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Common-sense counsel about getting out of debt

By HELEN HUNTLEY, Times Staff Writer

© St. Petersburg Times
published January 12, 2003

When debt problems pile up, many people turn to a credit counseling service for help. One of the counselors who responds with information, advice and a sympathetic ear is Barbara Eisenfeld, 60, of Tampa. She works for the Consumer Credit Counseling Service of the Florida Gulf Coast, which serves Hillsborough, Hernando, Manatee, Sarasota and Lee counties.

Here is what she had to say about her job in an interview with the St. Petersburg Times:

Q. How long have you been counseling people about their debt problems?

Seven years.

* * *

Q. How did you get into this field?

I lost my job at Barnett Bank. They moved the real estate closing department over to Jacksonville, and I didn't want to go. I was a real estate paralegal, and we do a lot of housing counseling, which is why I was hired. I also have a bachelor's degree in psychology. I thought I'd take this until something better came along. I found out I really like it. I've had several offers since then that I've turned down.

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Q. What's a typical debt load for someone who comes to you for counseling?

There's not really a typical client. I get people who only owe these horrible cash advance places, and I get people who are $150,000 in debt. The really sad ones are the little old ladies who are waitresses, who are getting $500 a month and are $25,000 in debt. There's no way they can pay that.

* * *

Q. What's the worst case of debt you've seen?

A gentleman who turned his credit cards over to an attorney who proceeded to buy a grand piano and other things. He owed $165,000, and he couldn't file for bankruptcy because it would have looked like he and the lawyer were in collusion. The poor guy couldn't get credit.

* * *

Q. Do you have a favorite case?

My favorite was a guy who lived in south Tampa. He was retired and his wife was ill, and they had run up about $30,000 in debt. He wanted to pay it off, and he wanted to do it fast. I'd see him when I was going to work, pedaling along on his bicycle, collecting aluminum cans to get money. He paid off every penny. He said "I did it and I'll pay for it."

* * *

Q. What is the biggest reason people get into trouble with debt?

They don't pay attention. They get a credit card for $5,000. They get more offers. The next thing they know they are deep in debt. If you have to reach in your pocketbook and pull out $30 for dinner, you might go to McDonald's instead. But if you can put it on your credit card, you go ahead. It just escalates. It's called creeping indebtedness.

* * *

Q. What prompts people to finally come to you for help?

Something happens like their insurance goes up or they get turned down for new credit. It's sort of a wakeup call the first time you get turned down for credit.

* * *

Q. Describe your job.

I talk to people about their finances. Sometimes we can help them with debt management. We have a lot of different places we can refer people who have problems. We give them places to go for cheap child care. We get senior citizens who can't afford medications, and we send them to a program with the Salvation Army that can help them. There's a huge list of places we can send people.

I also monitor the HUD grant that we get. We help people with delinquent mortgages, people about to be evicted due to rental problems, even homeless people if we can get them into a shelter.

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Q. How do you help people pay off their debts?

They pay us, and we disburse it to creditors the same month. We set it up so it's something they can do. We say, "How much do you make? What are your basic living expenses? What do you have left over to pay? Can you reduce expenses or get a part-time job?" It needs to be an amount that they can pay and that will pay the credit cards down. Some creditors work with us and will reduce their interest to zero, but some won't do a thing.

We do budgeting classes, which are free, to help them plan out a budget. There's no point in putting them on a program if when they finish the program they're going to get back into trouble. I had one lady who said she had to do $800 worth of dry cleaning every month. I said, "If you continue doing that, it doesn't look like you're going to have enough money to stay in that house." It's a real wakeup call when people come from well-to-do families and then they have to economize. It's hard for them because they've never had to do it.

The other thing I really stress with my clients is a savings account. You just know you're going to get a flat tire or something. If you can take it from your savings account rather than charge it up again, that will get you through most minor emergencies without having to borrow. Once you start to borrow, it escalates again.

* * *

Q. How much does the debt-management program cost?

We charge $30 for counseling and then $30 a month as a suggested donation so that we can stay in business. A lot of the classes and the good information we provide are free.

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Q. Does going through debt management hurt people's credit ratings?

Sometimes it does. Sometimes it doesn't. We have lots of people who have bought cars and houses while they were in our program.

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Q. Are there some people you can't help with a debt repayment program?

Yes. When we see people with kids who are just barely making it and don't have enough money for food, we don't charge them, but there's not a whole lot that we can do. If you see their income is not sufficient to support them and pay their credit card debt, their only option is to file bankruptcy because those debt collectors will hound them to death. Sometimes I do recommend bankruptcy. It's not the best way, but sometimes it's the only feasible way to ever get on with their lives.

* * *

Q. Do you deal with debt collectors?

Yes. Debt collectors are horrible. When I call on behalf of my clients, I've been cursed at, I've been yelled at. I generally call right back and tell their managers what's going on, and they always deny it. It's your word against theirs. They tell people, "We're coming to your job to arrest you if we don't get a check today." I say, "Laugh at them," but people are convinced that they're going to be arrested, even though it's a civil matter, not a criminal matter. I had one lady with a common last name. They called her unmercifully at work and at home. I called back and said, "Which creditor you are representing?" It turned out it wasn't even this woman's debt. They never apologized.

* * *

Q. What are the biggest mistakes people make when trying to deal with debt?

One is playing the "change game." They'll keep transferring and transferring (balances) from one card to another. Pretty soon they've let all of them run up to the max. If you do the change game, be sure to close out the old card. Most use the old card again, and they're in worse shape than they were before. Another bad thing they do is take out second mortgages to pay off their credit cards, then run (card balances) up again. Now you're putting your house on the line. But the worst thing they can ever do is take a payday advance. It's a very temporary Band-Aid that causes more problems. I've rarely seen a case where it helps.

* * *

Q. What's the best thing about your job?

Getting to help people. I like that. I keep in touch with a lot of my clients. They come back if they have problems. One couple just sent me a picture of their baby.

* * *

Q. Do you take your clients' problems home with you at night?

Not usually. But there are days, like when I have the little old lady who doesn't have enough money for food and (debt collectors) are calling her and driving her crazy and there isn't anything I can do.

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Q. Have your clients' problems had any impact on the way you manage your own money?

Yes. I am definitely trying to keep my finances straight. I don't ever want to be a bag lady. I try not to use credit cards. I have some debt from helping my grown kids out, but I'm paying it off.

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-- Information about a consumer credit counseling agency near you is available from the National Foundation for Credit Counseling at or by calling toll-free 1-800-388-2227.

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