Financial literacy...not just for bookworms

In a recent report referenced by Southern Methodist University, in a study called “Economic Factors and the Debt Management Industry” by Richard Briesch PhD, 41 percent of households give themselves a C, D, or F in financial literacy.

That’s not good.

What’s your level of financial literacy?

1. 57 percent of households do not have a budget. DMB Financial starts every engagement with clients by jointly developing a budget. Knowing where you are, where you begin, is the first step towards better financial literacy.
2. 32 percent of households admit they have no savings. DMB Financial helps you set up an independent savings account at an FDIC insured institution. This is your savings account. It holds your savings. Creating a savings mechanism is a critical. It gives you the tools to make good financial decisions. You have a budget and, over time, develop a healthy savings amount. Now you just have to put that plan into action.
3. 77 percent of households admit they’re saving less this year than they saved last year. Even in tough economic times, with a good budget and the right savings plan, you can improve your savings situation over last year. The average DMB Financial client is saving over $700 a month by the time they graduate our debt settlement program! That’s amazing, especially considering the average income is around $50,000 a year.
4. There is no long-term plan for wealth creation. Rich people have financial plans, investments, and advisors. Are financial plans, investments, and advisors only for rich people? Or, are those people rich because they have a financial plan, investments, and advisors! Many graduating DMB Financial clients transition to our partner’s financial planning services. They start retirement savings, college funds, and some even start buying stocks and bonds. In just a few short years they go from being buried in debt to having a plan that gets them to $100,000 in the bank or more. Hello retirement. Hello paying for kids’ college. Hello new home.

Financial literacy isn’t something just for the rich and famous. DMB Financial enters every client into its 36-month financial literacy series of email newsletters. We partner with a major financial planning service. They provide our clients with free financial planning consultations to help identify their goals, their dreams, and put a plan in place to reach them.

Get out of debt. Then create wealth. Come join the financial literate!

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For a free debt analysis and preliminary budget, call a Program Consultant at (866) 869-6959. You’ve got nothing to lose, except the debt.

 
This article is for informational and educational purposes only.  It is not intended to provide legal, tax or financial analysis.  Please consult your attorney, accountant or tax advisor if you have legal, financial planning, or tax related questions.

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We couldn’t be happier for our hard working settlement, client services, accounting, support staff and sales personnel. Thanks to all the great clients who voted with their feet and made DMB Financial their #1.

We’re also celebrating two new milestones. As of January 10, 2010 we’ve saved over $123,000,000.00 for more than 13,000 clients nationwide. We’re looking forward to another mega year of restoring financial freedom to thousands of Americans!

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There are several common mistakes many of us make that lead to this situation. Recognizing these mistakes and taking action to correct them can help you eliminate your debt problems for good and begin your journey towards financial freedom.

1. Continuing to Use Credit: If you are continuously adding additional debt to your current amount, you are making it increasingly difficult to become debt free with each swipe of the plastic. Leave the cards at home or even cut them up to make sure you don’t add any more fuel to the fire. Use cash for everything, and if you don’t have the cash, you can’t afford it.
2. Ignoring the Problem: Pretending that your debt is not a major problem is a serious mistake. Making the minimum payments will only guarantee that you continue paying the credit card companies for many years to come. For instance, if you have a $7,600 credit card balance with an 18% APR and only make 2% minimum payments, you’ll need 53 years to pay off your debt. Total interest-$21,731! Sound the alarm bells now and recognize the problem. The sooner you begin taking steps to address your debt problems, the sooner you can begin resolving them.
3. Failing to Consult a Debt Settlement Professional: Debt settlement professionals work with your creditors to negotiate your outstanding debts down to a manageable sum. Creditors may negotiate on outstanding debts, as they stand a better chance of regaining some of their investment by settling for a lesser amount, and debt settlement professionals know all the ins and outs of the industry. Many such debt settlement programs allow you to structure a payment and savings plan that works on your terms and within your budget.
4. Leaving a Debt Settlement Program Early: Quitting a debt settlement program prior to resolving all your outstanding debts can hurt you in many ways. First, you may lose any fee or program costs which you have already given the debt settlement company for their services. Second, if you wish to join another debt settlement program later on down the road, your previous failure to complete such a program will be a red flag to the new company, who may decide not to work with you. Third, you are still in debt! Sticking with the plan and completing your debt settlement program will allow you to use your time, energy, and finances to increase your savings rather than deplete it.

