The Truth About Debt Relief (06-15-2008)
Doug: Good Evening everyone this is the “Truth about debt relief” I am your host Doug Johnson and I want to welcome everybody here this evening!
Investment counselors, CPAs, insurance agents and stock brokers manage our assets. But tonight I have a guest who helps people manage their liabilities, in other words manage their debts. His name is Doyle Breckner. Some of the claims that Doyle makes are pretty amazing. He says that he can help people pay off debt, including student loans, consumer debt, credit card debt and car payments in as little as one to three years. His client’s interest is reduced not by thousands, but by tens of thousands of dollars. He can show people how to pay off a 30 year mortgage in another three to five years and save thousands and possibly even hundreds of thousands of dollars in interest. That savings of interest is accomplished without refinancing, without doing balance-transfers and even without talking to a banker. I might also add that he does not use a HELOC in helping people with their mortgage. He shows people how to reduce payments by hundreds of dollars. And the average savings on his program is a $120,000. Clients are able to do all of this with their current income and they do not have to get a second job. So Doyle’s program is not about going out and mowing lawns, delivering pizzas and so on, to earn the money to pay for this. Now all of this can be accomplished, according to Doyle, while simultaneously improving your credit score. But probably the most intriguing point that Doyle makes about his program is that, after he helps his clients get out of debt, he encourages them to invest that money, which is usually in excess of $1500 a month. After he’s helped them to pay the bills, he helps them fund a nest-egg for their retirement. Doyle welcome to our show again this evening!
Doyle: Yeah I am here Doug!
Doug: I have just shared with our listening audience some of the amazing points that you make in your literature and webinars. I have to tell you Doyle that it all sounds pretty amazing. Have I exaggerated that or is that all factual information?
Doyle: Well Doug, it is factual. I mean what we do is we have a Liability Management Group, where we help our clients get rid of their debts. Really our motto is that, “this is a financial plan for your life”. So we have coaches that work with individuals to really get a plan together, that’s a long-term plan to take into consideration their personal goals and situations to get them on a plan to get rid of their debt long term.
Doug: Okay! You say you manage their debts. Can you give me some specifics about how you go about doing that?
Doyle: Oh sure! What we do Doug, is we will actually assign them a personal coach when they join our program. And our program is the automatic debt eraser and what we do is we’ll actually assign them a personal financial coach. And that coach will get to know them, get to know their situation, get to know their debt situation, their personal goals, their income situation, their cash-flow, and their budget situation. They are also provided a budget counselor and then basically with them and based on their own personal goals, we’ll tailor make a plan to meet those goals.
Doug: Let me mention your website. It is wemanageyourdebt.com. Again, that is wemanageyourdebt.com. So you assign a personal coach? Doyle this similar to somebody having an investment counsel, or a CPA, or an insurance agent, or possibly a stock broker manage their assets, only you’re managing their liabilities. Is that right?
Doyle: Right!
Doug: Yeah!
Doyle: That’s right we manage people’s liabilities. You know most people who are listening tonight have people who manage their assets. But you know I am talking about folks like financial planners or stock brokers or . . .
Doug: CPA’s maybe?
Doyle: Yeah exactly! You know insurance agents just all the folks that we are all familiar managing our assets and that are really conventional wisdom. All that conventional wisdom tells is we need is to have somebody professionally managing our assets and I do agree that, that’s important. But for most folks their liabilities are much more important than their assets because the truth is the liabilities are much bigger, there are more of them than most people have assets. So I don’t know why there aren’t more liability management companies or programs out there but really should be, since liabilities are much in larger figure than assets proportionally. And they have a real long term reach if you don’t manage your liabilities properly. You’ll end up being like a statistic that actually came out from our government, that 96% of people who are reaching retirement age are either dead or dead broke by the time they reach age 65.
Doug: Wow that’s amazing! So you’re saying that net worth equals your assets minus your liabilities.
Doyle: Right!
Doug: That’s your net worth. But people tend to say that net worth is, we are led to believe by professionals that net worth is your assets.
Doyle: Yes!
Doug: How much money would you say that people free up typically when you help them get out of debt? How much money does it free up for them to then do some investing and plan towards their future?
