Live Better by Centric CU
Monthly Podcast featuring financial tips from Centric Credit Union
Live Better by Centric CU
Is Debt Relief Really an Option?
Unlock the secrets to financial stability with our latest episode of the Live Better Podcast! Join Kelli Green, Centric's Senior Vice President of Marketing, and Linette Kovach, Solutions Recovery Consultant at Centric Federal Credit Union, as we navigate the complex world of debt relief. Learn how to effectively manage financial challenges, from contacting Centric's Solutions Department for interest reductions and payment adjustments to making informed decisions about significant purchases like vehicles. With the rising cost of living, maintaining flexibility and open communication with financial institutions is more crucial than ever.
Discover the power of being proactive and open-minded. Linette shares invaluable insights into the tailored financial solutions offered by Centric, including debt consolidation loans and free credit counseling, available to both members and non-members. We emphasize the importance of setting up a budget, obtaining a credit report, and staying informed to enhance your financial health. Empower yourself with the knowledge to tackle debt head-on and achieve long-term financial stability. Tune in and take the first step towards a more secure financial future!
Welcome to another episode of the Live Better Podcast, proudly presented by Centric Federal Credit Union. I'm your host and Centric Senior Vice President of Marketing, Kelli Green, and today we're delving into a topic that just about everyone can relate to debt relief. In today's episode we'll discuss debt relief solutions that seem to be the answer to debt woes and, just so you know, not everything we hear advertised is as true and easy and even affordable way to really manage your debt. So, whether you've been a loyal listener or you're joining us for the first time, tune in as we break down complex economic concepts into easy to understand advice. We want you to be empowered to make informed decisions and really stay ahead of today's curve. We don't want you to let anything related to debt woes really derail any dreams that you may have, so let's tackle it together.
Kelli Green:So I want to welcome all of our listeners to another episode of the Live Bitter Podcast. Today we are joined by my sweet friend and solutions recovery consultant here at Centric, Ms. Linette Kovac. Good morning, Kelli. Good morning, I'm so glad you're able to join us today. I'm glad to be here. Yes, so I know we worked together for gosh how many years now. Five, five years so in the solutions department at Centric you want to maybe tell our listeners a little bit about who really, what is the solutions department and what do you do in day in and day out?
Linette Kovac:Okay, well, at Centric, that's what we call our collections department, because we're not just about collecting money, we're about trying to help our members find solutions to the debt problems that they're facing.
Kelli Green:And and there's a lot of them, huh?
Linette Kovac:It is, it is, you know. It's just that times have been difficult and people are really struggling. Groceries have gotten so expensive and like everything is just almost doubled in price at least, so their budget that was working a couple of years ago, you know, is falling short now.
Kelli Green:That's right.
Kelli Green:Well, we've had some conversations with a lot of members. I know that you do this day in and day out, but you know they keep saying they've got a little more month left than their paycheck. Yes, and what do they do just to make ends meet?
Linette Kovac:Yes, well, at Centric you can contact the Solutions Department because we have some options available for our members. We can do some interest reductions, we can reduce payments. We have a lot of different options available to help get that budget down a little bit.
Kelli Green:Yes, the thing is I always want our listeners to remember is, even if they're a member or not a member, talk with us. Let's see what we might be able to do Because, just because you've got this loan and you've agreed to make this one monthly installment, if that gets to be a little too heavy for you, there's always a refinance option to discuss. Even if maybe you can't refinance it at that time, you can still maybe think about switching up your payment a little bit. You can consolidate that down whether you're getting paid weekly or bi-weekly there's ways in which you can modify that payment. A lot of people don't know that's available to them.
Linette Kovac:No, there are a lot of different options available. So always, always, just reach out and ask the question. "Can you help me?
Kelli Green:That's right, because we'll be honest and tell you listen, if we're in a situation where there may not be something that we can do, you may have to just kind of ride it out, weather the storms. I learned I was having a conversation with a sweet friend of mine. She's looking to purchase a vehicle and one of the things is that she's bought her vehicle when the price was inflated. Well, now the prices are going down a little bit. So you know, she's kind of upside down just over $10,000. Oh well, that's a big deal, that's a lot, and so she's just thinking about. You know, I said it would be a better idea for you maybe to think about let's pay this down a little bit right, right and see what you can do well.
Linette Kovac:And the interest rates are a little higher too, that's right. Sometimes it's better to to stay in what where you are, that's right. Um, and do like you said, pay it down and um, get, get things. Get that deficiency balance kind of under control a little bit.
Kelli Green:That's right, because you have to think about what's your motivation, right? So if you're, like you've mentioned, talking about inflation being such an issue and then thinking, man, I really want that new car smell. Well, do you like this car? Does it get you to point A to B, you know, does it look that great? But considering the circumstances and the economy, it may be a better idea just to kind of ride out that storm.