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Harassing phone calls from creditors is a concern for many individuals facing unmanageable debt. The debt collection industry is big business. In fact, the Association of Credit and Collection Professionals (ACA) reported that roughly 6,500 collection agencies in the U.S. recovered more than $39 billion in debt in 2005 alone. Therefore it’s no wonder that these agencies often use aggressive tactics to get their share of the pie.

Strict federal and state regulations regarding debt collection practices, however, offer consumers protection from harassing collectors and have severe consequences for companies operating in an improper manner. By educating yourself on a few of the regulations binding these creditors and collectors, you can put an end to the harassment.

The Federal Trade Commission’s Fair Debt Collection Practices Act applies to third-party collection (not first party creditors) and was designed to protect consumers from devious and aggressive collection practices. Specifically, the Act states that collectors: 

1. May only contact you between 8 a.m. and 9 p.m.
2. Cannot use cell phone numbers for collection calls
3. May not contact you at work if you tell them your employer disapproves
4. May only contact you once per day
5. Must cease and desist future contact once you notify them in writing you do not want anymore calls (they may, however, send you one final notice regarding the next course of action)
6. Additionally, many collection agencies have been known to make subtle (or not so subtle) threats regarding garnishment of wages or even imprisonment for failure to pay debts. Section 807 of the Fair Debt Collection Practices Act “prohibits falsely representing or implying to the consumer that nonpayment will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or wages of any person”.

What does this mean for you? It means that you have rights too. If you are receiving harassing calls, begin by telling the caller you believe they are harassing you and that you are aware of your rights under the Fair Debt Collection Practices Act. Next, send a formal letter to the collector saying that you are aware of the debt, are working to resolve it, and do not want to receive any additional calls (keeping in mind that the collector is allowed to send one final notice regarding their next course of action). If the harassment continues, notify the Federal Trade Commission or your state’s Attorney General’s office.

While debt settlement professionals cannot reduce harassing phone calls, many firms encourage their clients to refer all calls and contact to them for resolution. In some cases, the client is encouraged to send the collector a change of address and phone number listing their debt settlement professional’s contact information. These firms will also work with the collectors to come up with a solution to settle your debt and end the harassment for good.

Now that you have the knowledge you need to fight back, you can enjoy your dinner in peace and stop screening your calls — unless of course it’s your mother in-law…

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See below for the 3 secrets to completing a debt settlement program to ensure you become financially independent:

1. Stop Accumulating Debt: If you are continuously adding additional debt to the amount your debt settlement company is trying to settle for you, you are making the job that much more difficult and lengthy for yourself and your debt settlement professional. Stop adding anymore fuel to the fire to make sure you can complete your settlement program within a certain timeframe and within the budget you set up at the beginning of the process.
2. Pay As Much As You Can: The more money you can put towards settling your debts each month, the quicker you can complete your program and become debt free. Take a weekend job, sell off unused or luxury items, or cut your monthly expenses in order to put as much as possible towards your debt settlements each month.
3. Stick With The Plan: Even though you may be living a more frugal life than you are accustomed to, the end result is well worth the months of hardship and budgeting. Keep in mind how much weight will be off your shoulders once your debts are eliminated, and mark your “Financial Independence Day” on a calendar to remind yourself that freedom from debt is getting closer every day.