Doyle: Well Doug, the average person or the average family in this country has $275,000 worth of debt including their mortgage, car loans, credit card debts, medical bills, and student loans, in other words, all of their debt. And that is just the average. A lot of people have even more than that. And the average amount of interest that the average family pays every month is about $2500 every month.
Doug: Say that again. That average, I want to make sure that I got that correct. You said the average interest the average American family pays is $2500 a month?
Doyle: Yes, just in interest!
Doug: Oh my goodness!
Doyle: And the sad thing is that doesn’t pay a penny of their debt. That’s just burnt up in interest every month. So that’s why managing liabilities is really so important because it is easy to live our lives and forget about all the interest repaying and really not worry about it too much and end up getting to the end of our lives and realizing that we paid hundreds of thousands of dollars over our lifetime in interest that we could have saved, if we were out of debt.
Doug: You know I noticed in your literature, you say that the average family pays $40 a day. I guess that adds up to $2500 a month. I guess didn’t do the math there so it just kind of surprised me here tonight, but you know if somebody were driving down the road and gasoline was running down their car, and it was costing them $40 a day in gasoline, they wouldn’t go another block without stopping at a car repair shop and getting that fixed. Why is it that people, and I’ve talked to them every day, pay that kind of money and interest and they are not alarmed by that. They just seem to be content with it. Why is that?
Doyle: Well, I think Doug goes to back to the way we are brought up our educational system. I mean it is really just not a big focus of the main stream. You know, I am not a conspiracy theorist or anything but I do believe that it definitely plays into the hands of the bankers that we feel that way. So it is just a matter of not being taught and not being educated and when we are not educated about the consequences of debt, then we really just don’t think about it. That’s the sad truth. And when you mention $40 a day, Doug just to clarify that, that’s just on mortgages okay? That doesn’t even consider the credit card debt and all the other debts that people carry. So that’s where we come up with $2500 a month figure.
Doug: I see! We have a caller standby. Ellen from Nashville, how can we help you this evening?
Ellen: I have some comments for Doyle.
Doug: Okay
Ellen: I was thinking Americans have been brain washed about interest rates, as if that is just a normal way of life and that they are supposed to budget for it. Well, I don’t feel like that way. I had decided years ago I didn’t want to be tied to the lender anymore and I have down-sized my house so I could pay cash for it and I don’t buy a car unless I can pay cash for it. I bought my last car at an auction and so I don’t have any debt anymore and the money that I saved, I invested so that my kids could go to college and so I can have money for my retirement. It doesn’t seem like that’s the normal way to think in America.
Doyle: Wow! Was that Caroline?
Ellen: No this is Ellen.
Doyle: Wow Ellen! I am happy for you. You’ve applied in your life a lot of the principles that we teach in our program and I agree with you completely that’s why we teach these principles because interest is such a drain and it robs our family of a future. That’s really what it does and a lot of it just goes back to what we’re just not taught about interest. Look at conventional wisdom, financial gurus, your stockbrokers and insurance agents, a lot of them are focused on asset-building. But your net worth is your assets minus your liabilities. But people are focused on increasing assets and they forget about the liabilities. So great job!
Ellen: Well I don’t think most people understand how much it costs once you are in retirement. My mother just moved into assisted living and it is costing $3700 a month. I just don’t think people are prepared for that if they are spending all their money paying off debts and they are not putting any money aside. What are they going to do when they have to go to assisted living? Are they going to allow their children to pay for it?
Doyle: That is a lot of what is happening. You know and another point that I’ll make Ellen, is that it is not just the amount of interest that we pay over our lifetime because that is bad enough in itself. We are talking hundreds and thousands of dollars. We are not on a plan to get rid of our debt, but there is something else I’d like to mention called the opportunity cost. And what that means is that it is the opportunity lost that we could have had if we didn’t spend all that money on interest. If you have got two to three thousand dollars a month that you are used to pay to your creditors for your mortgage and your credit card debt and all that, and you invest it with a six to 10% consistent annual return, you know a safe return on an investment, in less than 10 years you are going to generate hundreds and thousands of dollars very quickly for retirement. Actually, it is not out of the question to be able to generate over a million dollars in a retirement nest egg pretty quickly.
