1. Economic Crisis Workshops Financial 911

2. Agenda

Our Current Financial Situation

Major Concerns for Americans today

Non-financial side of finances

Managing debt & Prioritizing payments

Understanding the collection industry

Dealing with creditors

Understanding Foreclosure

Bankruptcy

3. Our Current Financial Situation

Real Estate Crisis

Mortgage Crisis

Foreclosures in Florida = 1 out of every 213 properties.

Unemployment at 8.1%

• This is the highest level in 25 years

• Over 4.4 Million Jobs have been lost

• Employees are worried about job security.

Many small businesses are now out of business or are on the verge.

4. Major Concerns for Americans

The Economy

Stock Market

Mortgage Crisis

Home is worth less than what is owed

Loss of job or unable to find a job.

5. Non-financial side of finances

Save the marriage

Understanding each other his/her reactions to financial stress

Stress management

• Keep healthy exercise, eat healthy

• Communication

How to communicate financial situation with kids

• Reinstituting NO

6. Debt

Scripture does not say debt is a sin, but it discourages it.

Debt is considered slavery

• Proverbs 22:7Just as the rich rule the poor, so the borrower is servant to the lender.

Repayment is required

• Romans 13:8Owe nothing to anyoneexcept for your obligation to love one another. If you love your neighbor, you will fulfill the requirements of Gods law

• Psalm 37:21The wicked borrow and never repay, but the godly are generous givers

7. Credit Card Industry

First credit card born in 1950

1970 only 15% of people had plastic

Now college students are bombarded with offers with the average leaving school with over $5,000 in credit card debt

Industry takes in $43 billion per year in additional, unexpected fees from the consumer

Average household cc debt has increased 167% in 17 years

45% of American cardholders make only the minimum payments

American households spend over $412 billion in credit card charges every year

8. How do I deal with all the stress and achieve Financial Freedom?

It is a process

It takes dedication & discipline

I recommend you use the Crown Money Map system

Today we will talk about 3 of the 6 destinations on the Crown Money Map

9. Destination 1 = Emergency Savings 10. Destination 1 = Emergency Savings

Destination 1 complete

• Personal Financial Profile

• Living on a spending plan

• Save $1000

Monthly or weekly budget meetings

• Do it together

• Agree on outcome flexibly & compromise

• Determine what happens with each paycheck (income allocation)

• Refine goals

11. 12. Spending Plan

• Daves 4 walls + 2

• • Tithe

• • Food

• • Shelter

• • Transportation

• • Clothing

• • Medical

• Debt & other

• • Non essential expenses

• • • Cable, high speed internet

• • • School functions

• • Debt

• Savings & Wants/Desires

• • Entertainment

• • Gifts

13. Living Simply Quote

Give before you save.

Save before you spend.

Dont spend what you dont have.

- Renaut

14. Destination 2 = Credit Cards Paid Off 15. What Gods word says about getting out of debt.

Gazelle Intense

• Proverbs 6:1-5

• • My son, if you have put up security for your neighbor, if you have struck hands in pledge for another, if you have been trapped by what you said, ensnared by the words of your mouth, then do this, my son, to free yourself, since you have fallen into your neighbor's hands:

• • Go and humble yourself; press your plea with your neighbor!

• • Allow no sleep to your eyes, no slumber to your eyelids.

• • Free yourself, like a gazelle from the hand of the hunter,like a bird from the snare of the fowler.

16. GAZELLE 17. CHEETAH 18. 19. Debt Snowball

Pay minimum payments on all debts except for the smallest one.Then, attack that one with gazelle intensity!Every dollar you can get your hands on should be thrown at the smallest debt until its gone.

Then do the same thing with the next smallest one by applying what you were paying to the first debt to the second debt and so on.

20. Accelerated Debt Payoff Calculator 21. Accelerated Debt Payoff Calculator 22. Accelerated Debt Payoff Plan Pmt# Sears Home Depot Visa Mastercard 1 95.00 25.00 98.00 60.00 2 95.00 25.00 98.00 60.00 3 95.00 25.00 98.00 60.00 4 95.00 25.00 98.00 60.00 5 95.00 25.00 98.00 60.00 6 95.00 25.00 98.00 60.00 7 95.00 25.00 98.00 60.00 8 95.00 25.00 98.00 60.00 9 95.00 25.00 98.00 60.00 10 95.00 25.00 98.00 60.00 11 95.00 25.00 98.00 60.00 12 95.00 25.00 98.00 60.00 13 95.00 25.00 98.00 60.00 14 95.00 25.00 98.00 60.00 15 95.00 25.00 98.00 60.00 16 95.00 25.00 98.00 60.00 17 95.00 25.00 98.00 60.00 18 95.00 25.00 98.00 60.00 19 95.00 25.00 98.00 60.00 20 95.00 25.00 98.00 60.00 21 95.00 25.00 98.00 60.00 22 95.00 25.00 98.00 60.00 23 95.00 25.00 98.00 60.00 24 95.00 25.00 98.00 60.00 25 95.00 25.00 98.00 60.00 26 95.00 25.00 98.00 60.00 27 95.00 25.00 98.00 60.00 28 75.86 44.14 98.00 60.00 29 120.00 98.00 60.00 30 120.00 98.00 60.00 31 120.00 98.00 60.00 32 175.44 98.00 4.56 33 180.00 98.00 34 180.00 98.00 35 180.00 98.00 36 180.00 98.00 37 5.68 272.32 38 278.00 39 278.00 40 278.00 41 250.60 23. Destination 3 = Consumer Debt Paid Off 24. Managing debt

What if you cant make the minimum payments?

