Freedom Debt FreedomDebt.com Press Articles and Information

Our team has come together with one vision: to help people across America attain Financial Freedom.

Debt and financial difficulties are leading causes of personal anxiety, depression, and stress. Our goals, at FreedomDebt.com, are to alleviate the pressures of financial strain, to get our clients back on solid financial footing and personal happiness. We offer one-stop-shop services to get you out of debt and on your way to permanent financial freedom. Whether you are trying to reduce your debts, cut your monthly payments, protect your credit rating, avoid bankruptcy, stop creditor harassment, prepare for home ownership, freedom we are here to help you today!
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The Founders of Freedom Financial first met many years ago while in Business School at Stanford University. Recognizing the overwhelming burden that personal debt had placed on Americans, and the usurious rates and fees consumers were struggling with, the team decided to leverage their decade of financial advisory experience to create a truly unique company and build a leading company to help consumers in debt. Instead of simply lowering interest rates (like credit counseling), or shifting unsecured debt to secured debt (like credit consolidation), Freedom is a pioneer with an innovative process for actually cutting the total amount of unsecured debt that consumers owe. We succeed by using our relationships and scale with creditors to negotiate down each individual consumer's debt balance and payments. However, not everyone qualifies for our "Debt Reduction Program". We stringently qualify and underwrite our customers, and only accept consumers that meet our guidelines.

Our friendly and experienced representatives will work with each consumer, first to assess your eligibility for the "Debt Reduction Program," then to set up affordable payments that fit within your budget, and ultimately get you out of debt while protecting your credit rating. This is the fastest and best way to get debt free; and without declaring bankruptcy.

Best of all, at the end of our Debt Reduction Program, not only are you debt free, but our affiliation with the Freedom Financial Network allows our advisors to help you purchase a home, or set up a financial plan to start earning interest, instead of paying your hard-earned dollars for interest charges!

While we hope to have your friendship for life, our goal is to have no repeat customers. We want everyone who graduates from our program to be debt free for life.

Give us a call Toll Free at 1-888-710-3328 to how much you can save. All of our offices serve clients nationwide, however we now have local offices thru out Texas and can offer in person free consultations in San Antonio, Austin, Houston and the Dallas/Fort Worth areas.

Press Articles

As alternatives to consumer bankruptcy dwindle, Brad Stroh and Andrew Housser offer a third-party alternative to those overburdened with personal debt.

You've lost your job, experienced a financially devastating divorce, or suffered a catastrophic illness that costs thousands of dollars not covered by your insurance. Whatever the impetus, you've plunged into the fiscal nightmare zone, broke and in debt big time, and you don't know where to turn.

This scenario is becoming all too common for millions of Americans, many of whom are in hock up to their eyeballs even under the best of circumstances. And with the cost of living ever rising and recent laws making it harder for debtors to find relief (see sidebar), individuals who fall on hard times have fewer and fewer options available to them. Fortunately for some, a new company now helps people resolve their tax and mortgage debts, and debts not covered by collateral-including credit-card balances-in a way that puts the consumer first. Freedom Financial Network LLC, headquartered in San Mateo, Calif., and founded by Brad Stroh and Andrew Housser, both MBA '02, helps individuals and families experiencing financial distress to reestablish their fiscal footing as quickly as possible.

"We don't just consolidate loans and move debt around, as most advising agencies do," Stroh explains. "Our business innovation is that we save consumers the maximum amount possible by negotiating with creditors to reduce the principal owed, and we're paid by the consumer, not the creditor, which eliminates any conflict of interest."

Freedom Financial says its model is a win-win-win for everybody: Consumers on average pay only 43 percent of what they owe; creditors recoup more than they would have if they had sold the delinquent loan to a third-party collection agency; and Freedom Financial earns commission based on what it saves the client. The company's fee to clients varies, but is approximately a quarter of the amount of principal it manages to knock off. The firm says it has negotiated debt relief for more than 4,000 clients-who average $30,000 of debt each-over the last fiscal year. "We're achieving client savings of about a million dollars per month," Stroh says of his company, which enlists the help of 70 employees, including two other GSB alums (Jeffrey Staley, MBA '02, and Louis Lipani, MBA '04).

