Where to Turn for Debt and Budget Help with Thomas Nitzsche #199

could barely make minimum payments on. And then a couple that consumer spending with student loans, a card payment, a mortgage, and then the final kicker, getting laid off and losing his income. Thomas found himself in a really stressful spot, but he was able to move from a place of desperation to using his experience to help others. He now works for Money Management International, which is the largest provider of nonprofit financial counseling and education in the United States.

He's all about conversations around money and de stigmatizing debts, and that's what we're going to do today. So Thomas, thanks so much for joining us on the podcast. Man, Hey, thanks for having me. I really appreciate it. Thomas. We're glad to have you. By the way, Matt and I we drink a beer every week on the show, and it's to signify that we sport on something we love right now while also at the same time trying to

save and invest well for the future. Today on the show, we're drinking Experimental I p a volume thirteen by a local homebrewer called easy Chair Brewing Garage. So I want to ask you, what's your craft beer, what's your equivalent? What do you sploreage on right now while you're saving for your future? Absolutely well, I love dark beer and I love wheat beer, but I wouldn't say that's my splurge. I think, you know, beer's pretty affordable, and I don't

go to overboard. But I would say that I splurge on travel, at least during times when we're not experiencing a pandemic. I travel about once a month to various places. My partner owns a time share at the Atlantis and the Bahamas, and so we go there pretty regularly and doesn't always have to be that fancy though. I'll go to the lake a lot nearby in the summertime and just love to get out and see new places and spaces. So nice. Uh so, yeah, well maybe where is maybe

some of the more adventurous spots have have you been? Like? Do you do? You do you go abroad much as far as to like some of those countries that some folks have never I guess been to or heard of. Yeah. Yeah, So my partner works for a nonprofit music oriented nonprofit and they tour US bands overseas, and so I would say the most adventurous was when I joined him on one of those tours in Belize. It was a lot of fun and got to see a lot of cool places,

got lost by myself a few times. It's all fun in a strange, you know, country, but that was a really cool experience. I don't travel internationally as much as I would probably like because I do help take care of family back here in Illinois, and so it makes me a little nervous to travel that far. But I do travel domestic quite a bit, and to the Bahamas

very cool. You know, Joe and I we both have little kids, little babies at home these days, so travel isn't something that we are doing very often these days. But obviously, like you said, I'm sure that's something that you're not even doing all that much these days. I think I saw something like airline travels down at this point. Nobody's traveling right now. You can't even get a direct flight.

In my partner with saying he can't get a direct flight from here to d C. Right now from St. Louis a DC, you can't even get a direct anymore. So that's crazy man. Well, Thomas, we really appreciate you joining us. Uh, we kind of wanted to start at the beginning of your relationship with money really, um, you know, at the beginning of your store. It's a it's a pretty familiar one. In your twenties, you got into credit card trouble. Can you kind of recount that story, like

how did all that happen? Yeah? For sure, So I would say even earlier than that, because I'm now going on forty one, and you know, back in the day, the credit card companies could market to you when you were at junior college, right, um, and give you a free T shirt with a credit card application, that sort of stuff, which they were not allowed to do anymore. Um.

So yeah, I had eighteen, nineteen years old. They handed me a platinum credit card with a ten thousand dollar limit, and I don't think I was making ten thousand dollars a year at that point, so that is sort of the slippery slope that I started down. I came from a religious family, and the extent of my credit education was the debt is bad, with no real explanation of of why. So like any good teenager, I rebelled and

got a credit card and started using it. So um that that's sort of where it all started for me,

and then it just sort of snowballed from there. Like I was in the process of coming out when I was in my late teens early twenties, and I um exited my living situation with my family rather hastily and under those sort of pressures, and um kind of had to just build my life from scratch, and unfortunately, credit cards had to sort of support that process because I wasn't getting that support from from family or or anybody else.

So that's sort of where it all start hearted for me, and then just over the years it just never really went away. I managed it, but I never really got

it paid off. And even up until the time that I owned my first house and then my second house, I still had sort of like nagging credit card debt and then when the recession hit in two thousand seven, is when I got laid off and I went from a high paying job at a at a global financial services company and then came to what was then clear Point and nonprofit and took a substantial pay cut, and um, it was during the recession, and things got pretty ugly

for me. So I had to take steps to improve my situation and find my footing and and get all that under control. Wow. That that's a big story in a short amount of time. That is the reader's digest. That is, Yeah, that's about a decade of financial journey in sixty seconds. The yeah, I mean, I can't imagine that. The personal difficulty, and you know, the financial difficulty just seems almost paling comparison to I'm sure some the other things you were going through. But you know, we we

do want to talk more about the financial stuff. What what were the major steps that you took in order to stay afloat and pay off your debt while you lost your job and you were going to you took a substantial paket, Like how are you staying afloat? Right? So I really just I took a look pretty much at every expense I had, and any expense that I had either I had to cut or figure out how

