THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Friday, October 14, 1994 TAG: 9410120202
SECTION: VIRGINIA BEACH BEACON PAGE: 3B EDITION: FINAL
SOURCE: BY DAWSON MILLS, CORRESPONDENT
LENGTH: Long : 108 lines
It may or may not be true that the love of money is the root of all evil, but it's no secret that money - and credit - can be the source of many problems.
It doesn't have to be that way, says Deborah Ruck, manager of the third and newest Virginia Beach office of Consumer Credit Counseling Service of Virginia. There is hope, she says, even for the most debt-plagued consumers.
The counseling service, a non-profit organization based in Richmond, has offices throughout the state, a few in North Carolina, and even a counseling-by-mail service. Although relatively unknown, the service can be just what the doctor ordered for those whose financial health is shaky.
Funded entirely by creditors, such as banks, retailers, collection agencies, and health-care providers, the service is free to those who need it. And it's confidential.
``We work with clients one on one,'' Ruck explained. ``Our focus is budget counseling and debt management. We set up trust accounts for clients to pay into and then work with their creditors, making the payments from those accounts.''
The payments are frequently less than what the creditors are demanding as they know half a loaf is better than none. And clients end up paying their debts in full.
``We have a little more leverage,'' Ruck said. ``Creditors feel more secure dealing with us. In fact, often collection calls (made by creditors) turn into referrals to us.''
The office, which Ruck opened with her staff of two in mid-July, is tucked away on the third floor of the Hilltop West Executive Center. While some may appreciate the anonymity the location offers, it makes it difficult to know they're here. There's no exterior sign. Only a directory listing in the lobby and a small sign outside the suite reveal their presence.
The Hilltop office, however, has had 161 scheduled appointments since it opened.
Through August of this year, Ruck said, the service has disbursed more than $21 million statewide from hard-pressed debtors to their creditors. In 1993, more than $28 million changed hands to satisfy difficult debts.
The need for such services is not restricted to the poor, the unemployed or the down-and-out.
``I've seen clients come in with debts ranging from $1,000 to $72,000,'' recalled Ruck, ``with all ranges of income.''
Some profiles do emerge, however. The average age of those seeking help is 35. Females make up 54 percent of the clientele. Just under half are married. The average gross income is $2,006 per month; average debt load is $19,780.
The counseling service lists 14 different types of debt (such as retail, medical/hospital, student/government loans) that cause clients to seek them out, but bank credit cards lead the rest by a wide margin. Almost 38 percent of all money disbursed by the service goes to satisfy credit-card problems.
So what alternatives does one who is drowning in a sea of debt have? Not many. One can try to work it out independently with creditors, but such bargaining is not from a position of strength. Or there's the so-called ``easy'' way out: personal bankruptcy. That's a bad mistake, said Ruck, who notes that a bankruptcy stays on your credit report for a long time and can make it impossible to obtain credit in the future.
The third option is enlisting the counseling service's help.
Agatha Parks and her husband turned to the counseling service when they found themselves overwhelmed by credit-card debt. Now she can't contain her enthusiasm for the service.
``I was trying to work and go to school,'' Parks explained. ``My husband and I had already said `let's just file bankruptcy,' when a friend at work told me about them, and told me the service was free.
``The counselors were fantastic. I was initially embarrassed - how can this happen to me? - but they didn't belittle us. They helped us see that we could really do it, could really get out of debt.
``My husband was a builder, about to make a career change. This was in October 1991, during the recession. We owed $26,000. All we needed was a break, two years to dig our way out. With help from CCCS, we got it and by July 1994 had paid off every penny. And we've bought another house, something we'd never have been able to do if we'd declared bankruptcy.''
Ruck said there are many more stories like that. Now that military and civil service paychecks can be garnished, they're seeing a lot more military and government employees. And, Ruck added, ``a couple months after the holidays, when the bills start arriving, it picks up.''
Her work, however, is not seasonal.
``If one month is slow, the next makes up for it,'' she said.
Ruck also noted that for people in the program the holidays can be tough, as they have had to cut up their credit cards. Many, like Parks, end up vowing never to get another one again, even though the program protects their credit record and ``pre-approved'' applications arrive in the mail.
``I send them back in the postage-paid envelopes marked `no thank you,' '' Parks said with a laugh. ILLUSTRATION: Photo by DAWSON MILLS
Deborah Ruck, seated, manager of the Consumer Credit Counseling
Service at Hilltop; receptionist Patricia L. Cataldo, left, and
counselor Cynthia Rooney, keep a fishbowl that's filled with credit
cards cut up by clients.
HOW TO GET HELP
Consumer Credit Counseling Service of Virginia's newest office is
at 1604 Hilltop West Executive Center, Suite 304 (phone 425-3328).
Other offices in Virginia Beach are at 6477 College Park Square,
The Atrium, Suite 100 (phone 424-2060); and Giant Square Shopping
Center, 717 Independence Blvd., Suite 215 (phone 473-2227). Other
offices are located in Chesapeake and Portsmouth. A call to any
office will be referred to the office nearest you.
by CNB