Stroh and Housser founded Freedom Financial in 2002 after working for years in the finance and investment industries. Noting rising consumer debt levels and the lack of adequate debt advisory services, the two perceived a business opportunity. Now, with consumer debt at an all-time high and relief options at an all-time low, the two have found more than a niche. "It's great to be profitable and growing but still genuinely helping thousands of people," Stroh says. For more information, visit freedomdebt.net

New legislation making it much more difficult to file for Chapter 7 bankruptcy protection-the filing that erases all debt-was to go into effect in October. Now filers must pass a stringent "means test" to prove they have no ability to repay. Many consequently will be forced to pay much or all of what they owe on a strict timeline rather than have their debts dissolved as in the past. A bankruptcy nevertheless will appear on their credit report.

"This will significantly extend the period of financial trauma for many Americans who turn to bankruptcy because they are truly in desperate situations," comments Brad Stroh, co-CEO of Freedom Financial Network. The law also may put a damper on America's entrepreneurial spirit. "Many small businesses are funded with people's personal credit cards," Stroh notes. "If there is no longer the safety valve of bankruptcy for failed ventures, people will be much less likely to take business risks in the future. Our entire economy could be negatively affected."

But critics of existing bankruptcy laws say that bankruptcy abuse ultimately creates a burden for consumers, and that the current system in fact makes no distinction between the millionaire and the struggling family. Meanwhile, the government, nervous about the $10 trillion of consumer debt hovering over the nation, also has mandated a rise in minimum credit-card payments. That means by the end of this year, many people's monthly credit-card payments could double to 4 percent of their outstanding balances. "Individuals scraping to make the monthly minimum will now be bumped into the financial hardship category," Stroh says.

Adding to the one-two punch is a third hit: The federal government has shut down many debt-counseling and credit-counseling agencies posing as nonprofits because they are, in fact, outsource collectors making money from credit-card companies. "As imperfect as they are, they've been people's main recourse for assistance with debt hardship," Stroh says.

Credit card companies wrote off $51.1 billion of debt in 2002, which means business is good for FreedomDebt.com, a San Mateo startup that provides debt settlement services.

Debt settlement can be different from traditional credit counseling. Many credit counseling services have landed in legal hot water over their funding from credit-card companies and accusations that they focus on securing the largest possible payment for the card issuer. FreedomDebt.com says its focus is solely on reducing the amount the cardholder owes.

"A problem we've had to overcome is that the regulatory and legal issues of credit counseling are clouding the larger debt-management umbrella," co-founder Andrew Housser said. "We're not marketing ourselves as a nonprofit. We are paid by the consumer based on our success."

Housser and his partner, Brad Stroh, studied the industry and decided no prior entrant to the new debt settlement niche was doing it right. They opened their own shop in late 2002, and have used revenue to fund growth.

"We're already one of the biggest companies in the industry. And we're doing well," Stroh said.

FreedomDebt.com works with clients -- who on average have over five credit cards and $30,000 in unsecured debt -- to understand their financial needs and problems, and determine a budget. Clients make monthly deposits into escrow accounts in their own names. FreedomDebt.com, meanwhile, negotiates a smaller amount for them to pay, usually less then 40 percent of their total debt. The company's fees are a percentage of what customers save. Those who abide by the program are debt-free within 30 months.

Creditors prefer traditional credit counseling, which often secures them all they are owed, plus interest. But with the amount they write off steadily increasing, 30 cents on the dollar has attractions.

"In the credit counseling world, where a lot of mom and pop shops sprung up of people who thought they could make a quick buck, these former Stanford guys (Housser and Stroh) are very impressive," said Doug Nunes, former CEO and president of AmeriDebt, one of the largest credit counseling companies, and a new adviser to FreedomDebt.com.

"They spent a lot of time looking at the pitfalls of credit counseling," Nunes said. Even more importantly, they have worked to understand how the credit card companies work, which makes them more effective negotiators.

FreedomDebt.com also works closely with customers, which is one reason their dropout rate is very low, even among their clients who previously failed at credit counseling.

Though they want to keep operations lean, they expect to double their staff by year end no matter how the economy does.

"We're such a debt-embracing culture," Stroh added. "Unfortunately, it's not difficult to find someone with debt problems."

Bankruptcy laws are about to tighten just as minimum payments rise on credit card debt.

Deborah Falsman ran up $25,000 in credit card debt when interest rates were low, credit was easy and bankruptcy offered a simple escape hatch.

