are non-profit And it was just a wonderful way for me to do community service work in a way that I could not only help other people but I could help local people as well. Instead of doing the usual non-profit kinds of things the credit counseling agency model helped us do that.

Tom: So you basically saw a need that existed and saw a way to merge the help of helping people with their debts with your community service.

Cuba: Exactly

Tom: And put them both together. This is just a fabulous program. I really had no idea.

Cuba: We’re unique in that regard. I think that you’ll find that most credit counseling agencies are purely that. They were set up to serve as a credit counseling agency and that’s what they do. But we’re unique in that we did put that additional component into our company and we get a lot of satisfaction from it.

Tom: So if you are in debt and you’re considering using a credit counseling service and what to have the added benefit of by doing so having your problem turn into a solution for a young college student American Financial Solutions would be the place to go.

Cuba: It would be the place to go. But that’s not the reason people should call a credit counseling agency.

Tom: All right. That’s just a side benefit.

Cuba: It certainly is but it’s not the primary reason someone should be calling us.

Tom: We want you to call because you want to get out of debt. And what exactly does American Financial Solutions do and how does you debt management plan actually work

Cuba: Well the credit counseling industry was set up Tom, to address the specific needs of people who have credit problems. It was set up in a partnership, if you will, through the Federal government and creditors to have a way to give people who are really having trouble paying their credit card debts an alternative to bankruptcy or collections And so What we’ve done as a credit counseling agency we’ve set up a system where if you have card debt, unsecured debt, and you have found yourself behind in your payments but you still have an income you just simply can’t pay because you’re having a life crisis or the interest rates have gotten so high that the payment are too so high for you to pay them. Then you would call a credit counseling agency and we would sit with you and do a budget. That’s first and foremost. Find out who much you owe. Are you behind in those debts? We go through a budget with you. How are you spending your money? Do you have ways that you could handle your money better? And then if we determine with you that there’s just no way that you can rearrange your budget so that you can start just on your own paying your bills then we set you up on a debt management plan and that means that we put all your unsecured debt on a plan. We have you give us all of your credit cards all of your unsecured debt. And then we determine while were on the phone with you , or you want a face to face you can do that too as well, we determine what that monthly payment would be, tell you there pretty closer to what it will be because we have arraignments with all the creditors we here at AFS We have about 70,000 creditors in our database and we know how they’re going to reduce those interest rates for you and often times they would get rid of the fees and so on you’ve been charged because you were late. And I don’t know if you realize or not and I know that a lot of people don’t realize that if they sign up for a credit card and say it’s at 6%, one of those introductory offers…

Tom: Sure

Cuba: … what they don’t know is it says in the fine print it says that if you miss a payment that you could be charged up to 33% on those card in interest.

Tom: They kind of throw that out like a fishing hook just to get you hooked.

Cuba: Well they don’t do that for that purpose they hope that you make your payments on time and everything. They have to put in something in there for people who are a bad risk.

Tom: They don’t mind charging you 33% cause they’re not required to chare you they could boost your rate charge you 6 to 7 % if they wanted to but not only that but they’re gong to charge you fees late fees and over-the-limit fees too.

Cuba: You’re preaching to the choir here Tom. Yes. But anyway once we get you set up and we figure out and tell you what your payment is its’ usually considerably less if you had to pay each one of them every month at your existing rate. And then we can automatically take that money take that money out of your checking account you tell us what date is convenient for you. Those calls from the collection agencies and the creditors stop and you know that every month we’re going to send a payment to your creditors. And your going to be out of debt so much sooner than if you’d would have if you been paying this minimum payment on these huge bills So that’s basically it. It’s a very simple concept. And that’s exactly how it works.

Tom: Well, Cuba explain to me how the debt management program helps really helps me get out of debt quicker. I know…I can understand that it can help relieve some immediate pressure.

Cuba: Yes

Tom: Because I’m now using a third party to talk to my credit card companies. And the credit card companies who are indeed getting paid.

Cuba: Yes well actually the credit card companies get 100% of their money back. If you will notice well I need to tell your folks who are listening, if they come to a CareOne agency like AFS and they start to sign up on one of these programs they can be assured that they don’t have to pay any upfront fees. And they don’t have to pay maintenance fees and that kind of thing. Because we have agreements with their creditors to pay this money back so the creditors are getting 100% of their principle back plus some interest less than normal but certainly good interest as you said they’re still getting 6, or 7 or 8%

Tom: Okay

Cuba: And then at the end of the month the government has set up credit counseling agencies as non-profits so at the end of the month the creditors literally give us a donation which is a percentage of what we recovered for them during that month. And that’s how credit counseling agencies operate. They get money back every month from the creditors so the creditors win in everyway and so do our clients and so do we. And then we can use that money to operate and help more people and then if we have anything left over here, as I said, here at AFS we’ll use it for scholarships

Tom: So your program is designed for people that have a regular income.

