How To Start Your Own Credit And Debt Counseling Service

Here's a business idea that meets all the aspirations of theAmerican Dream.
You can start small with a little or no investment, develop it inyour spare time, and parlay it into a $100,000 a year income--allwithin the next twelve months or so.
Really, all it takes to move one is an empathy for people, abasic understanding of money management, and about 500 businesscards, some smart advertising, and you're in business. Yourgreatest expense or investment, of course, will be youradvertising.
The first, and most important thing to learn is the "thoughtprocesses" in the minds of the people or firms that lend money.No one lends money with the thought of foreclosing on the loanand taking away a borrower's collateral. Whenever the lender isforced into such a situation, everybody loses. The borrower loseshis possessions, and the lender ends up with about one tenth ofthe money he originally loaned out.
Therefore, the lending institution will generally do everythingpossible to work with the borrower as long as he continues toshow good faith in attempting to repay the amount of the loan.The most important thing a borrower should do, once he findshimself in a financial bind, is get in touch with his creditorsand apprise them of his situation. Usually, the lender will setup a meeting for an open discussion between himself and theborrower, in order to adjust or work out a more convenientrepayment schedule.
Most people who borrow money are having money management problemsto begin with, and are actually terrified to death at the thoughtof people from the loan company calling them. Although theygenerally won't admit it, most are aware that they're havingproblems managing their money. They're embarrassed about it, andinstead of openly seeking help, they attempt to cover up theproblem, and then hide from or avoid the very people who want tohelp them.
Over the past three years, personal and small businessbankruptcies have been soaring to record levels. At the bottomline, very few people want to file bankruptcy against theircreditors, because regardless how easy it is, the thought ofhaving "gone bankrupt" still leaves a stigma.
And this is where you step in with your Professional Credit DebtCounseling Service. YOU SHOULD NEVER HAVE ANY TROUBLE FINDINGCLIENTS.
Remember, step one is always to notify the client's creditors.This is the first instruction (or job) that you give to theclient after you've heard his story. The borrower should be theone to notify the creditors, and ideally, he should call each onthe phone, set up a meeting and then discuss with the lender hiscurrent financial situation as well as his plans to rectify theproblems, and resume payments. The plan he'll discuss with thelender will be the plan you assist him in setting up.
If the borrower is over his head and with no other alternative,you should immediately advise him to file for relief under " TheWage Earner's Plan," as explained in Chapter 13 of FederalBankruptcy Act. In essence, this "plan" gives the debtor time toregroup and reorganize his financial situation without hounded bybill collectors.
Anyone who's capable wages, salaries or commissions, can make useof this plan. It should in no way be thought of as bankruptcy.This is simply a court supervised method for a borrower to payoff his debts. The borrower simply draws up a plan, the lendersare almost over a three-year period. If the court accepts theplan, the lenders are almost obligated to accept it. while morerecent bankruptcy laws still leave room for abuse by dishonest"big business," they fortunately have improved the outlook forthe "little guy."
Your job as a Creditor and Debt Counselor is to meet with theover extended borrower, listen to his problems, and help him toplan a budget to live by, and set up a plan for the propermanagement of his income that will include money for him to liveon, plus regular payments to his creditors. In the beginning, youcan meet in the borrower's home, pretty much the same way aninsurance agent does. later on, you'll probably want your ownoffice, but a formal office for your business will never beabsolutely necessary.
Many people are reluctant to be seen walking into a CreditCounselor's office. Again, there's a personal embarrassment---thethought of their friends seeing them, and the worry of what otherpeople will think of them. So if you do opt for an office, makeit as unobtrusive and as confidential as possible. A sign stating"Money Management Consultant" would be appropriate. Gaining theconfidence and trust of your clients will be the secrets of yoursuccess. And do not underestimate the power of "word-of-mouth"recommendations by grateful clients.
Follow the methods of the insurance salesman, making everythingas comfortable as possible for your clients. So long as youlisten to your client's problems, and then work with him to plana budget he can live with while paying off his bills, you won'tbe required to have a license in most states. You simply listen,assist the borrower in planning a budget, and he administers ithimself. He makes all the contacts with his creditors, and makesall the payments directly to them. To give you the money and haveyou disburse it among his creditors would require a license foryour business.
Step two in your service is to find out the total amount of cashyour client has coming in each month, and on what debts.Calculate according to his current obligations, how much he needsfor living expenses: Rent or mortgage payments, utilities, foodand clothing. The remainder of his available income is thenbudgeted for division among his creditors.
One of the best (and easiest) methods of money management withina budget is via envelopes. The wage earner marks a differentenvelope for each of his obligations. He then makes apre-determined amount of deposit in each of these envelopes eachpayday.
Thus, if his mortgage were $500 per month, and be brought home$750 each pay day, you'd probably advise that he "deposit" $250each payday into the mortgage envelope. And so it would be witheach envelope.