Now, the school health clerk is looking at payments that could rise by hundreds of dollars a month, thanks to new federal regulations aimed at helping Americans tame their soaring credit card debt.

""You think you can pay $500 or $600 a month and get it over with," Falsman said of her credit card debt, which financed a remodeling project for her home in Denton, Texas. "But it never seems to work out that way.""

Consumer advocates are largely applauding the changes, which will take effect by Jan. 1, because they will save millions of credit card holders money by trimming what they pay in interest over time.

But for those living close to the financial edge, the combination of higher credit card minimums and rising consumer costs - especially for gasoline - could push them over the brink.

Bankruptcy offers one means of respite for these people, but starting Monday that option will be much tougher to pursue. New rules will make it harder for people to qualify for Chapter 7 liquidation bankruptcies, in which they surrender most assets to creditors in return for wiping out their debt.

"No one could imagine that all of these things would line up at exactly the same time," said Bradford G. Stroh, co-chief executive of Freedom Financial Network, a debt-counseling firm based in Northern California. "But they are all hitting the American consumer in the fourth quarter of 2005. On the heels of that, the overleveraged consumer's one parachute was Chapter 7 bankruptcy and that parachute is closing."

Americans, who have seen energy costs climb 20.2% in the last year, are now finding out about higher minimum payments on their credit cards.

Most major credit card issuers have allowed customers to repay just 2% of their balances each month. For people with high interest rates, or who don't pay their bills on time, the minimum often isn't enough to pay down their debt.

For example, Citibank charges its higher risk cardholders about 29% a year, or 2.42% a month, in interest. Until recently, it allowed these cardholders to make minimum payments that amounted to only 2.08% of their balance each month, spokeswoman Janis Tarter said.

In 2003, the four primary bank regulators - the Federal Reserve, the Office of the Comptroller of the Currency, the Office of Thrift Supervision and the Federal Deposit Insurance Corp. - agreed that these artificially low payments allowed consumer debt to snowball out of control. The regulators issued "joint guidance" demanding that monthly payments be set high enough that revolving balances would be repaid in 10 years.

Regulators later modified that dictum, requiring customers to pay at least 1% of the principal balance, plus all interest and fees that accrued that month. The rule takes effect Jan. 1, although some companies are already implementing it.

Under the new rule, a cardholder paying 29% interest on a $10,000 balance would be required to pay at least $342 a month - or 64% more than under the old standard.

Minimum payments will vary from customer to customer, depending on the interest rate of the card, the size of the balance and other factors.

That makes it tough for people such as Falsman, who has roughly a dozen cards at varying interest rates, to figure out how much more she will have to pay. Falsman, who with her husband takes home about $7,500 a month, said she got hooked on several cards with low-cost introductory "teaser" rates.

Falsman said the couple must now pay about $500 a month to meet their minimum requirements. She said she already had gotten notices from several card companies saying her minimum payments would rise by 25% to 50%.

Financial planning experts say that a consumer with $25,000 in debt who is paying 29% interest could be required to pay at least $855 a month under the new formula - $605 in monthly interest and $250 in principal.

Lisa Moore of Sacramento, who has $28,000 in debt on six credit cards, said so far only one of her lenders had sent a letter warning about a rise in the minimum payment. That card, which has a $6,500 balance, will require a $280 minimum payment starting next month, up from $180, she said.

"I'm glad I have a good job," said Moore, 48, a library worker. "Otherwise I wouldn't be able to make the payments."

Not everyone will see a big hike, however, because the old minimum payment formula is sufficient to pay down debt for people who use cards with lower interest rates.

For example, a credit card holder who pays 10% interest and has $10,000 in debt would accrue about $83 a month in interest charges. Add on 1% of the principle, or $100, and the cardholder's minimum payment would be $183. That's less than the $200 - 2% of the balance - that credit card companies demanded under the old rules.

Consumer advocates consider the higher minimums to be better for individuals in the long run. The average household credit card balance is $9,205, according to credit research firm Cardweb.com, up from $8,940 in 2002. Nationally, outstanding credit card debt has ballooned from $443.49 billion in 1995 to $797.97 billion currently.

"Raising minimum payments makes sense because it allows consumers to pay off their debts faster and save thousands of dollars in interest," said Joseph Ridout, who manages the consumer hotline at Consumer Action in San Francisco.

