KTNV Las Vegas: Watch for these red flags when getting help with debt
MMI's Thomas Nitzsche and MMI client Jackie Upshaw join KTNV Las Vegas to discuss credit card debt and how to find safe, effective, and affordable relief.
Transcription:
The pandemic has proven to be a real financial hardship for so many Americans but you shouldn't have to live in fear of debt collection calls. Tricia Kean speaks with a financial expert about getting help.
“Without a doubt! I had no idea it was that much.” Jackie Upshaw was shocked to see her credit card debt. “I mean because I'm paying my bills. None of them had ever been late.”
But only paying the minimum wasn't helping. Jackie managed to put herself in a $22,000 hole using 18 different cards. “It was so easy I mean I had pretty good credit so I was getting credit cards left and right. And it just got out of hand.” That's when Jackie decided to get professional help.
So somebody's watching right now and they're in a lot of debt and they feel like they're drowning in debt. What’s the first thing they should do?
“The first step is really to understand what's happening, because many of the clients we work with have never done a monthly budget.” Thomas Nitzsche with Money Management International, or MMI, says Jackie's case isn't unusual. Many people never take time to come up with a spending plan.
“Just understanding what's coming in, what's going out; it’s actually very basic but it's surprising how many people don't do it.”
Jackie admits she was one of them. MMI helped her develop a budget and then consolidate her debt.
“They go and see and talk to creditors to see if they can get the interest rates down to zero or something under 10% and, and it works.”
Just be careful about who you hire if you're looking for help. Take time to do your research, and be aware of three major red flags:
The first is any company claiming they'll settle your debt for pennies on the dollar.
“The second is if they tell you to stop paying your creditors and don't talk to them anymore.”
The third red flag is any company asking for an upfront fee to improve your credit or make your debt go away.
Places like MMI offer non-profit financial education and counseling.
Now how do you make your money?
“So a couple of ways: for clients who enter into a debt management plan there is a nominal client fee of about $24 a month." Creditors also pay a fee. It's called a fair-share payment and it goes to agencies like MMI providing debt consolidating programs.
“It's 100% confidential, there's no judgment, and what we usually hear from our clients is that I wish I would have talked to you sooner. I don't know why I was so afraid.”
Jackie says if you’re struggling to pay off your debt or only making minimum payments it's time to face reality.
“There's no shame in owning up [to] the fact that, all right yeah, I went a little far overboard and now I got this debt and I need to figure out how to pay it off.”
For 13 Action News, I'm Tricia Kean.
And Jackie is happy to report she's paid off all her credit card debt. She's also improved her credit score by more than 100 points. We have more information on MMI [at] ktnv.com/debtfree
We'll be right back.
