Debt Planning 101

Presenter:
ROCHELLE N. BELNAP,
Attorney at Law
October 2013

WHAT IS BELNAP & FORBES, PLLC?
We are a consumer advocacy law firm in Tempe, AZ.
We practice in consumer debt & credit issues like:
•

Debt Settlement

•

Targeted Credit Restoration

•

Credit Counseling

•

FCRA & FDCPA Litigation

We are attorneys but we want:
•

To change the way you think about attorneys;

•

To make complicated things, simple;

•

To be efficient and cost-effective;

Belnap & Forbes, PLLC
700 E. Baseline Rd. Ste. C-3
Tempe, AZ 85283
(480) 907-6088
attorney@belnapforbes.com

WWW.BELNAPFORBES.COM

WHAT YOU SHOULD KNOW ABOUT BELNAP & FORBES
Who are we?
Rochelle Belnap & Chris Forbes
What we do?
We both practice in consumer debt and credit
issues
Where did we meet?
We met in law school and have been best
friends ever since.
When did we start our practice?
In February 2012
Why and How did we get into this area of
law?
The $50,000 Mistake

Tempe, AZ 85283
(480) 907-6088


DEBT PLANNING 101!
What do we mean by debt planning?
Debt Planning is the process of evaluating your liabilities and figuring out
how to manage them and reduce your monthly expenses.

Today we are going to discuss the big 3!

CREDIT CARDS!

Tempe, AZ 85283
(480) 907-6088

MEDICAL BILLS!

2nd MORTGAGES!


BUT FIRST…
How do people get into trouble? LIFE!

Divorce
Bankruptcy

Unemployment

Tempe, AZ 85283
(480) 907-6088

Illness

Lost Home in Real Estate Crash


CREDIT CARD DEBT & CREDIT REPORTING
Did you know your credit score is based, in part, on your credit card debt.
1. Maxing out your credit cards is bad for your credit.
2. Making payments late is bad for your credit.
3. Having no open or active credit cards is bad for your credit.
4. Closing your credit cards can be bad for your credit.
How many of you don’t have a credit card?
If you don’t have a credit card, a secured credit card is a good option. Make
sure the bank is reporting to all 3 credit bureaus EVERY month! If you need a
recommendation for a good companies to use email me. [Subject: Secured
Credit Card]

Tempe, AZ 85283
(480) 907-6088


CREDIT CARD DEBT: THE BASICS
How much credit card debt should I have?
It depends. But in general, the total amount you pay
on your credit cards each month should be less than
10% of your monthly income.
Example:
Bob makes $3,000 a month after taxes. Then Bob’s
total credit card payments should not be more than
$300 a month.

Tell me, how many of you don’t follow this rule?

Tempe, AZ 85283
(480) 907-6088


CREDIT CARD DEBT?: SCENARIO 1
Are you on time, but feel like you are not making a dent?
•

•

Stressed but
managing

Option 1: Pay more money than the minimum payment. Prioritize,
Budget, Pay Down, Repeat. Need help figuring out the fastest way to pay
them off? Your financial planner aka your insurance guy can help- for
FREE.
Option 2: If you can’t afford to pay more than the minimum payment,
you can call your credit card companies and ask if they have a
forbearance program.
• PRO: Stop charging you interest.
• PRO: May reduces your monthly payment so you may pay it off faster.
• CON: They may close the account, or you may be unable to use the card
during the forbearance.

Tempe, AZ 85283
(480) 907-6088


CREDIT CARD DEBT?: SCENARIO 2
Scenario 2: You are currently late on your payments by less than 6 months.

Option 1: Forbearance Plan
Option 2: Debt Consolidation: a loan from a debt
consolidation company.
•
•
•
•

Shocked by what
you owe.

PRO: 1 payment a month
CON: Loan is either a Mortgage or a Car Loan.
CON: Low % of completion
CON: Not many good companies

Option 3: Debt Settlement: a company, like us, who help you
settle the debt for less than what you owe.
•
•
•

Tempe, AZ 85283
(480) 907-6088

PRO: The card is paid off
CON: The account is closed
CON: The credit card company may not negotiate with you until the debt is
in collection status


CREDIT CARD DEBT: MYTHS AND TRENDS
Scenario 3: The credit card debt is in collection or has been “Charged Off”

Common Misconceptions:
•
•
•
•

The meaning of “Charged Off”
What is a 1099-C?
I can settle for pennies on the dollar
“Settling the account will hurt my credit”

Current Trends:
•

Overwhelmed and hoping
it will go away!

•
•
•

Tempe, AZ 85283
(480) 907-6088

Charging you the default interest rate, finance charges,
and attorney fees.
Debt Collection companies are being replaced with
Debt Collection Law Firms.
Law firms are suing for credit card debt – years after it
was charged off.
Reporting the account every month on your credit
report.