About 42% of all the U.S. 180 million credit card holders pay off their balances in full each month, 33% always pay more than the minimum and 15% don't use the cards, according to a survey this summer by the American Bankers Assn.

It's the remaining 10% of cardholders that lenders and consumer advocates are worried about, especially the roughly 4%, or 7 million people, who always pay just the minimum, the survey found. This group is also considered to be at a higher risk for filing bankruptcy - something that will get tougher starting Monday.

The new law requires anyone attempting to file a Chapter 7 bankruptcy to go through credit counseling and provide the bankruptcy court with a detailed financial statement.

If the debtor's income is above a certain amount, the individual will be forced into a Chapter 11 "reorganization" bankruptcy, which requires him or her to make payments to creditors for five years.

No one is quite sure how many people will be barred from Chapter 7 bankruptcies under the new law, but some indebted consumers aren't taking any chances.

Chapter 7 bankruptcy filings rose roughly 18% in the three months ended Sept. 30 compared with the same period last year, and the pace of filings may be picking up. Pasadena attorney Charles Brash said he had filed more bankruptcies in the last few days than he filed in all of last year.

"Last year, we were able to keep people out of bankruptcy because interest rates were so low we could help them refinance their houses, so they could avoid it," Brash said. Now, he says he's got his office staff working late nights and weekends to keep up.

U.S. credit card issuers, ranked by debt outstanding as of June 30. BofA will be the largest after merging with MBNA

BEFORE 'MEDICAL BANKRUPTCY': CONSUMER OPTIONS CAN SALVAGE CREDIT
--Freedom Financial Network Comments on Harvard Study Citing High Medical Expenses as Cause for High U.S. Bankruptcy Filings --

SAN MATEO, Calif., Feb. 14, 2005 - Nearly half of the nation's 1.5 million bankruptcy filings in 2001 were because of medical costs, despite the fact that 75 percent of people who experienced "medical bankruptcy" had health insurance, according to a new study from Harvard Law School and Harvard Medical School. While medical costs and subsequent loss of income can cause serious financial troubles, an alternative to bankruptcy does exist, says Freedom Financial Network, LLC, a California-based debt resolution service.

"Many people don't realize that bankruptcy is not the only solution for people who have the type of financial trouble cited in the Harvard study," says Brad Stroh, co-CEO of Freedom Financial Network. Consumer debt resolution, he explains, is a solid - but less well-known - alternative. "When medical costs have run finances into the ground, debt resolution companies such as Freedom Financial Network work for consumers to negotiate lower payments to medical providers. Most of the time, consumers gain significant savings."

Unlike credit counseling, debt consolidation or debt management plans, consumer debt resolution lowers actual principal owed - not only interest rates or minimum payments. While the credit counseling industry has come under fire by the IRS for taking advantage of "non-profit" status and relying on funding from creditors, debt resolution serves the consumer directly, in a position of mediation and negotiation with unsecured creditors. For people who have severe debt trouble caused by medical expenses - as well as job loss, divorce or other unexpected events - the result is a less complicated alternative to getting back on financial track.

Before filing for bankruptcy, consumers with severe debt from medical problems should consider these options:

1 Plan ahead with insurance - Before medical costs arise, be sure you have the best insurance you can get. Some plans now carry lifetime maximums of $8 million or more. "One tough illness can run through a $1 million maximum before you know it," Stroh notes.

2 Pay critical bills first - The most important payment to make is your mortgage. "If you fall behind, you can lose your house," Stroh says. "Hang onto your house above all else."

3 Know what you owe - After a serious medical incident runs up hospital bills or leaves you without income, collect all your bills to learn exactly how much you owe. "Beware of being socked with a late, huge hospital invoice," Stroh suggests. Call the accounts payable departments of all involved parties - hospitals, doctors' offices, emergency rooms (which might bill separately for physicians) - to sum up costs.

4 Choose help carefully - If you need help to negotiate payments, be sure you are working with a reputable debt resolution service that works as an advocate for the consumer, not creditors. Payments to help resolve your debt shouldn't add to your overall debts, and all payments should be clearly spelled out from the beginning. At Freedom Financial Network, for example, consumers pay a fee that represents a nominal percentage of savings gained. Don't allow "optional" fees; find out exactly what your obligations will be.

