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Clean Slate Podcast – Episode 8

In episode 8 of Clean Slate Podcast, Juan talks about why it makes more sense to go with CreditGuard as opposed to a hardship program.


About the Speaker:Juan Valladares

Juan Valladares is the Vice President of CreditGuard of America, Inc. and has been working in the credit counseling industry since 1997.

Juan began his career at a major answering service center, responsible for the training and supervision of over two hundred employees. Now in charge of managing CreditGuard’s counseling department, Juan’s management, organizational and motivational skills are all vital to the company’s success.

Juan is a devoted father of two and a passionate racquetball player who competes regularly to satisfy his competitive instincts. He has dedicated his professional life to helping people get out – and stay out – of debt.


“Clean Slate” Podcast Episode 8: CreditGuard versus Hardship Programs

Wayne: I heard about one time, someone was telling me about this, I was like ‘Oh, I’m going to be recording this really great thing with CreditGuard,’ and they were like ‘Oh is like a credit hardship program?’ And I was like ‘I don’t think . . . that’s the case’ (Laughing) But I was like well I have to ask him this question. How does CreditGuard compare to, say, a credit hardship program? Can people with serious, serious issues and hardships benefit from the program as well? Does it get that customized?

Juan: Yeah. Hardship programs . . . we’ve heard this so many times and we’ve had consumers give us a call and say ‘Hey, this creditor offers a hardship program, how does your program differ from their program,’ and things like that. There are always so many different types of comparisons, and we get the phone calls all the time– it’s just all over the place.

But when it comes to hardship programs, and I use the credit cards as an example, most consumers usually have about five credit cards; the average debt load in credit cards now I think is approximately $16,000 or something to that respect that goes up depending on the economy.

Wayne: Right–

Juan: But at the end of the day, with five creditors you’re starting to fall behind and you pick up one of the creditors, your MasterCard, and you contact your MasterCard company and you say ‘Hey, do you offer any hardship programs?’ And they say, ‘Yes, we offer hardship programs. We’ll lower your interest rates, maybe lower your monthly payments but it’s only for six months.’ Then they contact their Visa and they say ‘No. I don’t fall for any hardship programs because of your credit performance, because you’re starting to fall behind. Give us our money now. Oh, and by the way, we’re raising your interest rates from 29% to 32% or whatever it is.’

So, as they contact each one of these creditors individually, they may or may not get some benefits, and for the most part these hardship programs are short term. They’re never a long-term solution for the individuals. In addition to that, it’s just a lower interest rate and maybe a lower payment. There’s no education behind it. There’s no change of lifestyle. There’s no restructuring of their finances.

Those hardship programs that you get from the individual creditors are not taking the time to sit with you and say, ‘Hey! Let’s gather your information, let’s see where your money is going, let’s see what your goals are, let’s see how we can get you out of debt and start creating some good habits that I know can help manage your finances for the rest of your life.’

So hardship programs are just a very, very, very temporary solution to a much bigger picture, to a much bigger problem that needs an overall structure for them. CreditGuard of America is not just an individual; we work with every known creditor in this country: thousands upon thousands in our database.

Wayne: Wow.

Juan: We sit down with the consumers, we go over their finances, and we get hardship programs for the term of the program. All of the creditors that participate with us will give you some type of benefit, and at the end of the day it’s a solution to get you out of debt in five years or less, where a hardship program from an individual, let’s say, creditor, may only be for six months, maybe up to a year maximum.

“All of the creditors that participate with us will give you some type of benefit, and at the end of the day it’s a solution to get you out of debt in five years or less, whereas a hardship program from an individual creditor may only provide benefits for six months, maybe a year.”

But they still have debt. It doesn’t go away; it doesn’t give them an overall view of what they really should be doing to manage their debt.

Wayne: It seems like then you’re just managing five hardship programs and that seems even more complex than having five credit cards.


Juan: Exactly.

Wayne: They’re all dated differently and they are all a relief to a different degree and it seems to me that that’s more complexity.

Juan: Yes, much more complexity, and I always go back to when it comes back to their finances, it’s an overall thing. It’s not just taking care of one tiny, little thing, one tiny debt load; it’s an overall finance structure and budget that we should be looking at. And with hardship programs, I think that they’re good, they offer some type of relief, but at the end of the day, most people typically go right back to falling in debt again. That’s when they start to contact us and we are able to help them out much, much more effectively than just an individual hardship program.

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