Linette Kovac:I kind of went through that myself a little bit. I did because, you know, life changes and I really wanted to buy a pickup truck and you know, I like to be able to take care of myself and pick up whatever I need to, you know. And so I was looking at them and I was considerate and then I realized that now is not the time.
Kelli Green:You know, and like you've told our listeners to lean on us to help you. You know, Ms. Linette, I'd like for you to lean on us. If you need to borrow a pickup truck, I think I could find somebody to help you out.
Linette Kovac:That's good to know, Kelli!
Kelli Green:Listen, when you bank here at Centric and work here at Centric, you know we try to find ways in which we can really work together, Because we are genuinely a family and we're here to look out for one another.
Linette Kovac:We really are.
Kelli Green:So something I wanted to I know is near and dear to your heart and in fact, it was an idea for you to bring this to our listeners. I love this idea. But talking through debt relief and the consolidation, debt consolidation programs that are out there, right, I know that you have heavy thoughts and opinions about this, as you've walked through this with members and friends.
Linette Kovac:I do. I have members and friends both, that thought that was going to be a good answer for them, and all of them. It's made it worse. It's really made the situation worse. Those companies are there to make money I mean, that's what they're in business for. So they're offering solutions where they can make money and they may not actually help you. You know, get control of that financial situation.
Kelli Green:That's right.
Linette Kovac:A lot of times the fees you know up to 25% of the total debt in fees that they charge. So if you owe $10,000 and you add 25% to that, you've just added a large amount to the debt you actually owe and they collect that. A lot of times they collect money up front. They hold it in an account. They've told you not to contact your creditors, so they may be six months to a year sometimes before they reach out to your creditors to even start paying them, and so your credit score is going down because you're not making your payments, and that's 35 percent of your credit score is your payment history. So it really has a big impact, you know, on your credit score when you start working with those. So a lot of times you end up with a lower score and more debt than you did when you started.
Kelli Green:It ends up hurting you really in the actual present, yes, but more so when you look at it too in the future. It is, it could be really damaging to you. Oh, you've said a few things. I want to make sure that we go back over, because it is so critical for our listeners to understand. So when our members, or any listener that might be considering reaching out to Debt Consolidation, they really need to be aware of the overall cost.
Kelli Green:Yes, so when they're talking with these different solutions you know folks if you will, but this debt consolidation or debt relief programs, when they're speaking to these folks, it really they tee it up so that you think, wow, you're going to go handle it, I just pay you a little something and move on Right, when, in essence, that's not necessarily the case In the big picture, yes. However, they don't go through and discuss with you what is really happening and, as you mentioned, you were just talking about the percentage of timely payments and how that really impacts your credit score. With a delayed payment of 30 days, 60 days, 90 days, that adds up and the implications on your credit score.
Linette Kovac:Well, and not only that. All lenders have criteria for charging off loans. So when the payment has been missed for an extended period of time, then that debt is actually charged off. That has more impact on your credit score. And then you know there's legal collections options available too, so you could end up with a judgment against your property. You know, because of working with those companies and not communicating with your creditors.
Kelli Green:Right, you don't. Your hands are tied. Really, you don't have. If you're, if you're working with a debt relief or debt consolidation companies, they are at you're at the mercy of their timeline. Yes, and you have no idea, really and truly, when they're going to make those payments or when they will even begin conversations with your creditors.
Linette Kovac:That's correct. I've received the powers of attorney six to eight months after they were signed for them to start working with the company. So at that point in time, the damage to your credit score, the late fees that have been charged, the interest that hasn't been paid, it's just, it's just increasing and it's just getting becoming more and more.
Kelli Green:Wow… and one of the things, too, I really want to hit home with that you made a comment about early on was talking about they ask for those funds up front. And so that if you’re ever in a situation where you recognize you think, wow, they've not had communication with my creditors, they've not been talking to them. Maybe the creditor has started to contact the member to say, hey, you know, we've recognized there hasn't been any payment or a period of time and you, as the member, are under the impression that, well, this debt solutions company is taking care of that. If you're as a member, you're in the midst of this. If you decide this isn't really what I thought it was going to be, you're limited on opportunities or really any options that you have to back out of that.
Linette Kovac:Right, because any funds they've collected oftentimes are not returned, even if they haven't dispersed them out. Yeah, that's kept, and you don't see that in the fine print of the documents. You know, you're not aware of that. It's there, and so I had a friend that lost $8,000. That's a lot of money. Yes, yes, so you know it really is not the best solution.
Kelli Green:Well, and the best thing to think about and just to kind of go back through. I have loved this conversation with you, Ms, Linette. I mean, this is something that people are really faced with. Just as our dollar is kind of tightening up, you know, our budget is squeezed to the nth degree. We're getting ready, you know, and just different things that come up, whether it be you're preparing for the holidays, back to school, you know, birthday, whatever that might be, you know, and people think I need quick cash gosh, t his debt is mounting. What do I do? Right, the best thing to think about, you know, is really stay in communication with your creditors. Always maintain that communication with them. It's critical.