"Filing for bankruptcy can destroy your credit rating for a decade," Stroh explains. "Customers with serious medical bills have been through enough trauma. They need to understand that they have options to resolve their debt, with less impact to their credit rating than bankruptcy."

Freedom Financial Network, LLC (www.freedomdebtrelief.com) provides consumer debt resolution services through its FreedomDebt.com, Freedom Foreclosure Relief and Freedom Tax Relief divisions. B ased in San Mateo, Calif., Freedom Financial Network serves more than 2,000 clients nationwide and manages more than $70 million in consumer debt.

Shopping strategy for holidays
12/4/05
By Jack Sirard

San Jose Mercury News

Shoppers who are both well prepared and disciplined will no doubt enjoy a happy holiday season.

But those who rush headlong into the stores flashing their credit cards at the first sign of a potential bargain could be in for a real headache when the bills come rolling in early next year.

And for those who are already struggling to make ends meet, holiday shopping could lead to a financial disaster.

Donald Rehorn, community relations liaison for ByDesign Financial Solutions, which does business as the Consumer Credit Counseling Service of the Sacramento Valley, points out that even if you haven't saved money ahead for the holidays, there are a number of steps you can take to keep your finances in good shape.

For openers, he says, ``You just can't wing it. If you head out to the malls and stores without a plan, you're inviting a financial disaster.''

Most consumer experts agree that it's critically important to put your plan in writing before you leave your home.

Brad Stroh of Freedom Financial Network in San Mateo says the cornerstone of a working spending plan is a budget that includes both a cumulative amount for all giving during the season and a rough spending estimate for each person on the gift-giving list.

When you go shopping, Stroh says, leave the plastic at home. Once you have your spending plan, use individual envelopes to put in the cash for everyone on your list. When the money is gone in that envelope, you're done spending on that individual, he says.

Rehorn points out that one mistake consumers frequently make is neglecting to include all the extras of holiday spending beyond gifts: such things as cards, decorations, travel and entertainment.

Two other spending guidelines that his organization uses are to limit holiday spending to less than 1 percent of your net annual income and to have a definite payoff date if you're going to use credit cards.

``If you're not going to be able to pay off all your holiday credit card debt in two months or less, you can't afford it.''

5 Ways to Numb the Financial Pain of Divorce
Freedom Financial Network Helps Divorcing Couples Manage Debt

October 2004 - Whether it comes before or after the papers are signed, economic hardship is all too familiar to many couples who divorce. Following a few financial guidelines can ease the burden during this difficult time.

Each year, 1 million Americans will divorce. More than 80 percent of divorcing couples cite "debt and financial distress" as the primary factor in the dissolution of their marriages, according to an American Bar Association survey, and studies find that most families suffer a financial decline following a divorce. By taking steps to protect credit, families can come through in much better shape. Freedom Financial Network, LLC, a national consumer debt resolution service provider, encourages divorcing couples to take the following steps:

1. Accurately assess debts and liabilities. First, see yourself as your creditors do. Online (see www.myfico.com ) or by phone, you can request a "tri-merge" credit report (a summary from all three major credit reporting bureaus). Note all of your existing shared and individual liabilities. Settle (or get a judgment) on how you'll allocate these responsibilities.

2. Plan how to handle your home. If you own a home, the mortgage is likely your most significant monthly payment. Be certain you understand how you'll resolve monthly mortgage payments, and how you'll divide the home's value - whether one partner buys out the other now, or the home is to be sold after children are grown.

3. Budget for payments. Create a detailed budget, based on your new income level, and use free cash flow to pay off debts. Most people find the most efficient way to pay off debts is to first pay off smaller bills - starting with under $100 - then pay off loans and unsecured debt, such as credit cards, beginning with the account with the highest interest rate.

4. Make sure your ex-spouse is making his or her payments. If possible, make provisions in the divorce agreement for reporting on resolution of significant debt. There are important implications for you personally if your spouse does not meet his/her end of the bargain on liabilities allocated through the divorce proceedings.

Call all creditors for shared accounts (credit cards, gas cards, department store cards, phone cards, etc.). Close the accounts if you are not carrying balances, or remove your name from jointly held accounts. Remember that for jointly held credit cards, and for any other debts incurred during the marriage in community property states, you have shared liability - and thereby share any potential negative credit rating impact. This means that if your spouse does not make payments after the divorce, it could come back to haunt you - and your credit rating.