Ellen: Well that’s all I have.
Doug: Thank you very much Ellen for calling in. Great comments there, good luck to you!
Ellen: Sure, thank you.
Doug: Thank you very much. Doyle last night I was watching a nation-wide television host take callers and she was counseling them about their debts. She told one of them to get a full time job and pay off the highest interest first. Now I am interested to see what your philosophy is about this, but we are going to take a short break and when we come back you are going to answer that for us.
Doyle: Okay
Doug: This is the “truth about debt relief” please stay with us!
COMMERCIAL BREAK
Doug: I am Doug Johnson. My guest this evening is Doyle Brueckner. His website is wemanageyourdebt.com. That is wemanageyourdebt.com. Now Doyle, before the break I talked about my experience in watching a program last night on television where an individual who was taking calls from people who had debt and she was offering suggestions and advise. She suggestedthe callers pay off the highest balance first on their credit cards. How do you feel about that?
Doyle: She suggested the highest balance? Whatever debt they have the highest balance they start with that account?
Doug: No, I am sorry she suggested the highest interest rate, pardon me.
Doyle: The highest interest rate? That’s a common approach, Doug. There are several different ways that people go about paying off debt and that is a common approach, to pay off the highest interest rate debt. Another common approach is to start with the lowest balance on your debts, pay that one off quickly and then move on the next lowest balance and roll it up that way. Another common approach is what we call the pay off method. It is a little bit more complicated where you actually divide the balance of your debt, the minimum payment into the balance and get a pay off number and then prioritize it that way. Basically finding the debts that are the easiest to pay off is the third way. We have actually a software program, our ADE software that does the prioritization for us and it is not necessarily the highest interest rate, or the lowest balance, or the pay off method, but what we do is, we actually prioritize their debts by using the minimum payment as well and do that calculation which is something that a lot of people forget to get a prioritization together that makes sense. An interesting fact is that if you only have seven debts, there are actually 5000 different ways you could prioritize those pay offs. We will prioritize for our clients a way that will work best for them, one that is based on their goals.
Doug: So the software has 5000 options if you’ve got seven credit cards and it chooses the option what’s best for you. Is that what you are saying?
Doyle: Yes, that’s right!
Doug: Wow!
Doyle: And along with that too it is not all based on math, I mean a lot of it is, yes but we also take into consideration personal situations and personal goals. You know we may have a client who just absolutely hates Citi Bank for some reason. Maybe they had a bad experience in the past or who knows what, or they have a family loan they want to get paid off quickly or something. We take all that into consideration and that’s why it is a tailored program. So paying off the highest interest rate debts first is actually a way that I don’t recommend you go because a lot of times your highest interest rates debt maybe a larger balance credit card or something like that and it is very discouraging if you don’t see any progress being made.
Doug: Our call in number is 800-688-9522 again that’s 800-688-9522 or *9522 from your Verizon Wireless. My guest this evening is Doyle Brueckner with Dynamic Solutions Network and his website is wemanageyourdebt.com. And Doyle my next question is it seems as though somewhere in the literature that I read that you have a guarantee that you can save people at least ten times the cost of what you charged them for your service or they get a full refund.
Doyle: Yes that is correct Doug!
Doug: Wow! Can you elaborate on that?
Doyle: Sure! And that’s just our written guarantee. Basically it is very simple. Once we’ve done the analysis of your situation and we’ve worked with your creditors, lowered your interest rates and payments, you know done your budget analysis, put you on the program, we actually provide you with a specific financial records that tells you exactly when each debt will be taken care of, how much interest you are saving on the program and if we do all of that and we can’t show you on the financial report that you’re gonna save ten times the cost of the program as far as our fee, then we actually give you your money back. That’s just our written guarantee and the truth is that most of our clients save way more than that. It is usually anywhere from 20 to 100 times the cost, so it is very, very effective.
Doug: I think our listeners would love to hear a real life example. Last time that you were on our show, you talked about a 62 year-old woman who owned her own business. That was really an intriguing example. Can you recall talking about that?