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See below for the top 4 reasons why quitting your debt settlement program should be avoided at all costs:

1. You’re on Your Own: You will lose the expertise of DMB Financial’s experienced debt negotiators, making it less likely that you will receive favorable debt settlement offers, if any at all. DMB debt negotiators have existing relationships with most major creditors, and know all the ins and outs relating to each one’s policies and terms, which in turn results in favorable debt settlements for our clients.
2. Active Settlements Will be Voided: If you are in the middle of settling an account, quitting the program will give creditors the opportunity to void any agreement between themselves and DMB. For example, if a settlement agreement of $10,000 has been reached on a $30,000 debt and you have made 2 payments of $2,000 towards the settlement amount, quitting the program will make the agreement null and void. This means that the $4,000 you have already paid will not be going to the $10,000 settlement amount, but will go towards the full $30,000, and you will still owe the full balance of $26,000 rather than the $6,000 settlement balance.
3. You Lose the Side Benefits: Quitting your debt settlement program will mean that you lose the side benefits of being a DMB client – such as membership in our Legal Club. The Legal Club offers free legal consultations, document reviews, and living will preparations in addition to discounted legal representation should the need arise.
4. You Lose Financial Guidance: Active DMB Financial clients are offered considerable financial advice and assistance as they near the end of their debt settlement programs. The purpose is to help clients make the transition from being a slave to credit card debt to being a successful long-term investor.

There will always be occurrences and circumstances that make quitting your debt settlement program an attractive option for any number of reasons. In the long run, however, sticking to the plan, completing your program, and settling your debt or solving your debt problems is the single most important thing you can do for yourself and your family financially.  

*Individual results may vary based on ability to save funds, amount of debt, willingness of creditors to negotiate, and the successful completion of all program terms. Program does not assume or pay any debts, nor provide legal or tax advice. Prudence should always be taken by consumers when reviewing contracts and disclosure materials. DMB’s services not available in all states.

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Clients of DMB Financial often ask what they can expect from their first settlement. You recognized a debt problem and enrolled in a debt settlement program. Now what happens?

Your funds accumulate in an F.D.I.C. insured special purpose account that was set up at the beginning of your program. Each month, as you contribute your payment to this special purpose account, the money accumulates until we have enough to begin settling one of your credit cards. We generally begin negotiations within a four to eight month time frame following your enrollment. The timing of negotiations depends on the amount of money in your account and what kind of terms each creditor is willing to take at a given point in time.*

In addition to the amount of funds available in your F.D.I.C. insured special purpose account, there are many other factors that will affect each individual settlement:

1. Type of Creditor: No two creditors handle debt resolution in the same manner, and negotiations are conducted on a case-by-case basis. Internal company debt resolution policies, credit scores and geographic locations are just a few of the items we take into account…
2. Balance of Debt: Some creditors are more apt to agree to a debt settlement if the debt amount on that account is higher. Again, this is determined on a case-by-case basis for each individual settlement and each individual creditor…
3. Status of Debt: Settlements are also affected by the delinquency status of the debt. -

Once we negotiate a settlement offer from one of your creditors, we forward this offer to you for review and acceptance. If you accept the terms, the settlement amount (and the DMB Financial success fee) is paid from your F.D.I.C. insured account. We suggest our clients retain this settlement letter (click here for a sample settlement letter) for general record keeping matters as creditors may fail to report this information to the credit bureaus.

At this point, we revisit your debt settlement plan, adjust the strategy if necessary, and you begin accumulating payments towards your second settlement. Once we settle with one creditor, we focus our attention on the next until each debt (account) has been negotiated and settled.

The first settlement is the most important. This is where we showcase the value we can deliver by negotiating debts as low as possible. If you haven’t gotten to your first settlement, hang in there…You’ll soon have one less credit card debt and be one step closer to financial freedom!

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*Individual results may vary based on ability to save funds, amount of debt, willingness of creditors to negotiate, and the successful completion of all program terms. Program does not assume or pay any debts, nor provide legal or tax advice. Prudence should always be taken by consumers when reviewing contracts and disclosure materials. DMB’s services not available in all states.