Many people find this kind of system scary in the beginning, butafter they're used it for a month, they swear by it as the onlyway to keep bills up to date.
Of course, the most important thing you want to advise yourclients to do is to destroy their credit cards. Best of all, havethem cut them in half, and send them back with a short noteexplaining what they are doing and why--getting a handle on theirdebts according to their actual income. Basically, that's allthere is to your counseling service.
You'll need a first meeting to hear the problems, and to makeyour proposals. A second meeting will be in order to polish andendorse the planning. Perhaps a third meeting at the end of thefirst month to assist them in making their payments from theirobligation envelopes. Finally, you'll want to keep in touch withthem and ask how they are doing from time to time. You'll findthat most of the people you serve today will need your servicesagain at some time within the next five years--sad, butstatistically true.
It's a "fast track" and ever changing world. People who are poormoney managers today will invariably encounter money problems,again and again, regardless of how often they get everything paidoff. This is, unfortunately, what keeps the lending institutionsin business, and presents the opportunity for you to becomewealthy as a Professional Credit and Debt Counselor.
You'll need a receipt book. Drop by any large stationary storeand get the most impressive one available. You should charge$100, more or less, for services, Three counseling sessions, withthe payments at 410 per month spread over ten months is an idealarrangement. Explain your fee during your first contact---$100 inpayments of $10 per month over 10 months. You'll find the soundof a $100 fee affords an intangible degree of respect for yourservices, while the explanation of modest $10 monthly paymentscloses the sale for you.
Always carry an attache case, and at each meeting, work at thekitchen or dining room table. if it's a husband and wife, be surethat each is seated beside you. If it's just one person, have himor her to your right if you're righthanded; to your left ifyou're lefthanded. Never have a client opposite you, across thetable. Round tables are best for empathy, agreement andcooperation; this has been proven psychologically---just believeit, and be guided accordingly.
Always carry a yellow legal pad, and have plenty of pencils witherasers available. The legal pad lends authority to yourknowledge, while leaving plenty of room for alternatives. Thepencils and erasers eliminate the symbolic fear of everythingbeing "cast in stone," and conveys the feeling of negotiation.
You should be well dressed, a portrayal of the traditional"financing officer," and yet warm colors to accentuate yourempathy with the problems of your clients. By all means, youshould be sparkling clean and well-groomed. Do not smoke duringyour meeting with your client, and always diplomatically refuseany alcoholic drinks that be offered. Try to "talk" with yourclients. You must never show any signs of disapproval of theactions that resulted in your clients being in their presentpredicament, nor should you sound as if you're lecturing orspeaking to children. Remember--and you can tell yourclient--this has happened to many stable, conscientious people.
Maintain an attitude of understanding and sincere desire to helpthem out of their current "tight spot." Don't let them get goingon a deprecatory tangent, either. Should they start down thepath, simply tell them, "These things happen to everyone, andwhat's done is done; the important thing now is working out thesolution to the problem."
As mentioned earlier, your only real investment to set yourselfup in this business will be your advertising. Even that does nothave to be a "saved up" cash outlay. You can start off byplanning to run a two-column wide by three inch deepadvertisement in your most read area newspaper. Check with thenewspaper office to get the best price on a bulk space contract.
Under this kind of agreement, you sign to pay for a certainminimum number of column inches for the next year, and as aresult, your rates are considerably lower than those paid by theinfrequent advertiser. Best of all, the newspaper will bill youafter the ad has run, and allow you 30 days from the date of yourbilling.
You should plan to run an ad in the newspaper for at least threedays a week, especially in the Sunday editions, every week. Youmight also want to run the same ad in several of your weeklyShoppers Newspapers. Definitely have a flyer made up describingyour services. About once a month, hire 7th or 8th grade schoolgirls to hand these out for you in the busy shopping centers.Another good place to hand them out is at the entrance to yourstate's employment service offices.
Small 3 by 5 cards announcement cards or descriptive businesscardson all the bulletin boards in the area will also pull inbusiness. Finally---and most importantly---just as soon as youcan afford it, an advertisement and listing in the yellow pagesof your telephone directory should be bought. Telephonedirectories come out on a regular ( usually annually) schedule,so check ahead, and anticipate cost and date you may expectresults.
A good place to check for help in writing your advertising isyour area colleges. The students will generally help in exchangefor the opportunity to build a portfolio. There's never a need topay the "out-of-sight" high prices demanded for professionalcopywriting and advertising design by some agencies, even if youhave the money. All finished ads are unproven, and you have noguarantee that one is better than another until you begin testingor using it.
The important element is that your ad says what you want it tosay--that it looks good and makes you feel that it will appeal toyour potential customers--that it instills confidence within youthat it will bring in the customers. Use the "AIDA" formula:ATTENTION, INTEREST, DESIRE, ACTION!
