Getting Help with Debt Collections
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Hi everybody, and welcome back to another episode of. dollars and cents HAPO Community Credit Union's financial literacy podcast. Today we're joined by Susie and Tawny of HAPO's asset recovery department, Susie, you're an analyst and Tawny, you are the asset recovery manager today. If you guys couldn't figure it out from that, we are going to be talking about asset recovery or as some people know it.
Collections. Ladies, welcome.
Scott: So, I [00:01:00] give the two names there that people might know the departments by. We refer to it as Asset Recovery. Other people out there probably know it more as Collections or fear it as Collections, almost like the IRS and taxis and the Boogeyman. Talk to me a little bit about what your department does and how you guys view the work that you do.
Tawney: So, we very much live the Hapo brand in our collection practices. So, anything that you might have in your mind where it's third party collections, or if you've been contacted, called multiple times we do it very differently. So we come from a place of member service. So we're just like you.
We go through hard times and You know, we're there to really try to see you through any hardship and get you back on your feet. And so our collections is that's where we really start from is, is the hub of value of member service and prioritizing retaining our membership as well. So you
Scott: guys don't say drive the [00:02:00] tow truck swoop in to pick up somebody's car while they're in the middle of gassing it up at a gas station, the type of videos that you might see on social media that draw attention from these.
Crazy stunt driver antics of people picking up or repossessing a vehicle. You guys don't do that type of stuff. This isn't stunt work.
Susie: No. Not
Tawney: at all. We work in the office. Yes. And it was funny because we actually had somebody apply for a position one time and that's what they thought. They thought that we would be driving around and picking up cars and that's definitely not what we do.
We hire a company for that. So all our efforts are just. Calling people we have different methods. We text, email we can chat, but primarily we are old school, so we try to get the member on the phone and hear their story and see what we can do to help them. I think a customized plan.
Nothing works necessarily for everyone. Yeah. So we just like to hear their story and see what we can do to help them.
Scott: So we're looking more at, hey, [00:03:00] what happened? Why are you in this situation? We're looking behind on payments something in the negative, in the red. So what happened? What's the situation?
We want to know. We want to help because we don't want to have to go repossess people's cars or houses or anything like that. We want them to succeed just like we want everybody else in our lives to
Susie: succeed. Yes, that's the last thing we want to do is Repossess someone's vehicle or foreclose on their home.
So we want them to call in. We want them to ask for help. And so we want to get the back story and figure out, okay, how can we get you back on track? You know, setting up payment arrangements kind of guiding them like, hey, this is what I would do. You know, if I want to get myself caught up,
Scott: okay, so let's talk about some of the situations that might get people to, to show up in your department where you're reaching out to them to try and figure out what's going on.
What are the typical life situations that you guys run into in your day to day work? Health.
Susie: Something [00:04:00] serious is happening. They just got diagnosed with cancer major, major, major, big expenses. And they, you know, are no longer going to be able to have be able to afford the vehicle or I'm sorry, the, the payment or have income coming in because they're no longer able to work.
Scott: Yeah. So like a big medical expense or a big, say even an, an unexpected injury or something along those lines that would make it difficult or impossible even to go to work. To collect a paycheck as well as additional costs on top of that life happens type of situations and in this particular case Very bad situations of life happens.
Tawney: Yeah, and I would say 90% of The situations that come up from our members are not self induced It's definitely something that's unpredictable like divorce or unemployment being laid off I know that our, you know, our area has been faced with wildfires, so you're not being able to go to work or having to re prioritize finances to, you know, rebuild [00:05:00] your home if that was the case.
So, I would say 90% is definitely relatable circumstances that have them. Yeah.
Scott: So a major change. Like when you go and get yourself a car loan or a mortgage, you're looking five, 15, 30 years in the future, assuming that your financial situation isn't going to worsen, hopefully only getting better so you can afford these things.
