VIRGINIA BEACH, Va. — Our finances are of the most important things in our lives. If you fall behind on your bills, it can be easy to get caught in a cycle of only paying minimums with high interest.
That is what happened to Ian Spiegel-Blum who lives in Virginia Beach. He says life quickly spiraled out of control after he lost his job of 13 years. He opened up to me about how he is paying down more than $100,000 in debt.
“The hardest thing was just facing it,” says Ian Spiegel-Blum. “I had just opened a business and just moved back to Virginia Beach after my father died, we just bought a house, and so we were kind of unprepared,” he added.
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Spiegel-Blum and his wife had taken out loans and opened credit cards to pay for the mounting bills, but he says interest rates kept them trapped.
“They're high interest. I mean, 25% to 30%,” he says. “The ones I was paying ranged between 18% to 30%.” With the high interest rates and growing debt, the couple was paying about $7,000 each month.
“The interest rates are such that, you know, you're not even really touching the principle,” he says.
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Spiegel-Blum tells me he looked online for a company that could help. In fact, he contacted several that promised to lower his monthly payment but could not say what that total price would be.
“You’ll see things where you’re paying $6,000 or $7,000 and they’ll get it down to $1,500 but they can't promise that because they don't know. They have to then negotiate it with your creditors, and in the meantime, your credit is just utterly destroyed,” he says.
His bank then recommended he contact Money Management International. MMI is a nonprofit credit and housing counseling agency.
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“We want people to understand all the options that are available,” says Thomas Nitzsche, the vice president of public relations for Money Management International.
In addition to his role as vice president of public relations, Nitzsche is also a financial educator.
“We are simply working with their existing creditors to reduce the interest rates, on average, to around 7% so that more of their payments going to principal rather than interest, to get them out of debt, on average, within four years,” he says.
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Nitzsche says medical and housing issues, divorces, and underemployment are the top reasons their clients are in debt.
“We’re seeing a lot more people this year than we did last year. It's up about 45% over last year,” says Nitzsche. Spiegel-Blum is one of those new clients in the debt management program. A debt management plan (DMP) is a structured debt repayment program that doesn't require a loan. It requires no credit check and can be canceled at any time.
“It was a bit of a difficult process because you have to give them your entire budget, all of your all of your payments for your day-to-day life, as well as your creditors and what you're owing, your interest rates, all that stuff,” he says.
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Though he is on a strict payment plan, Spiegel-Blum says so far, he's paid down 20% in a year.
“I think a lot about, you know, the phrase ‘this too shall pass,’ and that's true -- it will, but you do have to take that first step of taking the next step,” he says.
There are several programs you can take advantage of depending on your situation. MMI offers debt management, debt consolidation, credit counseling and credit review.
