Personal Finance Interview with Nicole Morgan on Debt Settlement
The shadow of an individual's financial troubles can extend well beyond a personal checking account, says Nicole L. Morgan, president of S&N Debt Solutions. Too much debt can negatively affect a marriage, stress levels, relationships and wreak havoc on your health.
While each person's situation is unique, there are several initiating causes for financial hardships that Nicole and her colleagues observe regularly: job loss, divorce, medical illness, college expenses and unchecked spending habits.
And identifying the root to a debt crisis is a major component of the debt consolidation company's mission to educate their clients and help put them on surer financial footing in the future.
"Debt doesn't have to be a 'way of life,' but living free from financial encumbrances will only happen when the root causes are identified and personal habits and attitudes about debt are changed, once and for all," Nicole adds.
We recently checked in with Nicole to get her insight on how debt consolidation works and when consumers should seek these services. Here's what she had to say:
Can you tell us a little about the history of S&N Debt Solutions? When and why was the company started?
My business partner and I formed S&N Debt Solutions in the summer of 2011. Having worked in the financial services industry for years, we realized that honest, hard-working people sometimes find themselves in difficult financial situations. We understood the stress and anxiety that tough financial times can cause, and we decided to roll up our sleeves and help.
We remain committed to providing the highest quality debt negotiation services because we believe that providing consumers with the knowledge they need to properly handle their finances will improve their financial situation permanently.
What services do you offer? How do they work?
S&N Debt Solutions provides proven customized debt negotiation programs and services aimed at restoring our customer's financial well being. We offer an alternative to bankruptcy, debt consolidation and consumer credit counseling by providing professional and compassionate services to our customers.
Debt negotiation is a process in which both consumer and creditor settle or resolve a debt for less than what is owed. When negotiated properly, a consumer's debt can be quickly and significantly reduced.
To ensure a successful settlement occurs, funds need to be readily available to pay the amounts we negotiate for our customers. Because these amounts must be immediately paid, our customers accumulate funds in a special-purpose FDIC-insured savings account to ensure an expedient transfer.
Having S&N's professional debt negotiators working on your behalf will result in increased savings for our customers and their families.
Who should be using debt negotiation services?
The people who call S&N are extraordinary. They are family-oriented, hard-working people who are struggling to make ends meet. Sometimes life happens and, despite the best of intentions, people find it difficult to meet their monthly financial obligations.
Debt negotiation is for anyone experiencing a financial hardship. A financial hardship is not simply a lack of interest in paying as agreed.
Some of the factors we use to determine whether or not a consumer qualifies for our Peace of Mind® program include:
- Monthly income
- Total amount of unsecured debt
- Current monthly minimum payments
- Monthly disposable income
- A consumer's status with their creditors
- Whether or not accounts have gone to collection agencies
- Whether or not a lawsuit was commenced for collection on the account
- The consumer's specific financial hardship
No one should allow credit card debt to affect the things that make him or her extraordinary.
Why is only making the minimum payment a bad idea for anyone...no matter what their current financial situation is?
Paying only monthly minimums is a terrible way to resolve debt problems. The portion of each payment that is actually applied to the principal is minimal. In fact, making the minimum payments on a credit card can take up to 25 years to completely retire the debt.
If only minimum monthly payments are made, most consumers will quickly realize that their balances are not decreasing. Additionally, if you are close to your credit limit, making minimum payments may not be enough to keep you from going over the limit, resulting in additional over-the-limit fees. These extra fees can result in additional late payment fees, and the cycle continues.
Creditors may also raise interest rates due to late payments, thereby increasing monthly minimum payments even higher.
When should an individual or family turn to a business like yours for help? At any point they have unwanted debt, or when it's reached a crisis level?
Only the consumer can determine when it's time for professional help. Sometimes it's difficult to recognize the patterns that can lead to serious financial issues. If someone is juggling payments or looking for lower interest credit card offers simply to stay afloat, the time to address their debt is now.
