Podcast Episode - Ask Suze Anything

Credit Cards, Debt, Divorce, FICO, Financial Advisor, Marriage

December 12, 2019

Listen to Podcast Episode:

In this podcast of Ask Suze Anything, we’ll hear from Women and Money listeners Terry, Lauren, and Anonymous.

Podcast Transcript:

On today's Ask Suze Anything, I want to do something just again, a little bit different. So many of you write in, and you ask the question about how do you find a good financial advisor? How many should you interview? What do you need to know about it? How do you check them out? Everything like that. So recently, I just got an email from Terry who wants to share something with all of you to help protect you. So I'm going to read her email.She says, I listen to your podcasts regularly and thought I would share this recent experience in hopes it will help or save someone else. I have interviewed two financial advisors, one I particularly liked. I should have done a better check before I sat with each of them. When I arrived at the first person's office, I found he had rented office space for the meeting which you had mentioned in one of your podcasts this was a no-no. I understand people work out of their homes these days, but I think I need a team of people with different skill sets. The second individual, who I liked and was referred to by a friend, was an "investment specialist." This meeting went well and I had a good feeling about him. Following the meetings, I did some additional research and found this site Brokercheck.FINRA.org. The first person was not a registered broker, as he claimed to be. The second person, who I liked, had a bankruptcy in the last five years. Also, none of the team in his office were certified financial planners. My thought is he may not be the person I want handling my money, but maybe I am being too hard. Life happens, and in some cases, bankruptcy may be the best option. I assume the BrokerCheck site is legitimate, right? Yes, Terry, it's legitimate. Are there other sites I should be checking? Just thought I'd share this, Suze. My search for the right person continues, but I will do the background search beforehand. I love the learning you provide to all of us.The reason that I wanted to share this with you is that it is really, really important that if you are going to give your money to somebody that you know everything possible about that person. Now while it is true that over the last five years maybe he fell on hard times, whatever, but I'm not sure bankruptcy. I don't know. I know you liked this person but did they have everything that you needed them to have? And what is that? That is, do they have a brokerage firm? Not just one office, but do they have an entire brokerage firm that has other offices throughout the entire nation that backs them up? You do not want to deal with a one-person office. Do you hear me? So again, I just wanted to read this to you because you have to be careful out there. Even though somebody recommends somebody to you, it doesn't mean that the person who's recommending them to you knows anything about them. So I'm just asking you to all be careful.Next. A lot of you write in and you ask me, Suze, I have so much credit card debt I don't know what to do. I'm behind. Should I go see somebody? What should I do? Should I take out a home equity line of credit? And you hear me, time and time again, refer you to an organization by the name of NFCC. And I tell you to go to them and its NFCC.org is their national website, which is a nonprofit, and they are a debt management program. And you go to them and they'll refer you out to somebody most likely in your area. What I don't want you to get involved with is a debt settlement company. A debt settlement company is a company that helps you settle your debt and the way they help you settle your debt is this. You pay them usually $500 or $700 or some fee upfront. They then tell you to stop paying all of your credit cards so they ruin your FICO or your credit score. You then pay them every single month the amount of money that you would have been paying to your credit card so they have a sum of money of yours. Once your credit scores are sufficiently ruined, then they call your creditors on your behalf and they make a settlement with the amount of money that you have paid them over the years or months or however long that you've been doing this. Usually, the credit card company says OK, your client owes me $2000, we'll settle for $250 or $1000 or whatever it is.The problem is, yep, you've gotten out of debt, but you have ruined your credit score. You don't need a debt settlement company to do that for you. You can do that all on your own. You don't have to pay a debt settlement company $500, $700, $800 upfront, and then a percentage of the amount of money they settled for. You could do that all on your own.But Lauren writes in and she says, Suze, I wanted to share my experience with the NFCC and a word of warning to your listeners if they haven't heard your sage advice about debt management versus debt settlement. I didn't qualify for the NFCC because of my decent FICO score and income. So instead, I was connected to a debt settlement partner. When I went to them, they made it sound like a dream. I would only have to pay them a small amount monthly, then they would erase my debt in five years. Once I started talking to the debt settlement person who sounded like a used car salesman, putting the pressure on to sign up, he didn't mention anything about the process behind the scenes or the consequences. I paid the settlement company, they stopped paying my credit cards entirely, my FICO score goes in the toilet, and then the settlement company negotiates a small amount of money to throw with the credit card companies to get them off my back. Thankfully, I remembered your advice and asked them outright about the process, and they confirmed that is what happens. I wanted to make sure that listeners are aware of the difference between debt management and debt settlement and their consequences. I am sure that the management program is fabulous and the settlement may be a last-ditch effort for someone if they are overwhelmed and don't care about their FICO score. But I think that it's important to know what you're getting into, especially if the debt settlement companies are not forthright about the consequences.Now, the reason that I am reading this to you is that it turns out that the NFCC, whoever she went to see there, they actually, whoever that person was, they referred her to a debt settlement partner. So you have to be careful because you have to remember that when you go to the NFCC and then they refer you to someone, each one of those are individual companies. Some, may be good, some may be crooked and not so good, obviously like the one that Lauren got. So, you have to be careful. Just because I'm telling you to go somewhere doesn't mean when you go there and they send you somewhere else, and then those people send you somewhere else it's where you need to be. Because everybody seems to be wanting to make money off of you. So, you can go to the NFCC.org and check them out, but you need to remember the only kind of company that you want to deal with is a debt