• Contact creditors to see if payment reduction possible

• See if student loans can be put on hardship deferral

• Temporarily stop paying selected debts until others are paid off

• Pro-rata payments

25. Managing debt

Pro-rata payments pay fair share to all debtors

• Calculate total debt

• For each debtor calculate their percent by dividing their total payoff by the total debt

• Multiply the total money available for debt payments by debtor percentage to get the amount to pay that debtor

26. Managing Debt

Debt Consolidation

• Do not attempt until living on a spending plan for 6 months

• Do not put unsecured debt (credit card) onto secured debt (home equity line)

• Evaluate if one payment versus multiple payments will truly affect your life

• The emotional rewards from paying off the debts will not be achieved with consolidation

• Often stay in debt longer and pay more in interest & fees

• • Do not consolidate low interest loans usually overall interest paid will increase

• Beware of scams

27. Managing debt

Review annual credit reports

• 79% contain some kind of error in survey conducted by US PIRG with 25% serious enough to deny credit, 22% listed same mortgage twice

• www.annualcreditreport.com watch out for others

• Only thing that can be removed is inaccurate information

• • Beware of clean up company scams

• Reported inaccuracies must be removed within 30 days of notification

Watch for Identity Theft

Never Cosign

• Proverbs 17:18Its poor judgment to guarantee another persons debt or put up security for a friend.

FICO score

• Not your identity

• Completely calculated on debt metrics rather than assets or income

• Affects cost of living i.e. insurance, or your ability to get a job.

28. 29. The collection industry

Why do you need to know this?

• Knowledge is power

• Knowledge leads to feeling more in control

• Knowledge leads to better decision making

30. The collection industry

Collectors job is to get money, not help you

They are trained salespeople.

They will act like your friend, but they are not your friend

Focus is to raise your anger or fear so that you will make emotional decisions

• Counteract by knowing how much you can pay to the creditor and when you can pay it.

High turnover = lack of experience = follow a script

31. The collection industry

Fair Debt Collection Act

• Restricts calls between 9 p.m. and 8 a.m. unless they have your permission

• Allows you to demand that a creditor cease calling you at work.Send certified letter with return receipt requested

• Cannot garnish your wages or take a bank account without proper court action, except IRS & student loan debt

32. Dealing with creditors

Communicate with creditors on your terms

• Determine how often you will talk to them

• Send them your budget/debt snowball

Demand they treat you with respect

• No yelling, cursing or threatening

• Hang up if they are disrespectful

Let answer machine get it & call back to talk to customer service representative

• Remember to turn the sound down to protect little ears

Utilize caller ID and talk only when you are emotionally prepared

33. Dealing with creditors

Hire someone to assist, including debt management

• Watch for scams

• Consumer Credit Counseling

• • www.cccsfl.org

• • 800-984-0977

• Family Life Resources

• • www.flrministry.com

• • 800-553-8621

• Note:some of these will appear negatively on your credit report

34. 35. Dealing with creditors

NEVER give them access to your checking account

ALWAYS get settlements in writing before paying

Divorce decree does not supersede original contract and does not release your liability

Payment in full does not remove your payment history

• Credit & collection accounts remain 7 years

• Bankruptcy remains 10 years

36. Understanding foreclosure

General process

• Varies by state, defined in contract

• 1 stmissed payment call or letter from lender

• 2 ndmissed payment call or letter from lender

• 3 rdmissed payment demand letter from lender with date of required payment to stop foreclosure process

• 4 thmissed payment attorneys get involved, court actions filed

• Sheriff or trustee sale notice

• • happens as early as 2-3 months depending on state

• • Notice taped to the door and place in local paper

• • Notice contains date of sale

• Sale of home home must be vacated

• Redemption period time after foreclosure when you can reclaim your home by payment amounts due, including foreclosure costs

37. Understanding foreclosure

Signs of risk

• Missed payment

• • Do not ignore letters from lender communicate with them

• • Stay in home

• • Contact HUD-approved housing counseling agency (1-800-569-4287) or Hope Now (888-995-HOPE)