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The Situation

In the aftermath of a divorce, Andrew A. from Florida found himself buried under a mountain of debt. His ex-wife had decided not to pay a series of debts agreed upon in the divorce settlement that were tied to Andrew’s name. By the time Andrew realized what was happening, his credit score had fallen almost 200 points and he was struggling to get caught up.

The Solution

Andrew searched the internet for a solution to his growing debt problems, and decided to contact DMB Financial for a free consultation. Andrew’s personal debt counselor recommended a strategy that would fit within Andrew’s budget and leave him debt free in as little as 36 months.

The Result

DMB Financial quickly began to correct Andrew’s debt problems by initially settling his largest account and negotiating a favorable agreement with another. At the completion of his debt resolution program, Andrew had saved more than $14,000 representing 49 percent of his total debt.*

*Individual results may vary based on ability to save funds, amount of debt, willingness of creditors to negotiate, and the successful completion of all program terms. Program does not assume or pay any debts, nor provide legal or tax advice. Prudence should always be taken by consumers when reviewing contracts and disclosure materials. DMB’s services not available in all states.

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The Situation

In 2006, Magalie M. of Massachusetts was facing substantial debt problems. Growing home needs and mounting credit card bills had led to nearly $25,000 in outstanding debt. Between their mortgage and the other growing debts, Magalie and her husband were finding it increasingly difficult to keep their heads above water.

The Solution

A friend recommended DMB Financial to Magalie, who called and spoke with one of the company’s program consultants. Magalie learned there was light at the end of the tunnel, and was able to structure a strategy that worked on her terms and within her budget.

The Result

With a strategy in place and funds accumulating in an F.D.I.C. insured special purpose savings account, Magalie and her husband were able to settle all their unsecured debt in 36 months.* “It was a dream come true to realize we were debt free,” says Magalie. “I’ll not hesitate to refer any member of my family or friends to DMB. If I was a teacher, I’d give them an A+.”

*Individual results may vary based on ability to save funds, amount of debt, willingness of creditors to negotiate, and the successful completion of all program terms. Program does not assume or pay any debts, nor provide legal or tax advice. Prudence should always be taken by consumers when reviewing contracts and disclosure materials. DMB’s services not available in all states.

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A perfect example of Derek’s commitment to his clients can be found in the story of Griff H., a retired U.S. Navy Commander. In response to a Washington Post article warning of false promises from debt settlement companies, Griff wrote the author about the positive experience he recently had with DMB Financial, and specifically, his settlement consultant Derek Valley. “Derek negotiated a settlement with my largest creditor for 58% of the total amount owed,” said Griff. “He then settled my second account for 19% of the total debt owed, and a third account for 55% of the debt owed.”* He continued. “I am very happy with Derek and DMB Financial. Nothing was promised that hasn’t been delivered.”

Griff’s story is just one of the many success stories Derek has had a hand in creating. In the first half of 2009 alone, Derek settled more than $1.3 million in client debt for just over $600,000, representing total savings of more than $700,000 or 53% (not including DMB Financial’s fees). His commitment to helping clients effectively manage their outstanding debt problems is a perfect example of the spirit and dedication of DMB Financial’s entire staff. 

*Individual results may vary based on ability to save funds, amount of debt, willingness of creditors to negotiate, and the successful completion of all program terms. Program does not assume or pay any debts, nor provide legal or tax advice. Prudence should always be taken by consumers when reviewing contracts and disclosure materials. DMB’s services not available in all states.

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DMB Financial has six years of experience helping consumers eliminate their outstanding debt problems resulting in more than $87 million dollars in savings for company clients. We work hand-in-hand with clients to identify exactly how they got into trouble, and to build an effective strategy for settling/negotiating down the debt in as short a time as possible. Additionally, DMB Financial strives to educate their clients on sound financial planning to ensure continued financial freedom. The key to the company’s success lies in the dedication and commitment of its employees, who continually go above and beyond to provide solutions to their clients’ debt problems.

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