And if suddenly you lose 80% of your income or Something along those lines due to, say, divorce or needing to change jobs or unexpectedly being laid off, something along those lines, suddenly your financial outlook has very much changed and it's not something that you were
Tawney: planning. No, and that's why we always encourage people to reach out because we definitely have a lot of options.
I mentioned before, like, customizing payment arrangements. You know, and committing to something that you can really afford. I think sometimes it's easy to say yes I'll [00:06:00] pay that when you know, maybe you can't So just really being honest with what other financial obligations that you have When you're calling us letting us know really what the scope of your finances are so that we can say, okay This will work for you and we can you know, make it work for the next three months to get you
Scott: back on your feet Now, you said something in there that really rung with me.
Be honest about your situation. Don't let ego play into this effectively. Take a look at what your financial responsibilities are, what you have available to you, and commit to something that you can honestly commit to, not something that you think they want you to
Tawney: say. Yes, absolutely. And it's very easy to agree to something, especially like, hey, can we need the payment on this day?
Can you do it? And you're like, yeah, I can do it. And then things happen, or maybe you can't. And I think just really being honest with your situation, especially if we're seeing multiple broken arrangements you [00:07:00] know, maybe we'll be less inclined to give you that extra couple of weeks because we haven't seen that commitment from you.
So I think whatever you can afford, be honest with us and that way we can say, okay, we know what the member can pay. And so let's see what we can do.
Scott: Now one of the things that I'm kind of hearing here is there's a certain amount of leniency leverage. What's the word that I'm looking for?
Latitude in making arrangements with somebody to get something done. And it sounds like if somebody is being honest and making an arrangement and keeping with that arrangement, that they're more likely to receive that type of latitude to work with someone. Is that correct? Yes.
Tawney: Yeah, absolutely. I think we can't help the member that doesn't talk with us, right?
So that doesn't call us back. We can't help you. We can only really help the members that reach back out to us and, and let us know their story so that we can[00:08:00] see what we can do and be, and being lenient, cause that's definitely like where we come from first is, okay, what can we do? This is what they're working with.
Scott: When somebody has that type of latitude and leniency, what ends up happening with their loan? So I've got a car loan. I've fallen behind because I had an injury. I was out riding my bike and got hit by a car and now my leg's injured and I can't go to work, etc, etc. Whatever the story happens to be. I need to get in touch with you guys.
We come up with a plan that says, Hey, I can't make my regular payment because work and income has changed. What am I looking at as far as how that impacts my loan overall?
Susie: Well, once they make contact, we'll review the loan. We're going to try to keep them in, let's say, their vehicle or if it's an RV.
There could be a late fee, but we could work with you on possibly waiving the late fee [00:09:00] because we know that you're trying to make an effort, you're communicating, and you're setting arrangements, and as long as you fulfill those arrangements They need to see is that, you know, we're willing to work with them as well and do something for them, you know, also preventing possibly preventing a late credit reporting,
Scott: but the loan itself, we're not changing any of the terms on the loan.
We're working as far as the, like, The interest is still accumulating because it's a loan, it's going to have an interest rate and we're, we're working to avoid as far as minimum payments and missed payments and the, the latitude that we get, if I'm reaching out to you at right at the right out of the gate, being like, Hey, I know I owe this this month.
I'm not actually late yet. I might have some trouble making this payment. What can we do now? We're talking about, okay, I've given you fair warning. So hopefully we can work together as far as no late fees. So we already know that I'm having troubles making a payment, which hopefully we're going to make a plan.
I'm going to get out of this situation. Then everything gets [00:10:00] back on track. That's the goal, right?
Susie: Right. So we do offer the trouble debt rewrite. And again, it's not something that we promote a lot of people don't know about it unless you call us and ask for help and say, Hey, this is, you know, something that we can offer.
Thank you. It's possible that the term the the rate the term and the rate may change just because we're you know Let's say it's a 500 payment and they're only able to commit to 250. So we're gonna review the whole loan and then It can change, but that's an agreement that, you know, if they need help for six months, hey, I'm able to pay, you know, 250 for six months.