to reduce. And that ranged from living with three people at one point I had Unfortunately I had a four bedroom house, so I was able to sublet rooms, so I had other people living in my house. I sold a car and bought a ten year old car, one that I could pay cash for and not have a loan on um, and had insurance, you know, like took some some sort of you know, gig sort of work, just anything I could possibly think of, any non essential,

any bill that I had. I was calling to negotiate things and and cut memberships and cut subscriptions, and it really just took a pruning sharia to a whole the whole budget um, which is, you know, similar to what we recommend our clients do when they're facing those situations. But you know, that was sort of how I tried

to write the ship, so to speak. And then all I was one of the first people to get a homeland modification through the HAMP program the amount of Federal Modification program back in two tho nine, and so that helps substantially reduce my mortgage payment. So in addition to the other cuts I had made and the added income from the um subletting, I was able to stay afloat and fortunately never never missed a payment on anything credit card, student, loan, mortgage,

UM in the process. So that was that was really good because I was able to maintain my credit and m have managed to do that over the years. So you're mentioning subletting. These days, a lot of folks are calling that house hacking, right, And it's kind of like an extreme step I think for a lot of folks to kind of change their living situation, going from I own this house myself to oh, now I have roommates. But that can make a huge difference on the absolute

of your expenses every single month. Like how did you get to that point? Like how did you think that, Like, oh, I I can get roommates, Like that's an option for me. Well, I think it might have been a little bit easier for me for a couple of reasons. First of all, you know, keep in mind that I was substantially younger than I was also a single guy, and I had also pretty much always had at least one roommate anyway, as long as I had moved out from my parents

back in the day. So it really wasn't a huge big of a deal for me, is it probably would be for somebody who lives alone or who just lives with a partner. Right, It was really just a matter of adding more roommates. Um I pretty much always had at least one, So that wasn't too big of a jump for me. You know, obviously it comes with stresses, and there's personality conflicts and the other person's financial situation

that you've got to accommodate. You know, sometimes as well, it's just piling up in the sink right right, right, So but you know it, fortunately it worked out for me, and between that and the modification, it was it kept everything on track and it really really got me through that time. I also did do temporary um hardship forbearance on the student loans, so that helped as well, suspending

those payments. But you know, ultimately I was able to just sort of cobble together a plan, you know, between all these various little little pieces, and you know, I was looking at things that worked ten twenty bucks a month, right, No, no stone was really going unturned as far as things that I could I could try. But you know, fortunately I was only actually out of work for I think

two or three weeks. UM. I took at tempt job temporarily in between my previous job where I had been seven years and where I am now, and I've been here I guess twelve is years. So fortunately it didn't take me long to find another position. Even though it was a lower paying job, I was able to find employment, which is you know, I'm very thankful for that because there were a lot of people at that time that

we're having a very hard time finding jobs. And when I came to what was then clear point that's what I was doing was counseling people who were really experiencing the same thing that I had just been through. So it was, you know, really helpful for me to have experienced that personally. While it was painful, it was very helpful for the perspective of saying, listen, if I can do this, you can do this, here's what you need to do, here's what I did, that's what worked for me.

Let's figure this out together. And it was it really made for a much easier time creating that rapport with my clients during that UM time during the recession. To have had that personal experience. Yeah, and Thomas, you actually went from someone being counseled at clear Point to working for clear Point. And I've heard you say before that the hardest thing for people to do oftentimes is to take the first step to come in and seek help.

So how are you able to take that first step to find it and receive help from a not non for profit credit counseling company. What made you decide this is the step I have to take right now? I would say a couple of things. First of all, like I said, I was exploring every option, and I'm like, you know, if it's a nonprofit and they can give me some advice, let's see what they have to say. You know, I don't have to do anything based on their advice, but let's see what they have to say.

And here in the St. Louis area, it used to be called Consumer Credit Counseling SERVI says, and I was familiar with that name from way back in the day. But the funny part of the story is that after I came to clear Point, because of the name change, I didn't realize the clear Point was the same as CCCS. And I actually found my myself in our database and I was. It was kind of jarring. Yeah, it was jarring because I'm like, wait a minute, why am I in here? And then I'm like, oh my gosh, these

are the people that I talked to a few years ago. Um, So it's a yeah, very serendipitous or whatever you wanna call it. But yes, I was a former client. I ultimately didn't end up going through a debt management program with clear Point CCCS at that time because I had around ten thousand dollars with a credit card debt. But I talked about it with a counselor and she's like, you know, you really just need to buckle down and

get your stuff together. Really, it was sort of a wake up call and she's like, you know, you could use our our repayment program if you wanted to or if you feel like it's out of control, but you really just need to buckle down. And so it was really sort of helpful from wake up call into for advice on my other advice on my budget and from that perspective. So I had received counseling from clear Point.

