   
A world of hurt
Credit counseling helps customers in financial peril
By RACHEL PARKER DICKERSON
LOG CABIN STAFF WRITER
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 (EDITOR'S NOTE: This is the 14th in a series of stories on partner agencies of the United Way of Central Arkansas, formerly the United Way of Faulkner County.)
AMike Huddleston of Consumer Credit Counseling said the typical customer who comes to him for help is "in a world of hurt." Huddleston is a consumer credit counselor. He works with individuals to help find alternatives to bankruptcy. The agency is also a partner agency of the United Way of Central Arkansas, and Huddleston works with applicants to the United Way revolving loan program. The revolving loan program is for people who meet certain income criteria, who are working and who need a vehicle. During an appointment, Huddleston prepares a budget to determine whether they can afford a car payment. Then the United Way decides whether the applicant qualifies for a $5,000 loan for a vehicle. Community Impact Director Pamela George of the United Way said 11 people are in the program now.
"We've had a good partnership with the United Way for years," said Huddleston. "It's a good program. It has put many a person in a car. We're happy to do it because that keeps us with ties to the United way, which we have always felt was an important tie to the community." The agency's focus, however, is on debt management plans, he said. A law passed about two years ago states that before a person can declare bankruptcy, they are required to get a certificate from a certified counselor to show they have no other options, Huddleston said. The customer fills out a profile, listing all of their creditors and amounts owed. Huddleston inputs the information into a software program and quotes them a single payment, he said. Often, the customer has maxed out their credit card and is paying 15 to 30 percent interest and a $35 late fee. Some are also paying a $35 over-limit fee, so when they make their minimum payment, the balance is still going up, Huddleston said. "They're a customer for life because their minimum payment isn't even covering the fees and interest," he said. The credit card companies offer a second chance with a structured program, Huddleston said. Credit counseling is that structure. Each company has a different policy on what amount of payment they require. "If you can meet a minimum amount every month, they will lower your interest rate," Huddleston said, however, the customer cannot use the card during that time. Another option for some customers is a bank consolidation loan. They can go to the bank and have all their credit cards consolidated into one payment, Huddleston said. Home equity loans were popular before the subprime mortgage crisis hit. People with a lot of equity in their homes could take out a second mortgage and use it to pay off their debt. Other options include selling their home and getting a second job to pay off their debt. The last resort is bankruptcy to protect them from their creditors, Huddleston said. "When they come in for their appointment with me, we look at every possibility that exists besides going to an attorney and declaring bankruptcy, which is a mark on your credit bureau record for 10 years," he said. He said he believes going to a financial counselor with financial problems is much like going to the doctor with health problems. "Our debt management plan helps a tremendous amount of people," he said. He added, "We make ourselves available for any organization that would like a speaker (on the topics of) budgeting, the credit card industry or credit bureau reports. For more information, call 450-9399 or 1-800-255-2227. (Staff writer Rachel Parker Dickerson can be reached by e-mail at rachel.dickerson@thecabin.net or by phone at 505-1277. Send us your news at www.thecabin.net/submit)
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