Doyle: Yes, I think I know who you’re talking about, one of our clients who actually signed up into our program last year, about a year ago. She was 62 years old and she had her own business and obviously I am not going to be giving out any personal information. Basically this woman was looking at her life and realized that she only has so many years left and even though she was running her business and making a good income, she just felt like she was spinning her wheels and never going to get out of debt. She had decent rates on her credit cards when she came to us. She just felt like she was going to have to work until she died. But she became a client about a year ago and we worked with her. We ran the numbers on her debt through the software, we did the analysis and basically on her current path she was scheduled to be in debt for about 29 years, so we are talking into her nineties.
Doug: Oh my goodness!
Doyle: Yeah and that’s real common. And we see people anywhere from 25 to 45 years on a regular basis they are scheduled on the banker’s plan to be in debt. Well, we ran her numbers and worked with her to help her with the cash flow and budget management. We lowered some interest rates with her creditors and payments. We did some simple balance transfer things to lower the rates of payments that we could apply more money to principal. And basically we ran our Algorithm’s so that we prioritized her debts. When it was all said and done, we were able to get her on our plan, she’s on it right now to get rid of all her debts and I am talking over $300,000 worth of debts in total complete debt freedom and I believe it was six years and two months at the time. And so I think we are down close to about five years now.
Doug: $300,000 in six years!
Doyle: Yes that’s right!
Doug: The lady I listened to last night suggested that most of the people who called in that they go get a full time job to pay off the debt. Did she have to go out and produce more income to do that?
Doyle: No, she didn’t actually. Again as I said, she runs her own business and she’d always made a good income and the issue with her is like with most people. It is not really a matter of not making enough money. It is a matter of not keeping enough money or actually using the money that you made in a good fashion and not wasting the money that you make. It was basically a matter of organizing where her money goes and how she spent on her budget. That’s really what it takes.
Doug: Wow that’s amazing! Can you think of any other good examples of people who you feel have been a real success for your program, anything that comes to the top of your head?
Doyle: Well Doug, you know a lot of people on our program that have been real success stories are another couple that I can think of, probably about mid-forties and they have your typical $250,000 worth of debt. When they came to us, they were actually behind on their mortgage a couple of months, they were quite a bit behind on their credit card debts and they were really, really struggling. He had actually had about 4 months off from his job, because of a back surgery and so they were really, really struggling. We did the whole process with them and we put them on a good financial plan and with them it is a little different because we actually coupled it with a debt settlement program, with our debt settlement program as well as the ADE program. Because sometimes the cash flow doesn’t work out you know they just are not bringing in enough money to cover everything. So we actually put them on a solid debt settlement program, they’re gonna be out of credit card debts in about three years and then I believe they are going to be out of debt completely, including their mortgage, in about ten years.
Doug: Now Doyle, you will take consultations tonight or take calls tonight and do some consultations is that correct?
Doyle: Sure!
Doug: Okay I am going to give out that call in number one more time. It is 800-688-9522. That is 800-688-9522 or *9522 on your Verizon wireless. Doyle how familiar are you with the credit counseling type of debt consolidation program? Is that something that you are very familiar with?
Doyle: Absolutely yeah!
Doug: Okay! How does what you do compare to them? As you know I am very opposed to them and I feel like they have lot of drawbacks. How does your program overcome the drawbacks of them?
Doyle: Well Doug, I am not a fan of consumer credit counseling, you know the non-profit organizations out there. So, and just in a nutshell what they purport to do is to take all unsecured debts and lower interest rates from 25 to 30% down to 6 to12%, and lower the payments but realistically that doesn’t happen, and basically put them on the plan to pay off their debt faster. But there are so many downsides with the bad credit that you get before they could do anything for you, so it destroys your credit. With our program we do something that’s similar when necessary we do communicate with the creditors and lower interest rates and payments but we do it in such a way that it doesn’t show up on your credit report for as it does with their programs. So you know that is a big thing for your credit rating. Consumer credit counseling also takes your money on a monthly basis and you actually send a chunk of money to them every month and then kind of sit back and hope and pray that they give it to your creditors. Honestly, most of the time it is late when it has to go through consumer credit counseling companies. What we do is we manage our program, our whole ADE program in such a way that the money doesn’t go through our hands. We actually have our clients set up a specific checking account in their name at their local bank. They put money into it on a monthly basis and we manage their liabilities out of that account. But their payments go directly to their creditors without having to go through us.