I ultimately did end up going through a repayment program with clear Point, but it certainly did help to understand what my options were and to sort of get that reassurance that I can handle it. I just need to really buckle down and organize. Yeah, I bet with a different you know, counselors that that work for y'all just got to be a certain degree of empathy, right, Like,

there's people calling up there in tough positions. I'm assuming like that's what you heard when you called up as well, you were able to connect with with someone, and you know, you said that it was more of a wake up call, right, And I think the other reason that it was a little bit easier is that our industry has gone from a very face to face model back and back and when we were founded back in the fifties and sixties seventies, and instead of being face to face, we're now telephone

and internet based. And I do recall sitting in a parking garage at a mall and being on the phone with the counselor, and I think that might have been why it was easier for me to make that call as well. Because I didn't have to go in and

actually face anybody. I could make the call. And you know, there's sort of a little bit of like anonymity or are pretty action or you know, emotional protection I guess of of having that interaction on a phone call or through a computer versus face to face, it's a little there's not as much fear of judgment or um, you know, getting strange looks or you know, whatever it might be. So I think that's another factor that sort of helped

me out. Yeah, well, Thomas, it's really cool that you ended up working for the credit counseling company that helped you out in the first place. And we want to talk more about some of the specifics of what a not for profit credit counseling company can do, and also kind of debt management plans, debt repayment help, that kind of stuff. We'll get to some of those questions right after the break. M All right, Joel, we're back from

the break. We're talking here with Thomas Niche about debt and let's go ahead now and dive into debt repayment plans and some of the different help that's out there. Thomas, like debt repayment help. These are some shark infestive waters. How can individuals find legitimate help when they're attempting to pay off a large amount of debt. It really comes down to doing your due diligence and then understanding what

debt relief options are available based on your situation. You know, we hear a lot about debt relief or debt consolidation, and to the average consumer that that means one thing. Into that somebody who actually works in the industry it means something quite differently. So when we talk about debt consolidation, we're usually thinking a debt consolidation loan, right, creating a new loan to pay off other debt and consolidated. When consumers here that term, they sort of lump sort of

any debt relief into that. Like they consider our debt manager program a consolidation because it does consolidate the payments, or they consider a debt settlement company a consolidation because it does again consolidate the payment. They make one payment to the debt settle my company. And then again you have loans as well. So there's a lot of confusion

around what these different types of debt relief are. Um So one of the projects that I had at at clear point was, you know, helping consumers understand those differences

and those nuances of what options are available. We created an Ultimate Debt Relief Guide that sort of gives the pros and cons of each one of these to help people understand that, you know, based on the type of debt they have and where they are, what the status of the debt is, what the best option for them is based on that, you know, it can range anywhere from doing a debt snowball and just getting more organized, and your personal finances can range all the way up

to bankruptcy. There's a sort of a flow chart of like where range very wide, range right. And if you're dealing with somebody who's a you know, in the in the for profit industry, or who is working on commission or whatever it might be, they're obviously going to be motivated to sell you on what they are selling you. If you go to a bankruptcy attorney, they're gonna want you to file bankruptcy. If you contact a debt settlement company,

they're gonna want you to file a settlement. Just understanding that and looking up reviews, looking for of people who have used that service, looking to objective sources of advice, you know, the Consumer Financial Protection Bureau or any other number of um government or nonprofit or thank tank sort of organizations so that you're not relying on advertisement or somebody who's trying to push their product. Right. Yeah, even a Google ad can be presented in front of information, right,

and that's one of the worst places. Right. But on the other hand, a simple Google search can also raise a lot of flags. I can't tell you how many people would contact me during the recession who were who had gotten tangled up with a debt settlement company or a complete scam like somebody outside the country who was promising to relieve them of debt for a fee if

they would wire them money to Canada. Right. And then you know, a simple Google search of the name of the company that that they were thought they were dealing with would reveal that it was a scam like off report dot com. And consumers are constantly posting about websites that have scanned amount of money. Yeah. And and the other thing is to go ahead and get a second opinion.

You know, just because you spent an hour on the phone with somebody and you think that's the right plan for you, don't hesitate to reach out to somebody else and educate yourself and and you know, get all your options down on paper, get two or three options down on paper, and then make a decision on what you

want to do based on all the information. So, just to kind of hammer the point home here, Thomas, like these for profit oftentimes companies, they make a lot of claims about what they can do, how they can help you with your debt. What are some of the worst things that you've seen for profit companies due to take

advantage of people. Right, So, the biggest thing historically we've seen with at least debt settlement companies and what they call credit doctors who are promising to improve your credit um is that they make these claims, right, we can

settle your debt for pennies on the dollar. But then what they don't often explain is how they work, which is that you quit paying your creditors and they don't pay your creditors either, and you make payment to the um that they then hold in escrow until there's enough in that account to offer the creditor a settlement once

it's in collections. So it would come to a great surprise to many of my clients who would reach out to me and be like, well, they're not paying my bills, why aren't they paying my bills, and I'm like, well, they're a debt settlement company, and here's how debt settlement works, and here's some information you can read about it. They're gonna stop paying until there's enough to settle. That's their

whole thing is settling the debt. And if you're currently paying a credit card company, that credit card companies likely not going to agree to a settlement because they're getting their payment. You have to stop paying and go to get into collections, get into a collection status before you can do a settlement. So it's really a lot of education and just um telling people how that actually works. Yeah, I mean, you're talking about educating, you know, the folks