management program, not a debt settlement. And if somebody from the NFCC or who has been referred by the NFCC refers you to a debt settlement program, just get up and walk away.The last share that I want to do today isn't about a warning, it isn't about something you need to be careful of when it comes really to your money, like debt settlement and financial advisors. This is a share from someone who wants to remain anonymous, and she just wants to share it. Or maybe she doesn't even want to share it with everybody, maybe she just wanted me to know. But I want to share it with everyone because sometimes when you hear these stories, you relate to them, and then your life really starts to turn around for the better.She says, dear Suze, I'm a hairstylist and my husband and I have been married for 23 years. We married when my two girls were eight and nine years old and my baby was one year old, with her father. When we first married, I was a new stylus and brought home a lot of cash because I was a booth renter and was paid on a daily basis. My husband started saying things like, why are you showing off? And if I was counting when he walked in the house, he would look at me and just walk by without speaking. Now I knew this was bothering him, so I would count the money in my car and then deposit it. But it got so bad and made me feel so bad that I just cut my hours and said to myself, I don't need this much money, I'm married now. This mentally went on with me for years, I was married and he wanted to be the provider. Now he has progressed in his career and I've supported him, but I feel my husband wanted me to fail, and I noticed it for years, and so did my kids. And they would say things like Mama, do something you want to do. Fix what you want to eat for dinner. But I've been so conditioned to do what my husband wants, that I didn't know what I wanted, and if I voiced it, it would be changed in a way that I didn't even know it was changed. Now I've decided to divorce. While I was being the wife, he had girlfriends and boyfriends and has been living with HIV. He had extra money accounts that I found out about, and I am just done. I'm not even mad anymore, I'm just finished. I don't have any money, everything is in his name: the house, the cars, the credit, everything. But I just don't care. I have to start all over. Thank you for your podcast, love you for caring. AnonymousAnonymous, I shared that because of this. So many women and the men, by the way, smart enough to listen, write in and they've just had it. They've just had it. They've been abused, they've been lied to, they've been cheated on, they've been… All these things have happened to them and their solution is all right, they're going to get a divorce. I don't have a problem with that. However, the other solution is they are just so happy to be free that they simply just leave, they start all over again, they do not get what is rightfully theirs. You have been married to this man for 23 years. That means a lot. That means you are entitled to any money or at least half of what he may have in his retirement accounts, what he may have in his savings accounts, checking accounts. You are even entitled to half of his social security if half of his social security is more than 100% of yours. So you have entitlements here, so I don't care that you're just so happy to be free. I'm so glad that you are, and yep you have to start over. But at least when you leave and when you start over, you should start out with what is rightfully yours. Because you can trust me on this one. Three years from now, five years from now, when you're going to be totally fine, no matter what, you are going to be so angry at yourself that you didn't get what you deserved, financially speaking. You paid the price here for everything that you did throughout the years. You belittle yourself, you stopped making as much money as you should have been making simply to please him. Now that was not the most intelligent thing you ever could have done, but you did it. You did it, you stopped making money that was rightfully yours years ago and now that same behavior is starting to come back where you're just willing to stop to get what you deserve so that you can go on. But that's not what I want you to do.If it were me advising, and it kind of is right now on this podcast. I would most likely get a lawyer, and I would go after him for everything that was rightfully and legally yours. I'm not asking you to take more than what is rightfully yours, but I am asking you to value who you are. To stand in your truth, to get what you are legally owed. Do you hear me, Anonymous?So those were three shares on the Ask Suze Anything today that I felt were really, really important. Because all of you work so hard for your money. You write to me and you ask me questions about your money. Maybe you listen to my answers, maybe you don't. A lot of people say to me, Suze, just talk to me about money. Stop talking about relationships, stop talking about abuse, just tell me should I do this? Should I do that? What good is it going to do you if I simply tell you what to do with your money, and now you go to do that with your money and you do what? You get a crooked financial advisor and you've been putting all this money in with that person and now when you need it most, guess what? It's gone.Or, I tell you how to get out of debt and I make a referral to you and they somehow end up making a bogus referral to you, and you end up with getting out of credit card debt but maybe it's ruined your FICO score. So now you can't get a loan, your car insurance, everything starts to go up, all your bills go up. Are you kidding?Or, you're in a relationship and you're hearing me. And now you feel strong because I've been talking about what it takes to be strong and you're identifying with it. And now you leave, but you leave everything that you are rightfully owed on the table. What good would it do you if you didn't listen to all of it, to all of it? All of it that can go right and all of it that can go wrong. The goal of the Women and Money podcast is so that every single one of you become smart, strong and secure when it comes to your money. And that means that not only do you have to know about your money, but you have to know about who you are. In providing answers, Suze Orman is not acting as a certified financial planner, advisor, a certified financial analyst, an economist, CPA, accountant or lawyer. Suze Orman does not make any recommendations as to any specific securities or investments. All content is for informational and general purposes only and does not constitute financial accounting or legal advice. You should consult your own tax, legal and financial advisors regarding your particular situation. Suze Orman does not accept any responsibility for any loss which may arise from accessing or reliance on the information in this podcast, and to the fullest extent permitted by law, we exclude all liability for loss or damages, direct or indirect, arising from the use of the information. To find the right Credit Union for you, visit https://www.mycreditunion.gov/. Interested in Suze's Must Have Documents? Go to https://shop.suzeorman.com/checkout/cart/index/.