If you owe back taxes, be aware that the IRS does not have to honor a decision from a divorce judgment. Consult a tax expert to help with your divorce tax planning.

5. Focus on rehabilitating your credit and financial health. Begin a savings plan. Reinvest any proceeds or equity that come out of the divorce proceeding, and be especially cognizant of building yourself a retirement fund for the future.

If you find yourself in trouble during this stressful time -- in which you must make many financial decisions -- seek help immediately from a reliable, professional debt resolution firm. Be sure to investigate the company you choose to assist you, and seek out a company that operates for the consumer, which is markedly different from credit counseling, debt consolidation, and debt management firms.

About Freedom Financial Network

Freedom Financial Network, LLC (www.freedomdebtrelief.com) provides comprehensive consumer debt resolution services through three divisions: FreedomDebt.com, Freedom Foreclosure Relief, and Freedom Tax Relief. Helping consumers resolve their debts for the least possible personal cost, the company's s ervices offer an alternative to bankruptcy, credit counseling, and debt consolidation.

Freedom Financial Network represents the consumer exclusively, and serves in a position of mediation and resolution to h elp clients minimize monthly payments, cut total debt balances, protect credit ratings from bankruptcy, and re-establish solid financial footing as quickly as possible. The company's 33-month Debt Resolution Program negotiates with unsecured creditors, often resulting in resolutions that save clients nearly 60 percent of debt balances.

Based in San Mateo, Calif., Freedom Financial Network serves more than 2,000 clients nationwide and manages more than $70 million in consumer debt.

January 2005 - This New Year, 31 percent of Americans who planned to make a New Year's resolution said they would focus on firming up their financial footing, according to a survey by Bankrate.com - but if citizens' track record on resolutions is any indication, many of us have fallen off the bandwagon already, just a few weeks into the New Year.

Last year, just 57 percent of people who made a resolution kept it, according to a survey by the Marist College Institute of Public Opinion, based in Poughkeepsie, N.Y. And, as we all know, financial resolutions can be among the toughest to keep, especially for people who already face financial hardship. Here, five tips from Freedom Financial Network will help you get back on the fiscal bandwagon.

• Get back on the horse. If your first weeks of financial responsibility haven't gone as well as you planned - or if a sky-high Christmas credit card bill just arrived - don't despair. Most important is working to change long-term habits. Try building a monthly budget divided into weekly increments, and if one week doesn't go well, make a fresh start the next week.

• Set goals. Set out specific goals for yourself, and then plan to meet those goals. Do you want to eliminate your credit card debt, save 10 percent of your income for retirement, cut back discretionary spending by 40 percent? Without a target, you can't know where to go, so name your intention.

• Make a plan. As the saying goes, a resolution without a plan is only a wish. How will you reach your goal? Eating out less or sticking with a cash budget can trim excess spending. Keeping a spending journal, writing down every penny you spend daily, will show you where the bucks go. Then you can identify which areas can be trimmed - or if you'll need to find a second job to finance your dreams.

• Work your way up. To eliminate credit card debt, first make sure you can make minimum payments on all your debts. (If you can't do that, consider seeking help from a consumer debt resolution organization such as Freedom Financial Network.) Then, pay as much as you can on the card with the highest interest rate, making minimum payments on all other obligations. After you pay off the first card, pay the same amount, plus the previous minimum payment, on the next highest-rate card, and so on, until your debt is eliminated. "It can take a while to pay everything down, so don't get discouraged," said Brad Stroh, founder and co-CEO of Freedom Financial Network. "But if you are persistent, eventually, you will eliminate that debt."

• Stay inspired. Why do you want to keep your resolution? Give yourself rewards for small milestones attained, Stroh suggests - say, if you've slashed your entertainment budget to pay off one credit card, tell yourself when it's done, you'll treat yourself and your spouse to a movie out. If you want to get out of debt so you can save to buy a home, cut out or sketch a picture of your dream home and post it somewhere you can see it regularly. Or, keep a copy of the image in your wallet to remind you not to spend frivolously.

Freedom Financial Network, LLC (www.freedomdebtrelief.com) provides consumer debt resolution services through its FreedomDebt.com, Freedom Foreclosure Relief, and Freedom Tax Relief divisions. The company represents the consumer exclusively, serving in a position of mediation and negotiating with unsecured creditors to offer an alternative to bankruptcy, credit counseling, and debt consolidation. B ased in San Mateo, Calif., Freedom Financial Network serves more than 2,000 clients nationwide and manages more than $70 million in consumer debt.