TOO MUCH CREDIT CARD DEBT?: SCENARIO 3
Scenario 3: The credit card debt is in collection or has been “Charged Off”

Option 1: Debt Settlement
Belnap & Forbes, PLLC v. The “Competition”
•
•
•
•

Liability Assessment
Time: 3 to 6 mo.
Cost: 10% & 10%
Attorneys! We can represent you
in lawsuits

No Liability Assessment
Time: 6 mo. to 3 yrs.
Cost: 15% to 20%
Not Attorneys
If lawyers, stipulated
judgments are good!
• Who cares about credit?
• Don’t refer for BK
•
•
•
•
•

• Hate stipulated
judgments
• Handle the credit report
• Refer for BK if necessary
This doesn’t have to be you. Option 2: Bankruptcy. Chapter 7, 11, or 13. (Pros & Cons)

Tempe, AZ 85283
(480) 907-6088


CREDIT CARD DEBT: RECAP
If you have too much credit card debt you have
options but it depends on whether:
•

You are on time with your payments and whether
you can afford to pay more than the minimum
payment;

•

You are late, but not in collections;

•

You are in collections and you can afford to settle.

Don’t panic, and get a second opinion. (We offer
Free consultations)

Now you can skip the maze!

Tempe, AZ 85283
(480) 907-6088


MEDICAL DEBT: A CONFUSING TALE!
Does this sound this familiar?
You go to the hospital and you see a few
nurses, a physician’s assistant, maybe a
doctor or two, and people take your
blood, x-rays, ultrasound, cat scan,
and/or MRI, and give you medicine, an
extra blanket, and you may or may not
stay overnight.
Then you get bills and statements that say this is “not a bill” or “pay this amount”
but they contradict each other, and you get 5 from the same place, then you
receive more from 5 or 10 different places and you wonder – what the heck is
going on? Do you assume they will work it with your insurance company or that
they will eventually send you a bill that makes sense?

Tempe, AZ 85283
(480) 907-6088


MEDICAL DEBT: EXPLAINED & WHAT NOT TO DO
Why so many bills?
The people in a doctors office or at a hospital may
be independent contractors:
•
•

Have their own billing practices
Do not communicate with each other

Problems:
If you don’t pay, it will go into “collections” after
about 90 days. Every single contractor will have
their own debt collector and each will report on
your credit report!
What not to do!
•
•
•

Tempe, AZ 85283
(480) 907-6088

Panic
Pay it with your credit card
Not pay other bills so you can pay your medical debt


MEDICAL DEBT: WHAT SHOULD I DO?
DEBT SETTLEMENT!
•

Why? You will pay significantly less than what they are billing you!

•

Why not Bankruptcy?


Liability Assessment
Time: 3 to 6 mo.
Cost: 10%
No more phone calls or letters!
Attorneys
We review the bills and make
sure Insurance is billed!
• Handle the credit reporting!
•
•
•
•
•
•

Tempe, AZ 85283
(480) 907-6088

v.

The “Competition”

•
•
•
•
•
•
•

No Liability Assessment
Time: 6 mo. To 3 yrs.
Cost: 15% to 20%
No more phone calls or letters!
Usually not attorneys
Do not review billing
Who cares about credit?


SECOND MORTGAGES: CAN I DO SOMETHING?
Yes! But it depends.
If you are “upside down” on your property – meaning that what you owe is way more than
what the property is worth- you may be able to do one of the following:
•

Option 1: Save our Home Program- Principal Forgiveness! [Subject: Save our Home]

•

Option 2: Negotiate a settlement to pay off the second mortgage.

•

Option 3: A Chapter 13 bankruptcy may allow you to do “lien stripping” where you can discharge the
second or third mortgage.

If you have “equity” in your property- meaning that what you owe is
less than what the property is worth- you may be able to :
•

Option 1: Negotiate a settlement to pay off the second mortgage.

•

Option 2: Sell!

•

Option 3: Refinance

Tempe, AZ 85283
(480) 907-6088


SECOND MORTGAGES: THINGS TO CONSIDER

Tax
Liability!

Can you afford
to settle?

Are you headed
for Foreclosure?

Is bankruptcy an option?

Tempe, AZ 85283
(480) 907-6088


DIY DEBT SETTLEMENT PIT-FALLS
If you are going to try to do Debt Settlement on your own remember
the following!
1. Verify, Verify, Verify!
2. Get it in Writing!

3. Don’t forget the Credit Reporting!
4. Don’t forget the 1099-C!
5. Don’t forget to rule out Forbearance Plans and Bankruptcy!
NOTE: Settlements will depend on your credit, financial position, the bank you are
dealing with, whether you are current or delinquent, and many other factors!

If you want more information, read our Blog! We have guides, DIY tips, and all sorts
of information!

Tempe, AZ 85283
(480) 907-6088


Special Offer:
We will give you or someone you refer to
us 25% off our debt settlement services if
they come in for a free consultation by
November 8th 2013.
Code: Debt Planning 101

Let us be your ace in the hole!

Debt Planning 101

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