Doug: One of my biggest oppositions to credit couseling based debt consolidation programs is that when you make one late payment during a 16-month program, you default, and everything you’ve done doesn’t work any longer. You defaulted on that program and it is just all over basically.
Doyle: Well I think the retention rate on the consumer Credit counseling industry is under 20% that actually even complete the program. So you’re right, I mean the dropout rate is really high.
Doug: Well Doyle, we have to take a short break right now and when we come back Doyle is going to talk about HELOCs and how they affect your mortgage? Please stay with us. This is “the truth about debt relief.”
COMMERCIAL BREAK
Doug: Welcome back! I am Doug Johnson and this is “the truth about debt relief.” My guest this evening is Doyle Breckner. Doyle when we took a break about a minute ago, we started talking about HELOCs or money merge accounts. I get asked a lot about those and I know you’ve done some research in that area. So what can you tell us about the viability of a HELOC?
Doyle: Well Doug, it seems like quite a few companies that have popped up over the last couple of years that have been really marketing the money merge account programs pretty hard.
Doug: Right.
Doyle: Originally they say it was developed in Australia and is now making its way to the US. What a HELOC or money merge account is basically combining a HELOC, or home equity line of credit, which is a second mortgage, with the traditional way you would use your checking account. You would get a HELOC for maybe $20,000, pay half a portion or your mortgage with that, pay off some other debts with it, and then you deposit your paychecks automatically into your HELOC and pay down the debt with whatever paychecks you deposit into it. You then write checks out of your HELOC account that cause your debt to go up. It is kind of like using debt as a checking account and basically you know the big advantage that you hear promoted is that by having your debt structured this way, because of the way a HELOC is an open ended line of credit as opposed to a close end mortgage loan, the way interest is calculated will tell you that you can save hundreds of thousands of dollars on your mortgage and get out of debt in less than 10 years.
Doug: How much truth is there to that? (Laughter)
Doyle: Real issue, isn’t it Doug?
Doug: Right yeah!
Doyle: The truth about debt relief!
Doug: Yeah!
Doyle: Well that’s the propaganda. I am a numbers guy and so I’ve really done a lot of research on this and a read a lot of spreadsheets and numbers to basically dig into to find out exactly how it works and honestly there is a little bit of truth in the fact that if you run your finances this way and your debt this way, you will save a little bit of money, all other things being equal. You’re spending and everything else would have to stay the same. But you’ll be shocked when I tell you how much is saved? On a thirty year mortgage, as a result of having a HELOC or a money merge account, you will save about three months on that mortgage.
Doug: Wow three months!
Doyle: Basically it‘s pretty much nothing you know to save three months on a thirty year mortgage. And the reason that you do automatically save money is because you have every single day the lowest amount of debt possible. Because you really don’t even have a checking account, all you have is debt and so your whole paycheck pays your debt down and then it goes up and you pay it down again. But here’s the real thing, here’s the crux of the matter, Doug with this money merge account. The reason they say you can get rid of your mortgage in a third of your time and save hundreds of thousands of dollars of interest is because of something they call the spendable extra income. Basically, your discretionary income is another word for it. And basically what that means is that you are taking for granted the fact that you are bringing in more money than you spend each month. And actually that is the case. And when you’re structured this way, if you do bring in more money, if your paycheck is more than your bills you will get out of debt; you know half the time, a third of the time. But the reason that you’re getting out of debt that way is because of the extra money that you are applying to the principal on your debt.
Doug: And you don’t need a HELOC to do that, would you?
Doyle: Well that’s the entire point because basically with our program or you can even do it yourself. If you have $500 a month in discretionary income, don’t spend $3500 to enroll into a money merge account HELOC program. What you need to do is to apply that extra $500 check to your mortgage company each month and you’ll actually get out of debt faster by doing it that way on your own than a complicated HELOC. Now there’s lot of downsides about the HELOC too that I’ve been talked about and risks that you open up yourself that if you are not disciplined you can actually get a lot more debt now with the HELOC program so you’ve got to be careful and I personally do not promote a HELOC program because I don’t believe in it.