SAN MATEO, Calif., June 2, 2005 - With mortgage interest rates poised to rise, the U.S. economy teetering between expansion and uncertainty, and American consumer debt still raging, many U.S. homeowners risk foreclosure on their home - but they don't have to lose their slice of the American dream, says Andrew Housser, co-CEO of Freedom Financial Network.

According to the Mortgage Bankers Association of America, 4 percent of mortgages are in delinquency in early 2005. With $9 trillion in outstanding U.S. mortgage debt, that places $360 billion at risk of foreclosure.

"Homeowners can make choices - ideally, before they purchase a home, but even after problems arise - that will allow them to keep a home, or at least minimize the damage a foreclosure could have on their futures," said Housser, whose company provides debt resolution services for people in serious debt hardship, particularly those who incurred debt because of divorce, job loss, medical problems or other traumatic events.

Tips to Prevent, Avoid Foreclosure/222

If foreclosure is already on its way, homeowners still have several options, Housser says:

"A reputable foreclosure assistance organization, such as a debt resolution firm, can help with these options," Housser advises. "Check with your local Better Business Bureau to make sure your chosen company is on the up-and-up."

Housser suggests that people facing foreclosure be wary of so-called equity skimmers. " If your house is facing foreclosure, you will probably receive solicitations from several people who are looking to 'help' you prevent foreclosure by offering to sell your home for you or by taking ownership of your home," Housser cautions. "In most cases, these solicitations are scams trying to take advantage of people in difficult situations. The perpetrators are trying to take the equity you have built up in your home right out from under you."

Freedom Financial Network, LLC (www.freedomdebt.net) provides consumer debt resolution services through its FreedomDebt.com, Freedom Foreclosure Relief and Freedom Tax Relief divisions. Working directly for the consumer , the company negotiates directly with creditors, and offers an alternative to bankruptcy, credit counseling, and debt consolidation. B ased in San Mateo, Calif., Freedom Financial Network serves more than 3,000 clients nationwide and manages more than $100 million in consumer debt.

United States Organizations for Bankruptcy Alternatives Elects San Mateo Exec to Board
--Freedom Financial Network Co-CEO Works to Educate Public on Debt Resolution Alternative --

SAN MATEO, Calif., June 2005 - The United States Organizations for Bankruptcy Alternatives (USOBA) has elected Andrew Housser, co-CEO of Freedom Financial Network in San Mateo, to its board of directors.

USOBA is an independent trade organization that works to protect consumers through bankruptcy alterative education. Headquartered in Washington, D.C., it is the only debt negotiation trade organization that does not commingle its message with other financial services.

As a founder and executive of San Mateo-based Freedom Financial Network, Housser leads a USOBA member firm whose services offer a solid, ethical alternative to bankruptcy. Working directly for the consumer , the company negotiates directly with creditors, and offers an alternative to bankruptcy, credit counseling, and debt consolidation.

Housser's term, effective immediately, will include service on the USOBA's creditor relations committee. His election took place at the organization's recent spring conference in New Orleans.

Housser's election "demonstrates Freedom Financial's commitment to its clients and to the industry," says Brad Stroh, co-CEO of the firm. "As a board member, Andrew will work to improve the public's understanding of the benefits of debt negotiation as an alternative to bankruptcy." In addition, Stroh expects Housser will be instrumental in developing the ethical standards by which USOBA members must operate.

USOBA (www.usoba.org) is an independent trade organization that works to protect consumers through bankruptcy alterative education, and supports legislation that fairly regulates the debt negotiation industry. Headquartered in Washington, D.C., it is the only debt negotiation trade organization that does not commingle its message with other financial services. With record levels of consumers filing for bankruptcy, the credit counseling industry under fire from the Internal Revenue Service, Federal Trade Commission, U.S. Congress, consumer advocates, and state legislatures, USOBA members are the last line of help before going bankrupt.

Report says county is 'financially fit': Expert calls study 'absurd'

By GWEN MICKELSON
Sentinel staff writer

SANTA CRUZ - A financial education nonprofit ranks the Santa Cruz-Watsonville metropolitan area 10th best in the nation in personal "financial fitness" among cities of its size, but at least one local financial adviser called the study "absurd."