Suze Orman Blog and Podcast Episodes

Suze's Financial Strength Test

Answer Yes or No to the follow statements.

I pay all my credit card bills in full each month.

I have an eight-month emergency savings fund separate from my checking or other bank accounts.

The car I am driving was paid for with cash, or a loan that was no more than three years, and I sure didn’t lease!

I am contributing at least 10% of my gross salary to a retirement plan at work, or I am saving at least that much in an IRA and/or regular taxable account.

I have a long-term asset allocation plan for my retirement investments, and once a year I check to see if I need to do any rebalancing to stay on target with my allocation goals.

I have term life insurance to provide protection to those who are dependent on my income.

I have a will, a trust, an advance directive (living will), and have appointed someone to be my health care proxy.

I have checked all the beneficiaries of every investment account and insurance policy within the past year.

So how did you do?

If you answered yes to every item, congratulations. If you are working on improving on a few items, I say congratulations as well.

As long as you are comitted to truly creating financial security, I applaud you. If that means you are paying down your credit card balances, or are building up your emergency fun with automated payments, that’s more than fine. You are on your way!

But if you found yourself saying No to any of those questions, and you’re not working on moving to Yes, then I want you to stand in your truth. No matter how good you feel, you have some work to do before you can honestly know what you are on solid financial ground.

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