And then after that is when, you know, I should be able to return back to work. And then we can continue. We can review the loan then. And then So
Scott: adjust the loan and find a way to make a 250 payment on the loan work with new terms.
Tawney: And I like what you said about contacting us early. It's so much easier to figure out a plan before the loan is 60 days late. Because then we're a little bit more [00:11:00] limited on like, really what we can offer. So the sooner you can call us and let us know what's going on, the better. Because it might just be something like a refinance.
So let's get you over to our applications team before you get a late pay on your credit and maybe your eligibility to refinance is... So let's do that. Or maybe you can be eligible for a skip payment. So that's a deferment on your loan. So again, if you're 30 days late, you're not going to be eligible for that skip.
So contacting us early is really important. We offer a 15 day grace period on all our loans. So you usually have that that you can rely on. Cause a lot of members are calling us, Oh, I'm going to be late, you know, five days. Hey, don't worry about it. Take the time that you need. And then, yeah, we get, we work in more serious things like.
Susie mentioned the Troubled Debt Rewrites that's for like pretty extreme hardships, but within that range, okay, yeah, you're gonna be 30 days late for the next two months, but after that payment, that next payment comes in, we can give you a skip. So there are [00:12:00] things definitely down the line to if it's just going to be a couple of months to get you current waiving late fees is definitely something that we do.
I think Capo pretty, I guess they, you, they don't calculate late fees, like incredibly expensive fees. So like, I'm not worried about waiving a 10 late fee. So, yeah,
Scott: you mentioned. In the beginning of that 60 days, we like if you're, if you're more than 60 days. And then what is some of the timeframes where obviously we want people to reach out as soon as they know something may or may not be happening, but if something is slid and we're at 60 days, what are kind of some of the hurdles that now you have to go through for somebody who's that late, obviously at 30 days missed loan payment deferral.
Is a thing that's out the window, but what, what are we getting into further on?
Tawney: I think it's after 60 days, you know, it's easy to just chase that next payment and just trying to get that next payment in to avoid further action, whatever that may be. So it's [00:13:00] just a little bit harder to like make a plan that's long term.
It doesn't mean we can't do it. I mean, it's really, again, up to the member and like what they can afford. We always start with, okay, what are your paydays? Let's look at that. Let's look at the calendar. Again, if it's just an extension this one time we can probably do it. But if it's something longterm, okay, let's look what we can do.
Maybe making a half a payment more so we offer partial payments. So that's a different, definitely a way to get caught up
Scott: as well. So it kind of comes back to that whole. You're working with us as opposed to you haven't bothered to reach out. There's multiple things that have happened as opposed to, Hey, I know I'm going to be late this one time.
What can we do about it now? You're, it comes back to that that latitude and the leniency that we talked about, if you're working with us, then. We can give you a little bit more. We have more options, but if it's gone this long, you haven't made a plan. We don't know how reliable you're going to be. It's just multiple months [00:14:00] worth of bad
Tawney: record, if you will.
Yeah. And I, we have such a mutual interest in getting our members one to pay, but also to keep their vehicles or what have you. We're not a third party collection set doesn't have any skin in the game, right? So this is money that we lent. And so if If a member defaults or stops paying, that's a loss to our bottom line, so we are definitely invested in the success of our members just from that point of view, but also just the wellness of Our credit union and having lower the lowest delinquency that we can
Scott: have yeah And the credit union movements entire motto is people helping people.
That's what we are trying to do is actually help people out here Let's go on. Let's see what we've got as far as like some actual stories of some situations that you guys have dealt with Success stories because everybody loves a good success story. Do you have any that you can share?
Susie: I would say I dealt with this member over in the Seattle area and [00:15:00] we made just arrangements just every month, you know We kept him out of repossession and he was just call me and like, hey, you know, we're gonna make a payment I kind of built like a personal relationship with this guy and with this member.