who are coming to you. It seems that one of the biggest differences maybe between a nonprofit like you guys, and a scam company or even a for profit company, is that nonprofits seek to educate consumers versus you know, just a for profit company essentially just viewing their you know, the consumer as more as customers, right right, And so yeah, I mean like it sounds like education is a really important step, a really important sort of prong of of

what it is that y'all offer your your clients exactly, and that's why and how we operate as a nonprofit. So with every client that we counsel, we provide them with education and an action plan as far as what they might do next, what are the next steps for you? And in that action plan, we're usually giving giving them a few different options that they have that they can choose for themselves what is best. And obviously that will often include, if appropriate, what we offer long term in

a debt management program. But if it's not appropriate based on where that person is, if they have all collection debt, for example, or if they're so underwater that they really need to seek legal advice, we're going to tell them that. Or if they should do a settlement but they should just work with the creditor directly on a settlement, we're

going to tell them that as well. So, yeah, it really is all about education and giving the person the right advice based on a snapshot of where that person is right now in their financial journey. So that is really what we're trying to capture. We gather something like two h to points during a counseling session, and the reason that we're capturing all that information is to determine a financial snapshot of where that person is at so

that we can make the appropriate suggestions. Thomas, you mentioned credit doctors or credit repair services too, and it's really nice. We all want to think that we can get something done in no time, resolve an issue with with very little effort on our parts, and that's kind of what some of these repair services claim to do. They promise a lot, but they oftentimes don't deliver very much. So have you ever seen these credit repair companies deliver meaningful results?

And what is the best way for people to actually start repairing their credit in your opinion? Right, So, a credit doctor is like so many things. Yeah, you might find one that has good reviews and that is effective in getting your credit score increase, But the best way to do something is not always the easiest way to

do something. And when you need good credit, when you want to buy a house or a car or whatever, you shouldn't start thinking about that the week you want to buy that thing, right, you need to be thinking about that months, if not years, in advance, and you need to be creating good financial habits um creating good relationships with your creditors long before you try to accomplish the financial goals that you are, life goals that you

want to accomplish. How a credit doctor works is they capitalize on those people who don't do that, which unfortunately is many of us. We like to procrastinate. Right, So a credit doctor says, hey, I can get your credit score up fifty points in the next two months or whatever it is. I don't know, you know, that's just an example. They may be able to do that, and they do that by disputing anything negative that's on your

credit report. The problem with that is that if that debt is then sold again in the future, it can show back up on your credit report months or years down the road. So it's not to say that they are completely ineffective, because that would not be truthful, but they are not necessarily the most appropriate or best way from a financial management long term financial management standpoint to

be conducting your your financial business. Just like in your job, right, if your boss tells you to do a task, there's going to be the easy way, and there's gonna be the right way most likely, And if you want to have a successful career or want to have a good relationship with your boss, um, you probably shouldn't take the easy path. So for yourself, Thomas, I like the easy path. Well, hey,

okay when appropriate, Yes, easy when appropriate. But in many cases we all know that the easy you know, the the easy path isn't always the best. So um, that's really sort of a good analogy to how a credit doctor works. It's it's not that they can't work, it's just that it may not be the best route to go, or it may not sustain you or change your habits or really do yourself any favors long term by using them. It's sort of like getting a quarter zone shot, like

on the sidelines. You know, it's like, oh, you know, like this will get me through the rest of the game, the rest of the match or something like that. But like long term, you don't want to keep doing that, Like you're gonna just wreck your body if you keep you know, not addressing the underlying issue there. Speaks from experience from his m M A days. Oh yeah, I

don't know, if you see me, I'm jacked. Uh. Well, so at the times, often like being debt, this means for individuals getting like sometimes these shady phone calls and emails, right, and so for folks looking to kind of handle some of the steps themselves, Like what rights do individuals have when it comes to dealing with these creditors? Who are you know, hounding them? Yeah, so again comes back to education.

You need to really need to go out and look at the fair debt collection practices actually that you know what a creditor can and cannot do. Um. You know, they shouldn't be calling you at three in the morning or threatening to show up at your door or send the cops or anything like that. You know, if you're being harassed, you do have recourse. You can file complaints with the CFPB or with your state's attorney general's office. You know, you may even have grounds for a lawsuit.

So yeah, you need to You definitely need to know your rights. On the other hand, you also know when you need to take action. If you receive us if you receive a legitimate court summons for a court appearance, you better show up and explain your situation. And even if that means even if you can't pay it, you need to go and explain your situation because if you don't show up, if you ignore it, um, they get

a default judgment against you. So there are some people you know that our judgment proof they might be collecting soul security or disability. They might add own property. There may be no way for the creditor to collect ever collect that money. But you you don't want to ignore summons? Sure? Yeah, those are some some good tips. What about what what abilities? Thomas?