Linette Kovac:Yeah, your creditors. They have so many options available, you know, and it's going to vary depending on who your you know who your loan is with, but I know at Centric we have so many options available. We can even do a debt consolidation loan, which actually may be able to put all into one loan some credit card and unsecured debt that you have to get the payment reduced so that you're not having as much monthly go out. That's right. You might be able to actually have a lower interest rate than what you had on your credit cards. So it's very important, Sure, so that you know what's going on with your monthly payments, so that you know what's happening with every one of your creditors, so that you're aware of what the status is of your loan with them.
Kelli Green:And you know, the thing is that we have so many solutions but we have every member, and every member situation is very different and not everyone will qualify for every opportunity that we have. However, do not let that stop you from giving us a call and having a conversation, because that that one call can really open up a plethora of different ideas, just like we talked about earlier. Have a friend of mine wanting to buy a car. It's not the right time for her financially, right, and so you just have to have a, have a conversation and be open minded and don't be afraid of, you know, hearing people say, well, maybe not right now, this is not necessarily what we can do, but here's what we could do in the future. If X, y, z, yes, and so you know, I just, I want, I want our listeners to really lean into you know, and think, gosh, I may not qualify, why would I even call? That's what we're here for, that's what we do.
Kelli Green:You know, we want to be able to talk, talk with our members and discuss different opportunities, because we do know that every situation is a little different. Right, and never stop that conversation, you know, let's just keep going, and even if you've got the slightest question about a loan or any sort of payment, talk with us about that before you sign on with debt solutions or any kind of debt recovery. Yes, let's, let's discuss that, you know, let's really talk through what are things that are going to happen? And it's just been interesting as I've talked and interviewed different people that work here and that really look at different loans and creating opportunities for folks. We try to make it work for our members. Yes, and we have to be bold enough a lot of times and say what you're trying to do or what you're trying to purchase is a little outside the bounds, and I think that's I think for the sake of the member, we want to do what's right for them.
Linette Kovac:Right, we want to guide them. Yeah, we don't want to just lend them money, that's right. We want to guide them into what's going to make their life better. Yes, absolutely, and I know you were talking about not everyone qualifying, but there is one thing Centric offers that everybody qualifies for, and that's our free credit counseling. Absolutely, we have over 60 certified credit counselors at Centric, so everybody, we can help you set up a budget, we can look at your credit report. Absolutely, we can offer a lot of things to, so everybody qualifies for that.
Kelli Green:And the only thing it costs you is a little bit of time. That's it. Yeah, so when you're visiting with our credit counselors, that's something you can do in person, over the phone or even via Zoom, a virtual conversation, and so, through that, just for our listeners to understand what does a financial counseling session look like, you get a copy of your budget. We can work that up for you. Comprehensive budget. You'll see each and every item. As long as you provide that information to us, we can put that down on an Excel sheet for you. You can manage that whichever platform you want to manage that on.
Kelli Green:And then, in addition to that, you get a free copy of your credit report, and everybody is due a single copy of their credit report on an annual basis. So I highly advise just even if you do that once a year, just to make sure everything that you're paying is reported correctly. Even so, take a look at the trade lines. Is there anything that's been opened that you're not aware of? And that's just for basic, you know, identity theft and security precautions too, right, so well, Ms. Linette, this really wraps up our conversation today, and I just thank you so much for being here with us.
Linette Kovac:Well, I've enjoyed it, KellI. Yeah, I really have a passion to help our members and this was, a way, something I saw that they were really struggling with. So I'm glad to have the opportunity to get the information out there so people can make better decisions.
Kelli Green:Thank you for being so proactive in bringing this topic to the surface, because if you don't see it or experience it day in and day out, it's almost very foreign, and I just appreciate you bringing this up. Well, you're welcome. Yes, this is great.
Kelli Green:Well, so that brings us to the end of this episode of your Live Better podcast and we hope you found today's conversation about debt relief solutions to be insightful.
Kelli Green:In the world of personal finance, knowledge is truly your greatest asset, and Centric remains your steadfast partner in that journey. If this episode resonated with you, we kindly ask you to show your support. Please hit the subscribe button, share this episode with your friends and family and take a moment to leave us a review. Your input is invaluable in shaping the content that addresses your financial interests and needs. And, of course, let's stay connected on social media. You can find us on Facebook, at CentricFCU and on all other platforms under MyCentric. Stay in the loop regarding the latest financial insights and resources tailored to your unique financial aspirations. Until our next episode, always remember, Centric is by your side as you navigate your financial journey. Thank you so much for tuning in today to the Live Better podcast.