Doug: Can you take some minutes just to mention the downside. That is new information to me. I am sure it will be new to some of our listeners.
Doyle: Well sure, Doug! The biggest one is that you have another debt and it is your HELOC on your line of credit or second mortgage. And a lot of times what you’ll do is you will take that HELOC and the $20-30,000 you have approved for, and pay off your credit card debt because it is at a lower interest rate than even a car loan or something like that. Mathematically that’s okay. But the problem is that you now have say, $20,000 worth of open, available credit-card credit available to you because everything else is paid off. Well you know that new furniture for the house, the new boat that you take out on the lake, that all becomes pretty attractive when we have the ability to go get it. So if you are not using a real strong discipline which is really the main problem in people’s finances to begin with it all goes back to the discipline and you know the actual self-control that people need to be exercising. That’s a dangerous situation like when you do any kind of consolidation, the same thing applies. If you are not disciplined you’re going to find out that five years down the road, you’re gonna be in a much worse position than you were when you initially enrolled in the money merge account.
Doug: Okay Doyle, we’re gonna have to take a short break. When we come back Doyle is going to talk about why you should pay off your mortgage. This is the “Truth about debt relief” please stay with us.
COMMERCIAL BREAK
Doug: Welcome back to “the truth about debt relief”! This is Doug Johnson. My guest this evening is Doyle Breckner with Dynamic Solutions Network. Doyle, I wonder if you could give out your website, e-mail and telephone number please.
Doyle: Sure Doug! I’ll be happy to. Our website is wemanageyourdebt.com. That is wemangeyourdebt.com, and the phone number here in Nashville is 615-942-0955. That is 615-942-0955 and my email address is doylebreck@adenetwork.com. That is doylebreck@adenetwork.com .
Doug: Okay Doyle, I wanted to finish the show by talking about your strategy of paying off your mortgage, as opposed to not paying, which is the typical traditional advice that we get. But we’re running short of time. But what I do want to end the show with is having you just give a brief explanation of some of the other services that you offer.
Doyle: OH sure, Doug! Our ADE program that we’ve been talking about tonight, liability management programs, and we have several other programs that tie into that. One is our debt settlement program, that’s a program where we will take someone who cannot afford to make the minimum payments to the credit card company, secure and unsecured debts and we negotiate with their creditors to lower the principal balance, have them save the money and get out of debt. So we have that program. We also have bankruptcy program as well for folks that are just really upside down really and can’t even afford to settle their debt. And we have a bankruptcy program that we offer in all 50 states. We also have an IRS consultation program for folks that have IRS debts, maybe they haven’t been filing returns or have other IRS issues. We have a law suit intervention program for folks that have been behind on their debts for a while and maybe they have gotten sued and they don’t know what to do. We have a program to help with that. We also have asset protection and estate planning program where we will help protect your valuable assets that you do build up over your lifetime and it is really important that you do. That’s a summary of several of our programs Doug.
Doug: Okay! When you say asset protection you are referring to paycheck, real property and what else, wages perhaps?
Doyle: Yes exactly! Wages, real property, businesses, you know any assets that you have, cars anything like that.
Doug: Well Doyle, it is always a joy to have you on the show. There were other questions that I wanted to ask and some other information I am sure that our listeners would have enjoyed, but they can go to your website once again that is wemanageyourdebt.com. So Doyle, thank you so much for being my guest again this evening.
Doyle: Okay Doug, thanks for having me on.
Doug: I would like our listeners to call in this week and let me know what you think of our show. My number is 615-971-0489, that is 615-971-0489 and my email address is doug@relieveyourdebt.com. My website is relieveyourdebt.com. I want to thank everybody for joining us this evening, this is the “truth about debt relief.” We’ll see you next week. Good night everyone!
NOTE: Doug has been broadcasting in the Nashville area since July of last year, but beginning February 10, and every Sunday night thereafter, Doug’s show may be heard in 28 U.S. states on 1510AM or worldwide on this website. Please tune in from 9:00 p.m. to 10:00 p.m.
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