Does a nonprofit company like Money Management International have to help resolve debt issues with creditors that people might not have access to on their own. Are there certain specific tools and abilities that y'all offer that people wouldn't be able to get on their own when it comes to

dealing with creditors. Sure in some cases. Yes. So the way we work is that we have long standing relationships with most, if not all, of the major national creditors and some smaller regional creditors in what is called a debt manager program known as a d MP. And basically, if we do accounseling session with someone and we determine that they are a good fit for a debt management program,

we will make that recommendation. I think it's somewhere around a fourth of the total people that we counsel we will make that recommendation, and if the person decides to enroll in the debt management program, we then communicate with their creditors, and we know up front what most creditors

will do by way of concessions. That means a reduced interest rate, reduced payment, a fixed interest rate, and a fixed payment for the life of the repayment so that you're not surprised, you know, you're not ever surprised by how much your bill is. It stays the same and it locks that rate into a lower rate. So on average, we're able to lower people's rates to about seven point three percent um and it creates a four year repayment plan um, possibly longer if you have a high level

of debt. So yeah, so we set that program up, We send proposals to each of the creditors, we get their agreement to that. That's probably the primary difference between us and a settlement companies that many times the settlement company is not getting that up front agreement from the creditor. They are defaulted, allowing you to default on the debt and then they're hoping for the best basically as far

as what they're able to settle for. Whereas we contact the creditor on the front end with a proposal to get their agreement to it, and then the consumer agrees to the repayment plan, the creditor agrees to your payment plan, and as long as that consumer is able to stick to that payment for those forty seven months on average, they are then debt free with all you know, whatever

debt they included on that program. Now, the caveat, of course, is that it is for unsecured debts, so that's things like credit cards, retail store cards, some personal loans, that sort of thing, not anything that's secured, so you can't put a mortgage or a car or your r V or boat or whatever. Or student loans also do not work in debt management programs, So that's sort of an

overview of how that works. Gosh, it makes me think just this conversation, is there anybody out there who is better served by going directly to for profit companies and not going to a not for profit credit counseling place. First, I think it's a great idea to get some objective advice. First reason being that depending on the status of the debt, you could be better served with the debt management program

than doing a settlement. Because as we've found that our average client who goes through a debt management program increases their credit square by about seventy points in the first two years of their debt management program. There might be an initial dip because we do require that the accounts be closed when they enter the debt management program. So as you know, when you close a line of credit, that's gonna ding your credit score a few points um So there is an initial dip, but within two years

on average we see a sixty credit score increase. That is not going to be the case usually when you do a debt settlement. Also, it's a good place to start with us because if your debt is already in collections and we're not going to be able to be as an as effective with you with a debt management program, because typically a debt MANAGEMIP program is most effective when

the debt is still with the original creditor. It does not necessarily need to be current, but you have about three months from the time that you default on a credit card to get it back in good standing before it gets charged off to a collection agency. So it's really important to take action in those first three months.

Reach out, try to do everything you can do either contact the credit or directly to get a hardship plan, especially if you're impacted by COVID or some other um economic personal economic hardship, or reach out to a nonprofit credit counselor so that we can work with the credit card company to get that account rehabilitated and back on

track and get it reporting positively on your credit report again. Now, if you're somebody who's let that account go more than three months and you're in collections, then yes, it is possible that at that point that credit damage is done, you may not be in a position to make full payment or what the payment is that they want. So it could be in your best interest to to save up some money and offer that credit or a settlement

down the road. But that is something that you can educate yourself to do, and to a large degree, you can manage your own debt manager program that what we what we administer, but that requires contacting every creditor directly, and our average client has six or seven or eight creditors, contacting each of them directly, getting on their hardship program, and then making those payments religiously every month individually, whereas on a debt management plan, you just make one payment

to us and we disperse the payments. So in both cases. It's not that you can't do it yourself necessarily, but the terms that you get directly to the through the creditor or the terms you get through nonprofit credit counseling maybe a little bit different. So it's a good idea to see what the credit will offer you directly and then see what you're able to get through a credit counselor, and if it's better, if it's a better rate through us,

then it could be worth doing it. Yeah, it's it's good to hear that there's actual tangible benefits to going with you know, a nonprofit like you guys, you know, aside from sort of the emotional support and aside from the sort of accountability that you would also receive by by talking to a counselor and similar thing with the similar thing to credit doctors. I'm not here to say that every dead settlement company is evil. No, that's not

that's not the case. There are certainly dead settlement companies that have positive reviews and good experiences. The part that I would emphasize is that there's education involved, and then if the if the person has not already been sent to collections by their creditors, that it's best to try to avoid that by either working with the creditor directly or going through nonprofit credit counseling instead of further escalating

it by getting involved with the dead settlement company. Now, if your finances have changed to the point where you just can't make a payment, not even a debt management plan payment, then you might need to be considering another strategy, whether that's UM saving up for a debt settlement yourself, or going to and getting legal advice to see if you're a bankruptcy candidate. Awesome, Yeah, that's that's really good info there, Thomas. Um. Overall, this has been awesome on

managing debt. But you kind of hinted at COVID nineteen and so we're gonna talk next about this, you know, the great lockdown, and how that is affecting our money, Uh, specifically how that's affecting our debt. We'll get to that right after the break. All right, we're back from the break. We're talking about where to turn for debt and budget