• Havent missed but afraid you might

• • Dont ignore the problem

• • Contact lender as soon as you realize that you have a problem

• • Open and respond to all mail from lender

• • Know your mortgage rights

• • • Read your loan documents

• • • Learn state foreclosure rights

• • Understand foreclosure prevention options

• • Contact HUD-approved housing counseling agency (1-800-569-4287) or Hope Now (888-995-HOPE)

38. Understanding foreclosure

Explore Alternatives to foreclosure

• Special forbearance repayment plan, payment modification plans

• Mortgage modification refinance and/or extend the term

• Partial claim one time payment from FHA insurance fund

• Pre-foreclosure sale/short sale

• Deed-in-lieu of foreclosure

39. Understanding foreclosure

• Contact HUD counselor to explore options (1-800-569-4287)

• Avoid foreclosure prevention companies - will pay for something you can get free

• Beware of scams!!!DO NOT work with non-HUD approved agencies.

• Do not sign any papers you dont understand

• Get all promises in writing

• Do not give access to your checking account

• Beware of any arrangement where you are not formally released from liability

• Check with a lawyer or mortgage company before entering into any deal involving your home

• If selling on your own, check for complaints against buyer

40. Understanding foreclosure

www.hud.gov/foreclosure/foreclosuretips.cfm

www.hud.gov/local/fl/homeownership/foreclosure.cfm

portal.hud.gov/portal/page?_pageid =73,1&_dad= portal&_schema =PORTAL

www.realtytrac.com/foreclosure-laws/Florida-foreclosure-laws.asp

www.floridaprobono.org

41. Bankruptcy

Gives debtors a fresh start

Gives creditors a means to receive their fair share of assets

Provides some relief from creditor pressure

Some debts are not dischargeable

42. Bankruptcy

Relief from creditor pressure

• Most creditors cannot call, write, or sue you after you have filed bankruptcy

• Can stop a pending foreclosure sale of your home

• Can stop a garnishment of your wages

• Can stop a threatened repossession

• Relief might be temporary

Some assets may be kept out of the bankruptcy

43. Bankruptcy

Some debts are not dischargeable

• Child support payments

• Alimony

• Fines

• Taxes

• Student loans

• Some secured debt often subject to repossession

44. Bankruptcy

Bankruptcy may seem like the easy answer, but is listed in the top five life-altering negative events that a person can go through, along with divorce, severe illness, disability, and loss of a loved one. Very few people that have gone through bankruptcy would say that it is just a painless cleaning of your debts, where afterwards you happily begin your new life. It affects your credit, employment, and even applying for life insurance. Bankruptcy may be the only option for some people, but many times other options are better for you long-term.BankruptcyLawInformation.com

45. Bankruptcy

Crown Financial Ministries opinion - bankruptcy is permissible under three circumstances

• A creditor forces a person into bankruptcy

• Extreme financial difficulties in which there is no other option.All other options should be explored before declaring bankruptcy.

• Emotional health of borrower is at stake

46. Bankruptcy

Minimum Requirements

• Credit counseling by approved counselor

• Means test

• Debtor education classes

• Disclosure of every financial detail to attorney, courts and potentially others

• Hiring an attorney

• Estimated costs $1,000 - $4,000

47. Bankruptcy effects

Stays on credit report for 10 years

Sometimes a question on employment, credit & insurance applications that you will have to answer for the rest of your life.Lying on these is considered fraud regardless of whether it is on your credit report

Effects on cosigners

Loss of car, home, other property

48. Bankruptcy

Pray

Fast definitely from media

Consider/try all other alternatives

Learn about it

• www.bankruptcylawinformation.com

• www.nolo.com

Seek counsel

• Consumer Credit Counseling

• Family Life Resources

• Kingdom Advisors attorney

Pray & ask for clear confirmation or roadblocks

49. 50. Education Coming Soon

April

• Defining your Stewardship Theology and Philosophy of Giving

• Setting & Measuring Godly Goals

• Debt Acceleration

• Career Counseling and Resume Writing

51. Final Thoughts

Stick together

Plan Christmas Expenses & Giving

Get Counsel before major financial decisions

Stay away from temptation

• Limit media or take a media fast

• Stay out of shopping situations

• Shop with a list

• Use cash

Pray, Pray, Pray

This is a season that you will survive

52. Resources

Crown Financial Ministries articles, coach

• www.crown.org

• http://www.crown.org/Tools/Calculators/Debt_AcceleratedPayoff.asp

Family Life Resources

• www.flrministry.com

• 800-553-8621

Consumer Credit Counseling

• www.cccsfl.org

• 800-984-0977

Financial Peace University Dave Ramsey

• www.daveramsey.com

Florida Attorneys Saving Homes

• www.floridaprobono.org

Kingdom Advisors

• www.kingdomadvisors.org

53. Credits

Crown Financial Ministries

The Lampo Group - Dave Ramsey, Financial Peace University, Total Money Makeover

Housing & Urban Development

Bankruptcy Law Information

Nolo

Consumer Credit Counseling