WMAR Baltimore: MMI client wins Brighter Financial Future Award

MMI debt management plan client, Johnika Dreher, is recognized with the 2022 NFCC Brighter Financial Future Award.

Transcription:

Inflation and interest rate hikes are making it a lot harder for people with credit card debt to pay off their balances. WMAR 2 News Mallory Sofastaii tells us about a program that's helping people get out of the red without taking out more loans.

Because if it matters to you, it's a matter for Mallory.

Maybe you feel like you're not making progress paying down debt or charges keep accumulating. Debt management is one way to get back on track and the discipline needed for the plan helped a local woman pay off over seventy thousand dollars in debt and drop over 50 pounds.

This is financial freedom for Johnika Dreher.

"I feel like confetti."

But it took a commitment to get here. Four years ago she felt buried by debt.

"I had approximately $70,000 worth of debt."

The amount spread onto eight different cards accumulated in just a few years.

“We walk into this home that's so huge we had to furnish it. Our son was two. All these new things that we have to get and we just saw things balloon."

The crushing feeling of this debt became overwhelming, so Johnika talked with her bank who recommended Money Management International, a non-profit credit counseling service.

“In a debt management program, the creditors were agreed to reduce the interest rates down to an average of about 6.4% and have people on a plan to be out of debt within about four years on average.”

It's different from debt consolidation where you take out a loan to pay off debt and interest rates vary based on your credit. And it's not debt settlement or bankruptcy which can damage your credit.

“Because there is such greater awareness of round loans that is typically what most people gravitate towards just because they know it exists. But functionally a debt management plan is much the same thing where you make one fixed monthly payment."

The interest rate is reduced to that lower, is fixed at that reduced lower interest rate and it lasts for a maximum of 60 months but the average client is on it for 48 months. It took Johnika 49 months to pay it all off. Her interest rates were reduced to an overall average of nine percent negotiated by Money Management International, saving her an estimated $120,000.

"They take the guesswork out of it and really just tell you tell us what you owe. We're going to go behind the scenes. We're going to configure a payment plan for you. We're going to work out all the logistics of letting the providers know that this is what you're doing.”

Johnika had to give up all of her credit cards and refrain from opening any new lines of credit. MMI also charges set up and monthly fees. Their fee is so minimal and it's built in. I think it was less than $50 a month. The sacrifice is and discipline yielded lifestyle changes for Johnika, helping her shed weight financially and physically.

"I dropped 55 pounds by the time I went to my next physical. It's just different ways that you mentally shift your mind to think about what's happening. What do I want? What do I value? And I started to look at money a lot differently. When you don't have it to lean on, you gotta lean on some other things. So exercise got me through."

While the Federal Reserve raised interest rates twice this year, these hikes do not impact agreements creditors have with consumers who go through non-profit debt management. However, if a customer fails to make a payment, the creditor can drop out of the plan.

For WMAR 2 News, I'm Mallory Sofastaii.

Money Management International wishes to congratulate our client Johnika Dreher and all of the incredible MMI staffers who supported Johnika's journey on this year's NFCC Brighter Financial Future Award.