An attention grabbing headline (or first line)--- a line orparagraph that definitely appeals to or arouses the self-interestof your potential customer; "a hooker," or image buildingdescription that causes the prospect to picture how much betterhis life will be as a result of availing himself of yourservices; a line that relieves the prospect's fears of making thewrong decision (such as "Satisfaction Guaranteed") and a demandthat he take immediate action such as "Call NOW!" DON NOT APPROVEAND DO NOT RUN ANY AD that does not contain all theseingredients.
Here's an example of an ad that should work very well for you:
ARE BILL COLLECTORS HOUNDING YOU?Now there's a way to stop those dunning letters and embarrassingphone calls. Get out of debt com- pletely---without bankruptcy!Preserve your good credit rating; maintain your presentlifestyle;worry no more about bill collectors! Just an hour or so of yourtime, and your money problems canbe solved! Your satisfaction is guaranteed! Phone 123-4567 rightnow for an appointment.
National Credit Counselors 123 Tenth St City, State.
A classified ad might read:
Solve all your money problems with this easy and completelylegal solution. 100% guaranteed anywhere in the U.S. CallConsumer Credit Solutions at 123-4567.
At the same time your newspaper ads begin to appear, be sure toget a press release about your business to the business editorsand consumer advocates at all the newspaper, radio and televisionstations in your area. Of help to you in this area will be ourreport #3504, The Inside Secrets of Getting Free Publicity ForYour Business.
It's generally not worthwhile to advertise this particular kindof business on radio and TV, unless you do os on a "per inquiry"basis. For more details on this approach, see report #3406, HowTo Get Free Radio Advertising For Your Company.
After any free radio and Tv talk shows, and newspaper featurestories about your business, the next best method of spreadingthe word about your business will be via the guest speaker routeat civic club meetings. And don't forget the women's clubs. Yourtalk to these groups should be "scripted," simply explaining thealarming number of bankruptcies, the great losses suffered bybusiness because of bankruptcies; the exasperatingly poor recordof the American people with money management responsibilities; anurging for support to get "back to the Basics" and teachpractical money management courses in the schools, and by examplein the home. Such talk should bring you a big round of applauseand continuing source of referrals.
To carry this effort just a little further, set up Credit andDebt Counseling Seminars or Workshops. You can arrange to holdthem in the banquet rooms of well-known restaurants in your area,meeting rooms at your local community college, fraternal clubmeeting halls, motels, or even churches. Generally, it's best tocharge a small fee-- say 45 per couple---because of the suspicionthat you're setting up to sell something when you don't charge anattendance fee. Most people are aware of the bottom line--thatyou are trying to sell them something when you invite them to aseminar or workshop. However, most feel that when you invite themto a seminar or workshop. However, most feel when there is acover charge, the basic information you'll be giving will be moreuseful that given when there's no charge to attend. And if theyhave paid some kind of fee, they will be more at ease inlistening and evaluating, without the pressure when they havecome"for free."
Seminars are one of the most lucrative (and fastest) ways ofgetting a new business off to a running start. When you stageseminars, it's imperative that you flood the area withadvertising, being sure to promote the seminar, not the productthat you're really selling.
Your seminar script should be basically the same that I'veoutlined for you as a guest speaker, the difference being thatinstead of closing with a call for more education in moneymanagement, you briefly outline the simplicity of the "envelopedeposit" system. You then close with an open invitation for thosewith particular problems or needing special help to call youroffice and set up an appointment for personalized counselingservice.
Even better you officially open for business, you'll want to havea tentative list of people you can possibly train as employees tohandle the workload as your business grows. Rather than pay thesepeople a salary, simply give them a commission for each clientthey handle. In other words, you can sign a client for $100 over10 months, sell the account to a factoring company for 80% of thetotal, collect $80 in cash immediately, pay your commissioncounselor $30, and bank $50 in profit with no real work involvedon your part. And if you have hired a good counselor, you canrest assured that your client has been well served.
Basically, that's how easy it is to put this kind of businesstogether and make it start paying off immediately. Remember, youmust be constantly soliciting new customers, and building thenumber of customers you or your counselors talk to each day. Youshould strive for an average of three counseling sessions perday, five days per week, before seriously considering additionalhelp.
At $10 per month from each account, this will give you $150 perweek or a total account billing of $1,500 per week. By factoringyour accounts at 20% for their total value, you'll have animmediate cash income of $1,200 for the week. The factoring company will handle all the billing and bookkeeping, eliminating your need for those services.
The way to success in this business is, however, to keep thishappening EVERY week. It will depend upon your advertising, theservice you give, and the reputation you build.
The prime requisite will be work and perseverance on your part,but once you're established, with a few commission counselorsworking for you, the business can easily gross $150,000 per yearin even small to medium-size cities. You now have the knowledge;the rest---the action part---is up to you. Best of luck!