Most people experiencing a legitimate financial hardship will continue to pay monthly bills as they become due. They struggle to make their minimum payments, instead of considering solutions that can get them out of debt permanently.
Personal integrity should be applauded, not derailed, by a bill collector who doesn't take the time to listen to the underlying circumstances causing financial distress.
At S&N, we take the time to listen to our customers and develop a program that will have them on the path to financial freedom as quickly and responsibly as possible.
What sorts of things can you do on behalf of a client when it comes to debt reduction that they might have trouble doing for themselves?
Determining the appropriate financial solution for a consumer in financial distress can prove challenging, even for the most experienced industry veterans. Restructuring the repayment of a debt requires time, persistence and continuous interaction with banks, creditors and collection agencies.
While it is possible to settle an account balance on your own, most creditors require evidence of financial hardship. Without knowing the creditor's collection strategy and settlement protocol, an individual's results may be less than desirable. If negotiated improperly, a consumer's attempt to settle an account balance may simply result in a payment being applied toward the full balance.
Creditors have an arsenal of bill collectors, collection agencies and attorneys, who work tirelessly to keep consumers making minimum monthly payments. In fact, the only time most people hear from their creditors is when they fail to make a payment as agreed.
A professional debt negotiator working on your behalf will ensure that creditor payments are made as negotiated, and will result in an increased savings for the consumer.
How do you coach your clients through the process to help them understand how to avoid future financial difficulties?
Working in the debt settlement industry, we don't want "repeat customers." To increase our customer's knowledge about responsible money management, it is critical that we help them examine the building blocks of proper financial decision-making.
Before we can educate our customers on how to avoid future financial mistakes, we first identify the underlying reasons for their financial distress. We take the time to learn why our customers struggle to make their monthly payments, and then offer advice for ways to live debt free. We believe that knowledge is the best approach for preventing future financial hardships.
S&N offers consumers a wide variety of resources we developed to foster a continuing financial education. From informative articles and helpful calculators, to our financial literacy video series and monthly customer service calls, our program is designed to help our customers understand how to stay on the path towards financial independence.
Every graduating customer understands that in order to be financially responsible, you must live within your means; and to live within your means, you must spend less than you make.
What's the climate like these days for services like yours - have you noticed any changes in the number of individuals/families seeking your help, as the economy begins a slow recovery?
In October 2010, the Federal Trade Commission extended the Telemarketing Sales Rule (TSR) to include debt relief companies. This ruling prohibits companies, such as S&N, from charging customers fees in advance of rendering negotiation services, and prevents companies from handling or otherwise controlling client funds.
Prior to this ruling, there was a lot of skepticism that debt relief programs were a viable alternative for addressing a financial hardship, and may have discouraged consumers from seeking assistance in resolving their debts.
As the American economy continues its recovery, there has been no noticeable decline in the number of consumers who seek our help. However, we have noticed a change in the purchasing habits of newly enrolled customers. During the recession, a larger percentage of our customers had used a credit card to pay for expenses such as rent, utilities, groceries and other essential items. Recently, we have observed fewer customers using their credit cards to meet these monthly obligations.
What do you think is the future of debt settlement programs like yours? Do you think the 2008 financial crisis showed people the light when it comes to the risks involved with accumulating debt, or do you think we still haven't learned our lesson?
Financial problems reflect the myriad of seemingly small financial mistakes that consumers make over time, often because they lack the knowledge or discipline to live within their means. Inherently, most people recognize that the concepts of spending less and earning more are integral to living a life free from the pressures of debt.
S&N will remain committed to assisting consumers in resolving their account balances and educating our customers that the path to financial independence lies in the monetary decisions they make each day. Making wise and thoughtful choices with your money will help you maximize savings, build credit and minimize financial hardships in the future.
I remain optimistic that if provided the requisite knowledge, consumers will be able to avoid financial pitfalls, and build long-term financial independence on a strong financial foundation.