help with Thomas Nitchie. Thomas, let's talk more about the major issues that you see facing money management international clients right now, people that come to you for non not for profit credit counseling. You get obviously a lot of calls, a lot of emails, and you're getting more. I'm sure right now, how have those calls and emails changed since the Great Lockdown has basically broken the economy at least

for the time being. Sure, So we're seeing a couple of different channels, different types of people calling in people who have engaged us in the past or who are in a debt management program now and who are now experiencing the economic impact of coronavirus and are struggling to

make those payments. So with those folks, were helping them understand what their creditors might be now offering over and above what they're offering in a debt management program, as far as a deferment um or other payment suspension or reduction that might help them get through this time on

a on a temporary basis um. And then another large bucket of calls are people who are calling and are concerned about keeping up on their mortgage or keeping up on their rent, even if they're not necessarily yet financially impacted by coronavirus, they are concerned about what that looks like if this drags on and they do experience um an interruption in their income, and unfortunately, you know, many

Americans just don't have emergency savings set aside. They don't have emergency saving set aside to sort of get them through three or six months of a downturn like this. So, you know, we have a lot of really concerned people reaching out right now, and then also people who are already impacted and are struggling to understand the terminology that

their lenders are using. So forbearance, for example, when a lot of consumers hear the word forbearance, they hear forgiveness like if they if if IF they lenders says we're gonna give you a three month forbearance. That does not mean that those payments are simply forgiven, or that they're just going to be tacked on the end of the

loan or whatever. At the end of the forbearance, you actually have to solve for those missed payments, So whether that's a lump some at the end of the three months, or an application for a modification or a repayment plan where those missed payments are split up over say, you know, a year or two and then added to your existing mortgage payment. Those are actually realistically what what forbearance means.

It absolutely does not mean a forgiven payment. Tom's have you seen any like credit card issues changing the way that they deal with card holders, you know, based on the on the pandemic you have, so absolutely, um, a lot you know, a lot of the creditors I feel are responding a lot faster than they did during the Great Recession. UM. I think they you know, many of us learned important lessons during the recession as far as

how to respond to consumers who are in crisis. And so I've been really really um encouraged to see what many creditors are doing, not all, but many. The problem though, is that there are so as you know, there are so many creditors. Um. You know, there's hundreds of creditors nationally, and each one is handling this a little bit differently and has different policies, different procedures, different way of um getting people into these plans might be online, you might

have to call in, might be an application. You know, they might be offering one month of forebearance for now or deferment might be three months. So it's really all over the board, and it's making it really challenging for both counselors here M I and consumers to understand what

they should be doing where to direct people. Um, these processes are slow, sometimes to be spun up, and sometimes processes change and we're not advised of that by the creditor, and so it is a confusing time for all involved. And there's you're seeing a lot of frustration, even more frustration now with the stimulus checks and you know, when am I going to get my check? And how am I going to get my check? And what is it going to be based on? And it's a really difficult

time for consumers right now. We're you know, we're obviously doing the best we can to bring some clarity to those scenarios as we meet with people. Yes, so for people that do have debt and they're trying to figure out how to get forbearance or deferment, or for someone let's say who's got a car note and they're trying to figure out, well, what do I do about this because I can't pay my car note this month? What question should we be asking of a potential creditor when

we're trying to ask for help right now? Sure, so probably we need to back up and talk about if you can get a hold of your creditor for right, Like, the calls are just astronomical, and we were experiencing people, you know, being on hold for hours on end to

try to get through somebody. So I would say the probably the best thing to do at this point is to start online and check with the website of your various creditors, because that's going to be the easiest, fastest, uh and likely most efficient way to get the information you're looking for. And there might even be way to to apply for that financial hardship aid right there on the website. If you don't see it on their website, try logging into your account and see if there's anything

behind the log in firewall. It'll give you more information. It'll pop up at the top of the page right right. So once you've done that, then at that point you might need to start getting on the phone or if they're if they have a messaging app or email address or something like that, something that's a little less frustrating than being on the phone phone for hours on end.

Trying to take advantage of those routes as well. Nice The reason Joel was asking about what questions to ask is because he owes me twenty bucks and so he wants to know how he can kind of get out from from under my thombs. Customer service is terrible, Like don't even get ahold of the guy that in order to pay the bill off, I am slow to respond. Facebook page messaging, Yeah, common public. Leave him a bad review that'll get his attention. Tell us something about like

Project porch Light. So that's a part of m m I, And how can that sort of project, how can that be potentially helpful for people right now? Yeah? Sure, So

I'm really excited about Project Porchlight. It's a program that was designed by Kate Bolger here at m m I, who's UM in our development department, but she's also a former counselor and she's personally experience or her family has personally experienced UM natural disasters tornadoes here in my area actually a Missouri UM and what she noticed was the recovery for people who have been impacted by a natural disaster.