I'm sorry and just When you build a relationship, I feel like you want them, that you get them to communicate more with you and they call in like, Hey, I know she's going to work with me. You know? You're on a team at this point. I eventually just kind of, I think every month I took a payment from this guy, from this member until it was paid off.
Scott: So how long, how long did that last a few years, a few years, so regular check ins again, communication is key talking back and forth. And like you said, you're on like, it feels more like a team effort. At that point, you make a relationship with them, right? And you know who you're going to call in and talk to about this.
They know your situation and you get a bit of a rapport as far as, Hey, this person isn't judging. Based on [00:16:00] this, we're working together. We're we're going to succeed in this.
Tawney: Yeah, and we have one of our gals set up an arrangement with a member, and it took it's 25 a week towards their charge off balance, and I think it took them 10 years to pay it off, but every single week, the member paid the 25, and at the end, You know, we were so excited to call the member and say, you are done.
You completed your arrangement. This is paid off. Like, let's move on. And I think also like really important is that, Hey, you know, you know, you want another loan with us. Like, we're willing to do that. It's never like Bernie really bridges. I think it's let's figure out how to, you know, take care of the, any outstanding balance or anything that you owe and then, you know, rebuild that relationship with us and continue to lend.
Scott: And 10 years, that is a long commitment. That is 520 payments. If my math is quick and correct on 10 years weekly that is commitment to a plan is what
Tawney: that is. I think two and just, you know[00:17:00] the member buying into, you know, the relationship with us and saying, Hey, I, I fell on hard times. This happened, this is my reality, but I can You know, pay 25 a week.
And I'm out of it. And we were happy to do that.
Scott: Nice. It's always great to hear stories of coming to a conclusion where people can actually commit to a plan because one making that plan is one thing. Like we said, be honest about what you can do. And then committing to doing that and following through, which then eventually gets you out.
Eventually, in this particular case, ten years. That is a legitimate commitment right there to a habit and continued work with that. Love to hear things
Tawney: like that. I would say a story of what not to do is important too because we do have a lot of members. That I would say fall for these debt settlement companies and I think you've probably heard it on the radio saying, you know, you don't have to pay all your debt.
Like we can you have a right to settle your debt. And I [00:18:00] guess a lot of people have rights to do what they want to do, but it doesn't necessarily mean that's going to be best thing for you financially. And so I would always caution any member that's thinking about settlement. It will detrimentally affect your credit.
You will lose the relationship you have with your credit union or bank. It will report to your credit. And really, I don't think you necessarily save on the long term because of the impact it has just on your whole financial well being. I was going
Scott: to say, they don't exactly advertise that side of things, the negative impact, your credit score, your, your relationships with people.
The fact that it is what probably a major cost right out front to, to handle that. Yeah.
Tawney: And I think with the settlement companies, you pay them and then they bank the money and then they. propose a settlement to us when, I think just contacting us, making arrangements with us directly that way it saves you from any sort of charge off or even possible legal action because of, you stop paying.[00:19:00]
Scott: Now, along with making a plan of action, sticking to it and of course not going and doing these things that are going to damage your relationship, what sort of resources do we have available for people for this? I know we've done episodes with our financial coaches. I'm sure that's a, that's a tool out there for everybody.
What, what do we have available for members and non members alike, I guess if you find yourself in a situation like this?
Susie: Well, you know, when they contact us and they say, Hey, I need help, or I'm just having trouble, you know paying on my debt or want to consolidate my debt. We can, you know, we work with Green Path.
We can refer them to them, and then they can figure out, you know, sort of payment plan.
Scott: Okay, and who exactly is Green
Tawney: Path? It's a debt management company that we partner with. So it's free to our memberships. You call them and discuss your budget and your financial obligations and they can help you set up a payment plan to be able to, you know, [00:20:00] stop.
Accruing debt and then start paying down. We also have financial counselors within our department and within our branch And you don't have to have any HEPA membership to reach out to them. So we have you know a skilled team of 15 asset recovery specialists that are trained to customize payment plans as well.
