Debt elimination plan - would you buy it?

LeeH · 05-19-2005, 09:03 AM

I responded to an ad on Craigslist for a sales position. The company sells a debt elimination plan. It sounds like a great idea and will certainly work, but will people hand over control of their finances?

It starts like debt consolidation, except the company takes control of the money and agressively pays off debt. The client takes out a second mortgage. That money is used to pay off as much debt as possible. The company has a computer program that looks at principle, interest rates, and terms to direct what order the debt will be paid off. After each debt is paid off, the "extra" money is pooled to knock out the next debt. Even the primary mortgage and second mortgage are paid off in 8-10 years.

If someone were motivated they could certainly do this themselves. However, as written, the company uses the ACH system to make the payments on the client's behalf. The client receives a statement each month showing all activity.

Go here and click on "Client Presentation" to see more.
http://www.gulfstreamteam.com/life/

Seems like a great plan... I just wonder if people will be willing to sign up.

jrdavid68 · 05-19-2005, 09:23 AM

The first thing I would want to know is what's in it for the company, how much is this going to cost the person that signs up? Is the company listed as a lien holder on the second or something?

cowtown · 05-19-2005, 09:27 AM

I would never transfer control of my family's assets to a third party. Never.

Jims5543 · 05-19-2005, 09:33 AM

I read this book cover to cover when I didn't have a pot to piss in.

http://www.amazon.com/exec/obidos/tg/detail/-/0671700995/002-2873884-1257611?v=glance

I am in the process of re-reading it now. I have used a lot of his plans in my life and they have served me well.

The book might be a little dated on some subjects but the overall theme is well presented and useful.

I agree with cowtown I would never hand my familys assets over to a third party.

84porsche · 84porsche's Garage

I personally would not buy it but so many people are financially uneducated including myself and this alone is enough to sell. I have much more knowledge than many but because I choose to and I am a starting accountant. People first off don't like to be told what to do with their money but if even a false hope of getting out of debt or being able to purchase anything they want when they need or want to, people will follow. I think we have created a society that says debt is ok and as long as you are in debt you cannot escape the "rat race." I am currently reading a book "Rich Dad, Poor Dad" and this is opening my eyes to mistakes I have made. I am learning by trying to get myself out of debt while I am young so I don't end up caught in the mess of every other American who spends most of their life working at a job they may or may not like and feeling trapped paying for a house that they may never own.

Dantilla · 05-19-2005, 10:07 AM

While I also would never give my checkbook to a stranger, it's because I control it very well, thank you.

But for people who have made a mess of their finances, and realize that they lack knowledge of how money works, I'm sure some percentage would be willing to give someone else a chance to straighten them out.

Hopefully, they would check out the company very well. How long has it been in business? What kind of success rate? Any further counceling to prevent a deeper pit in a few years? Most of all, I would want to talk to SEVERAL former clients and ask a whole bunch of questions.

Hey- For you it's simply a job offer. If you decide to take it, you're not making a commitment for life.

cowtown · 05-19-2005, 10:36 AM

Quote:

Originally posted by SoCal911SC
The people you would be selling to are generally the irresponsible, irrational, and, most importantly, the pool of people that is most susceptible to sales talk and being sold things they don't really need. That's what got them where they are in the first place!

Cynical, but so true. This (PP) is probably not the best group of people to ask, demographically speaking.

TerryBPP · 05-19-2005, 11:19 AM

I heard a story once about an online company offering to consolidate debt and offer a extremely low interest rate for a small one time fee. Ended up the company would get these low rates from a company offering low introductory rates. Then when the credit source raised the rate, the debt consolidator disapeared. Keeping the initial fee. Leaving the clients in the same or worse shape the before.

Superman · 05-19-2005, 11:43 AM

Quote:

Originally posted by cowtown
I would never transfer control of my family's assets to a third party. Never.

Colin and I agree on few things, it seems. But we agree completely on this.

LeeH · 05-19-2005, 12:39 PM

I got a little more info after talking to the manager. They've been doing this since 1997. Each month the money is deposited into an individual trust account at Suntrust Bank then disbursed to the creditors by the company. Everything is spelled out in writing that the company will only debit the account for the payment of bills.

The fee is 1-2% of total projected savings... that could easily be $5000 or more as the "savings" will include the interest saved by paying off the mortgage as well as credit card interest saved. Sales commission is 20% of the total fee.

He says the hardest part is that people assume it's credit repair or debt renegotiation. However, it's really something that works for the average person with average debt and good credit.

Rob Channell · 05-19-2005, 05:54 PM

I would not want someone else making those decisions for me. If my child gets sick and I'm short on cash the Visa would go unpaid.

Paying off debt is not about the math. It is about the emotion. I like Dave Ramsey's approach to paying it all off. Put all the debts in order from largest to smallest and pay the minimum on everything except the smallest one. Attack the smallest one with a vengeance. It's easier to keep at it when you can see progress.

Check out Dave's site if you like. www.daveramsey.com

Just a satisfied customer,