Cuba: You need to have a regular income. And what we do is we sit with you and budget with you to make sure you understand exactly…if somebody says I make $30,000 a year we say yeah but, what are you actually bringing home? Now let’s go over this. Let’s do a budget. How much ..are you eating out three times a week? Are you getting a $3 latte every morning? Which is what we do out here in Seattle.

Tom: Of course.

Cuba: And we go over everything with them. And then after we’ve done that and we’ve put their credit into our computer and come up with what will be really close to what their payment is going to be then we can say to you, you have enough income where you can pay this if you go on a debt management plan or if they’re really in a bad way and believe me Tom there are people in this country right now who are really suffering…

Tom: Yes

Cuba: And if they are to the point that they are really… if they’ve used the credit card to buy groceries and gas or whatever and they simply have too much debt then we have to counsel them to go somewhere else and maybe talk with an attorney about bankruptcy. But we really try to get them to where they don’t have to do that.

Tom: Sure.

Cuba: Because that’s going to show up on their credit for ten years. Bankruptcy is the worst that they can do. If they can at all avoid it and we of course we are a really good alternative to that.

Tom: Well my understanding, Cuba, is that going through a credit counseling service there would also be a mark on the credit report.

Cuba: There, it will be on a credit report that you are in a debt management plan. And what we’re discovering is that before we ever started AFS we understand that there was a time when it was a really bad mark on your credit report. Cause people though well they’re deadbeat they had to get on a debt management plan. And the way the industry is looking at it now is, and that creditors are looking at it now, and mortgage brokers, and car dealers are looking at it more that they okay, they’ve decided they’re going to meet their obligations. They’re going to get on a debt management plan work with their creditors and their credit and their credit counseling agency to reduce their credit so that the can pay that back. And then after a year or so of making these monthly payments that we’re making them for them on time every month then if you go and try to get a mortgage or a car or something that you need for an emergency then that person that company will look at that they’ve and say well they’ve been on a debt management plan for a year and a half or two years look at how they’ve reduced that debt. They’ve made payments every month and they’re mature and responsible enough to take care of their responsibilities instead of just throwing them to bankruptcy. So it’s a different way a doing things and we’re seeing that more and more that’s it’s not a negative it’s showing that you’re a responsible trying to get out of this kind of problem person.

Tom: So what you’re saying is the creditor .and I could not hardly believe that you have 70.000 creditors in your database.

Cuba: Well now you have to understand we have all the major Visa, MasterCard, and Sears and all of those which are huge you know the numbers and then we also have other creditors of unsecured debt it might be a clinic, it might be a hospital it might be your dentist..

Tom: I see.

Cuba: …so we have all of those in the database and if you have someone on your...that you owe that we don’t have in our base our base database…

Tom: You’ll probably put them in there wouldn’t you?

Cuba:…and then we put that in there. So that how over the last few years we’ve managed to get that many. There are a lot of credit card offerers out there.

Tom: Boy you’re right. So you’re saying the creditor that the creditors are going to take a look at a person who’s in a credit counseling service and says that this person understood that they had a problem

Cuba: Yes

Tom:…and they sought professional help

Cuba: Exactly

Tom: They weren’t trying to scam out on any of their bills they weren’t trying to skip out on any of them they faced the problem in a responsible way and are making progress and they’ve been making regular payments. So that even though there’s a mark on the credit report. It’s not as negative as it used to be and of course from my stand point Cuba I’m gonna tell you it’s more important to pay your bills off than to worry about what’s on your credit report.

Cuba: Well that’s absolutely right. And if you set up a plan….Tom if you had eighteen thousand dollars in debt right now and you came to us your interest rate on that if you were behind it means your interest rates are probably 23, 25, 27% as an average. It would take you twenty five or thirty years to pay that off if you just paid the minimum.

Tom: Yes

Cuba: If you get on a management program and those rates are dropped your going to be out of debt in four years.

Tom: Cuba you’re going to come back in our next segment like to let every one know they can get in touch with American Financial Solutions at the end of the segment. Go ahead

Cuba: Okay

Tom: How do we do that?

Cuba: You can get in touch with us in two ways. You can go to the CareOne agencies and just pick one of us and that’s CareOnecredit.com. And my personal website for AFS is debtfixers.com.

Tom: Perfect

Cuba: I can give you a 800 numbers as well

Tom: Alright we’ll get that in the next segment. This segment of I Hate Debt has been brought to you by CareOne Credit Counseling Services. I Hate Debt is not designed to substitute for qualified financial or legal advice. But designed to motive you to get out of debt and stay out of debt More with Cuba Craig coming up on I Hate Debt.

END Listen to segment two here.

Consumer Credit Counseling Services

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