It takes a long time, and there's real difficult challenges applying for FEMA aid, applying for insurance, help, figuring out how you're going to overcome shortfalls out of pocket expenses, credit card debt for things that weren't covered by insurance, or that any number of challenges that somebody has when they go through a natural disaster. So we created Project Porchlight and we got funding UM and we got a partnership with Fannie May and we operate Project Porchlight as

Fannie May's Disaster Response Network. So any UM mortgage holder who owns a home that is UH, the investor is Fannie May, can receive help through the Disaster Response Network, which is a Project Porchlight, and basically it gives them resources and counseling coaching to get them back on track, get them on a path to full recovery, and hopefully

expedite the recovery. So what we do is we do an assessment to determine where they're at right now, sort of similar to a credit counseling session, but more focused on the disaster, and that the aid resources, see what sort of assistance they need, see if they need help with UM appeals with FEMA or with their insurance company, and then let them know about resources that they may

not already be aware of. So when COVID happened, UM we looked to Fannie May and to our other funder, which is a MetLife Foundation, to pivot project Porchlight to people who have been impacted by COVID. Now, obviously there's some real challenges here, right because this program was designed for regional geological disasters, so you know, hurricanes in Florida, tornadoes in the Midwest, fires in California. It really was not designed for a pandemic or national scale exactly exactly.

So that's been our challenge right now, is pivoting to COVID and giving people the best possible support we can to try to help them understand what their options are and get them through this really challenging time. But we are really proud of the fact that we developed that program um in response to natural disasters and that it's

now available for people who are impacted by COVID. And m m I itself actually was flooded during the Hurricane Harvey in in Houston, so we do have some personal experience from our own experience and from that of our staff, and so you know, again the empathy factor, right, like, we've been there, we know we've done this, so we definitely encourage people to reach out if they're struggling to to get the support they need, or if they have feel like they've exhausted UM their resources or um have

exhausted the help that they're getting from their creditors. Well, Thomas, this has been just a great conversation. I've learned a lot. I hope you know this has been really helpful for our listeners too, especially the ones who are having your income issues to have debt issues right now. Where can our listeners find out more about Project Porchlight and about m m I so that they can, you know, get help via those avenues. Yeah, absolutely so. Money Management dot

org is our main website. If you've got any sort of budgeting challenges or experiencing high levels of credit card debt and need help with your housing, that's the place to start. If you've been specifically impacted by a natural disaster in the United States, or if you're experiencing a reduction of income or hardships due to COVID, go to Porchlight dot org um and that will take you to

the rights. Very cool. Well, Thomas thinks so much. This has been Yeah, I completely agree with Joel, like, I have learned so much, and yeah, hopefully we're able to get this info out there and help those out there who are also in need. But yeah, thanks so much for joining us today. Absolutely, I'm really grateful for the opportunity. Thank you, man, Joel. What a great conversation we just

had here with Thomas Nitchie of Money Management International. I'm so glad that we got to basically pack so much information into you know, the short conversation and hopefully our listeners are gonna, you know, be better for it. What to you stood out? Like? What was your big takeaway? Yeah, so it's hard to come up with just one thing, but if I had come a lot of ground, yeah, yeah,

we did, We really did. I think the biggest thing Thomas I had to write this down when I heard him saying, and he said, the best way to do something is not always the easiest way, and I think that showed in a couple of ways in our conversation with him. One the easiest way to get out a debt is not to sub let every single room in your home. He took the hard way, but he did that in order to make sure you got out of

debt in a timely manner. The other thing is when you're dealing with creditors, the easiest ways to google debt or leaf companies hop on the first one and kind of trying to get the ball rolling there. The hard way is the longer four years slog of a debt management plan through a nonprofit counseling company, after having done the due diligence, where you've gotten multiple opinions right right. And I think that is just such a good thing that life oftentimes boils down to the best way to

do things is not always the easiest way. That's just true for so many things. And it's definitely true of our money. It's true of investing over the long haul, and it's true of getting out of debt. It's true of getting a budget together. It's not always easy, but doing those things going about it the hard way is going to have just a lasting impact on your finances

and on yourself as a human too. Yeah, man, I you know I feel that That's why credit doctor is such a a term that kind of stains out because you think, yeah, I just want somebody to show up and fix my credit, like fix this best, like fix all this that I have done over the past ten and twenty years of my life of neglecting my finances. I feels like credit therapist, you'd be like, no, it's

gonna take a much time exactly. But as we know, and we we we seen this in medicine over the past, you know, several decades, but a large part of overall health, whether it be our physical health or our financial health, it's more holistic, and it takes doing the right thing, the hard thing, day after day. A lot of times, there isn't going to be an easy fix. And even after you talk with a counseling company, you know, like Thomas's, it could be several years, like you said before, you're

out of the woods. So yeah, I'm totally with you for me. My big takeaway, we mentioned how you know he said this previously that the hardest step, the hardest first step to take is just like contacting a credit counseling company like this, because there's a certain amount of I think shame sometimes that people associate with having not

handled their finance as well over the years. Right, And this is something you and I we've talked about this before, right, but the difference between shame and guilt, right, like we've talked about Burnet Brown and how shame is when you