So if necessarily you don't want to reach out to you know, a company or anything, you can just reach out to us
Scott: directly. Okay. So we've got resources in house, obviously the asset recovery team, as you mentioned financial counselors or financial coaching that we offer. At all the branches, if I'm not mistaken, we have I think last count I saw was over 125 certified financial coaches on staff and then green path, which is a third party company debt consult, not consolidation.
That's the wrong word, debt management solutions and other external resources. I know that we have some information about them on our [00:21:00] website that people can go look up and see. Would they be a resource for people? to leverage early on to keep themselves from getting it preventative measures.
Tawney: Yeah, absolutely. So we always try to contact our members via email letter early on. So if you do find yourself past two, you're going to get a letter from us with options. So one to reach out to us directly and then with the. resource of green path. And it's really easy and convenient. You can contact us by phone, text, secure messaging, chat on our website as well.
So if you're a little bit nervous about calling, I mean, I know that I hate calling places. So sometimes chat is easier. So, yeah, so reach out to us and we can refer you to anything and then all the information is on our website to All
Scott: sorts of channels to reach people where they live. I've had conversations about that before as far as technology in banking being able to communicate with people on the platform [00:22:00] that they're comfortable with.
Not everybody is as comfortable, like you mentioned, having a, a phone call in a situation. Maybe you feel nervous, maybe you feel a little awkward about announcing your situation to somebody over the phone. Text or chat is going to be easier to just type it out and hit enter as opposed to having that conversation with somebody.
So all sorts of available tools and avenues to have these conversations to reach out and communicate. Any last thoughts before we sign off, ladies?
Tawney: I would just say I think it's important before you see yourself maybe in collections is the preventable measures that you can take to avoid being in collections, and I think that can just start from the first time you purchase your loan, so maybe that's purchasing gap insurance or that's a service contract, so if your vehicle breaks down, you have a resource to fix it without coming out of pocket for those repairs being able to afford the insurance.
So a lot of people don't consider their [00:23:00] monthly payment in addition to their insurance. So that can be quite a hefty cost, especially depending on the make and model of your vehicle, your driving records. So maybe you are at the max. top of your budget at, you know, 300 for a monthly payment, but then you have your 100 car insurance.
Scott: you're well above your monthly expenditure. Yes.
Tawney: So a HEPA does require insurance on their vehicles. So that can kind of sometimes get members into a little hot water if their insurance laps. So maintaining insurance on the vehicle. We also offer like that protection. So. That is something directly with HAPA.
So if you're unemployed, there's protection that you can file a claim. Or if one of the members is deceased or passes away, there's that type of protection. So I think all of those things before you get your loan is something to consider just to help you out when life happens and that unexpected happens.
Scott: Yeah. I mean, we have conversations about [00:24:00] budgeting. and about emergency funds and planning for things like this. And like we mentioned, sometimes those, those plans, the catastrophic events happen, and maybe your thousand dollar emergency savings fund just isn't going to cover exactly that. But that's part of why it's there is to help you through some of those bumps in the road, if you can do that.
But all of these other resources you mentioned are also there so that you can help plan ahead and kind of smooth out any of those bumps in the road.
Tawney: Yeah, and then I mean, if the unexpected does happen, we just want to encourage you to call us. We have a really great team. We have a lot of experience in dealing with many different hardships.
So just give us a call and talk with us.
Scott: Yeah. Sounds like this is exactly the type of group that if you are in hot water, you want to reach out and work with. As opposed to be concerned about you are not scary like I thought when we scheduled this everybody out there listening contact communication is key.
Get in [00:25:00] touch and get in touch early so that a plan can be put in place before anything bad happens. Ladies. Thank you very much for joining me in the studio today. It was a pleasure to get to chat with you about asset recovery and for everybody out there, this has been another episode of dollars and cents.
Happy community credit unions, financial literacy podcast until next time.