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Clean Slate Podcast – Episode 12
In episode 12 of the Clean Slate Podcast, Juan tells us how long it will take to become debt-free and how much you’ll save under a debt management program.
About the Speaker:
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” Episode 12: What to Expect from a Debt Management Program
Wayne: Let’s talk about how long it takes, on a typical basis, to pay off debt under a debt consolidation program like CreditGuard’s, or how much does a program costs. You kind of touched on that a bit, but more specifics on that would be great. Also, how much do people normally save?
Juan: Debt management programs obviously vary in each individual case, but I’m going to give you a rundown of what the general benefits and guidelines are, and time frames within a debt management plan.
A consumer can be debt-free from all of the at least unsecure debt: credit cards, department stores, medical bills, and stuff like that anywhere between three to five years as opposed to the 15 years that most people take to pay off their credit cards.
So, typically, you contact us and in three to five years, you’ve debt-free. You don’t have any more credit cards, or any more medical bills or department store cards or anything else like that. So the program is typically designed to get you out of debt in five years or less, but we’ve noticed that most people are getting out of best in approximately four years or around that area.
The good thing about our program, also, is that if the program says okay you’re out of debt in 47 months or 48 months, if you come into extra money just send it in, and you’re still paying it off, paying off your debt, with the new benefits you’re going to be receiving. So it’s not that you have to stay at the time frame that we set up for you, obviously you can get out of debt even faster than that.
Now the benefits . . . the benefits are unbelievable. Number one, the education you’re going to be receiving from us is extremely well on how to manage your finances. But from your credit cards you’re going to get lower interest rates from many of the credit card companies that participate.
You’re going to get lower monthly payments so that this way you can manage your money or maybe pay off other debt that you have or just put some money in the bank, finally start putting a little savings aside.
“It is incredible how much money a consumer can actually save with a debt management plan.”
If you’re incurring any late fees or maybe even any over-limit penalties that all just goes away, they discontinue that type of stuff. These are great benefits that you receive from a debt management plan, which just from a psychological perspective is a major relief not to receive all of those phone calls.
It’s also a major relief when you receive that statement every single month and you say, ‘Wow, the money I’m putting towards my debt is actually working. It’s not just all going to finance charges; it’s not just all going towards late fees, or over-limit penalties. I’m actually seeing my balances start to go down.’ So the benefits are great, the benefits are unbelievable, and you know in five years, or 47 months, or 36 months, or even less than that is some cases, you’re going to be debt-free.
You can see that light at the end of a tunnel. It’s amazing; it’s a great feeling to be able to have that closure when it comes to being debt-free. So a typical program is about three to five years.
As far as the cost is concerned, first and foremost our consultations are free. So anyone who gives us a phone call, no matter when they give us a call, we’re just going to talk; talk about their finances, talk about what their situations are, what type of debt they have, and so that is free, and whether you just get some good advice and you go and apply that advice to your finances then that’s fine.
Now, if you do decide to join a debt management program, all fees for the program that we charged are set by the state guidelines that provide really good protection for consumers. In each state, we have to get licensed, we have to apply to do debt management, and the shareholders of the company have background checks to make sure they’re legitimate.
So when you come into the program we have to follow those guidelines, so the state determines if you’re a client from, let’s say, New York or California what you are allowed to charge the consumer for your services.
In many cases, in all cases, we always charge less than what the state guidelines set. We simply just want to help individuals out, they contact us, and we have lots of clients, but it’s all determined by what state you live in as far as what the fees are in order for us to continue helping you out.
Now, the savings are incredible. Just to give you some typical situations, we have clients that come in, they’re falling behind in their credit card debt and their interest rates are like 29% and then all of a sudden then join a debt management program and their interest rates drop to 6% or 7%. That’s huge, huge, huge savings in finance charges and that’s a very typical outcome when it comes to many of the consumers that are enjoying our services.
What about late fees? Late fees are $29, $35, $40; many people who join us are getting those late fees because they just can’t make payments in a timely fashion. Those things stop. (Laughing) They just stop with us. They get in our program, creditors say, ‘Okay good, they’re in your program, it’s done.’ So in a typical $10,000 when we do the calculations of a consumer making the same payments, or minimum payments, even making the minimum payments on time with interest rates of, let’s say, 18% we’re saving them easily $18,000 or more in interest rates, just on a $10,000 balance.
Just by how we restructure the payment plan for them, and the benefits of what the credit card companies are going to be giving them for joining a debt management program. It is incredible, the amount of money that a consumer can actually save by coming forward with a debt management plan.
As I said before, it’s not just for credit cards, it’s a restructure of all of their debt: their mortgages, their car loans, whatever they may be, we just teach them and show them how effective they can be in saving a significant amount of money just by the way they make payments to their creditors.
Wondering if our services might be a good fit? Call 1-800-500-6489 or visit our Debt Solutions page for more information on how we can help you get out of debt. The call and initial consolation are free, so what are you waiting for?