identify with something. And so if you see yourself as uh, someone who's terrible with their money and that's just who you are, you're gonna be less likely to take those steps because it's hard to change who you are, versus if you see yourself as, yeah, I did those things, I'm guilty, right, But you can change small actions, you can change behaviors. It's hard to change who you are

as a person if you identify with that. But I think it's easier to say, Okay, well this is a small behavior that I'm going to change, and over time, by taking the right step, like you said, you day after day, year after year, you're gonna end up in a fantastic place when it comes to your your personal finances in and with your credit. Yeah, if you just sweep it under the rug, keep moving along, that problem

doesn't go away, gets worse exactly. And so yeah, taking that step, making a phone call, even if it's just that step, it can be a huge relief. And you'll also you'll find empathy on the other side of line. You'll find people like Thomas who have been through something similar, similar rough times, who are there to help you through your rough times. I love that he's been there himself as an individual, but how he mentioned how his company has been there as well, like with the floods and Houston.

It's so valuable to have actually been there when you're talking to someone directly and you're kind of hold their hand and walk through a situation like that, and it's just really encouraging to hear that directly from them. So, Yeah, fantastic conversation. And of course we'll make sure that we link to Project porch Light as well as and then I in our show notes. But before we even gets all that, Joel, Um, this beer. This is a fantastic beer. This is another one from our buddy Jess over at

Easy Chair Brewing Garage. The name of this one you said was experimental. I p a volume. I didn't get the first twelve, Jess. I'm just I'm expecting maybe the first twelve where you know, I want you to have those. Yeah, he finally got the recipe right on this one. And this one has pineapple. This this I PA has pineapple in it, Matt, And it was delicious, man, I thought it gave it a nice super juicy vibe, had a tiny bit of sweetness from the pineapple. Also a tiny

bit of tartness going on as well. So it's just this really interesting I p A A fruit thrown into an ipa on occasion. I'm not gonna lie. I like it. I like some blood orange or some pineapple every now and again in an I p A. And man, I feel like just knocked it out of the park with this one. This was this was really good. Yeah, man, I could not agree more. This was a fantastic one. And this is a new England style I p A. So as we ported, it had that cloudy kind of

as he looked to it, and I'm with you. The first thing I noticed when I when it took a sip was that had a touch of tartness, which I've had sour I p A s and you know I p s are a little more tart and I really dug them. So this was a fantastic one. It definitely had that fruity pineapple vibe going on, and because of that, it lent itself this sort of tropical vibe. And it also reminded me of so Easter wasn't that long ago?

And uh for Easter egg hunt inside the house because it was raining for the girls, we had those those little Easter egg jelly beans, like these are the classic ones with all the classic flavors, not the not the Starburst ones, not the Starbursts ones. Yeah. I don't know what the brand was, but just on a super Classics

or whatever. Yeah, yeah, I think it was actually, but the white jelly bean was pineapple, and it totally like it takes me back to sort of that flavor profile because things that are flavored pineapple taste a little bit different than fresh pineapple obviously, right, but it totally it totally reminded me of that. So it kind of had a little bit of nostalgia going on because obviously I set some of those jelly beans as a proper father should when you when you're loading up the eggs, gotta

get your cut exactly. It's the daddy's cut. But yeah, man, I really enjoyed this beer. So again, the big things to Jess for donating this one to the show. Yeah, Matt, I think the best description I can give is it tasted like a Thomas Nichi vacation to the Bahamas? Is that where you said? Is that where that where they guess where they go at? Okay, nice super tropical down there. I thought you're gonna mention this is what it tastes like in Belize, like, well, I'm not sure if that's

what you want. Did they grow pineapples and belice? I don't know, maybe they do, Maybe they do. I know they do in Hawaii of course. Yeah, But all right, Matt, that's gonna do it for this episode. For folks at one are shown than they want to find out more about not for profit credit counseling, just go to our website how to money dot com. And maybe you're listening to this episode right and you found it very helpful.

But you've also maybe you thought of somebody else, you you know, somebody else that might be in some serious debts trouble all my friends Susie she is not good with money, she needs real help, or my buddy Sean. You know. Either way, if you have that person in mind, we would love if you shared this episode with somebody or just the show in general. You don't have to necessarily say, hey, go listen to this one episode, dummy.

You get disrec them in our show to somebody that might be looking to do smarter things with their money. We would greatly appreciate that word of mouth is a fantastic way to help us screw the show and to let that other person know that you care about them. Yeah, exactly. An email link to one of our podcasts is definitely a way to show that you care. All Right, Matt, that's gonna do it for this episode. Until next time.

Best Friends out, Best Friends out. Hey. You know, one thing I was going to mention about my experience before I came to m I or a clear point, um, is that when I worked for the global financial services that I used to work for, two of my really two of my primary duties were one helping people wire money into casinos off of their credit cards and to helping people understand that they had been scammed by lottery like Nigerian priends scams or lottery scam ms or whatever.

Um those were like two of my primary job descriptions. So it's been a real one eighty for me to come to an organization that is helping people get out of debt and into a better financial space. Um. So I thought, that's another sort of little irony in my story