The report, released Tuesday by the InCharge Institute of Orlando, Fla., at the Conference of Mayors' meeting in Washington, D.C., ranks 314 metropolitan areas, using five factors to assess "financial fitness" based on 2003 data:

• Real personal disposable income.
• Employment opportunities.
• Credit worthiness.
• Level of savings.
• Refinancing activity, which the report calls "near liquid financial reserves."

It appears the value of the area's real estate and low mortgage rates, which fueled a refinancing boom in recent years, pushed the area to the top of the list.

But is that a true measure of financial fitness when half the population spends half its income - the median family makes $75,300 - on housing costs?

According to the 2004 Santa Cruz County Community Assessment Report, 27.5 percent of those surveyed said they thought they were financially better off in 2003 than in 2002. That percentage has decreased steadily since its peak of 60.5 in 1999.

"Saying refinancing activity is a near liquid financial reserve and putting it on the balance sheet - if I did that, I'd be put in jail," said Capitola investment adviser Caleb Lawrence. "Saying people can burn the equity in their homes and consider that a reflection of financial empowerment is absurd in the extreme."

Lawrence also objected to refinancing figures estimated from 2002 data, saying they did not reflect actual 2003 numbers.

The analysis concluded that the financial wellness of the average consumer in a metropolitan area was most strongly related to the combined effect of employment opportunity and credit worthiness.

Income and bank deposits reflected a second factor that the report said "seems connected with financial empowerment." Refinancing activity, the report said, "pointed to the importance of a third factor associated with the desire and ability to tap into near liquid financial reserves."

Among about 100 metro areas with populations of 200,000-500,000, Santa Cruz-Watsonville ranked:

• 15th in "credit worthiness and employment opportunity."
• 76th in "financial empowerment."
• 2nd in "availability of near liquid reserves."
• 10th overall.

But Lawrence points to recent employment figures in Santa Clara County, where many Santa Cruz County residents commute for higher-paying jobs, as an indicator that the data is misleading.

In December 2000, the labor force in Santa Clara County numbered slightly over 1 million, and the unemployment rate was 1.3 percent. In December 2003, the labor force numbered 876,600, and the unemployment rate was 6.6 percent.

"Employment being way down and refinancing way up signals that people are taking money out of their homes and living on it," said Lawrence.

Much of the recent refinancing activity was simply done because housing values went up so much, said Harry Domash, an Aptos online investment teaches who publishes an investing newsletter. The median price of a single-family home in Santa Cruz County rose to $650,000 in December and, according to the California Association of Realtors, only 18 percent of households in the county are able to afford a median-priced home.

Analysis of what people were doing with any refinance cash was not part of the study, said Trish Wexler, a Virginia-based spokeswoman for InCharge Institute.

"From a financially fit standpoint, we're looking at what kind of money do these people have at their fingertips - if they hit a credit problem, if they were hit with a medical emergency that required them to go into debt, do they have a fallback position," said Wexler.

The national level of refinancing activity rose from about $50 billion in 2000 to over $200 billion in 2003, said Brad Stroh, co-chief executive officer of San Mateo-based FreedomDebt.com, a consumer debt resolution service.

"Nationally, consumer debt continues to rise even in the face of this record refinancing. If you were paying off your debt with the refinance, that number would be going down, which signals that people are using it for consumption rather than savings or equity appreciation," he said.

• Santa Rosa ranked No. 8 in the 200,000-500,000 population areas.
• San Jose ranked No. 7 among the over-500,000 population areas.
• San Francisco No. 2 among the over-500,000 population areas.

• Wilmington-Newark, Del.-Md., in the over-500,000 population category.
• Trenton, N.J., in the 200,000-500,000 category.
• Bloomington-Normal, Ill., in the less than 200,000 category.

Foreclosures

What to Do if It Happens to You
By Megan L. Fowler, MSJ

Foreclosure is one of those "it'll never happen to me" phrases, but poor financial planning and living beyond your means, as more and more couples are doing, can lead to foreclosure before you know it.

For most, your home is your single largest investment. It's where your children are learning to walk, where you carry on your family's holiday traditions and a place where you've invested a hefty amount of money.

Fortunately for homeowners and buyers, interest rates have remained at an all-time low and refinancing has offered new beginnings for those whose mortgage payments were becoming almost too much to handle. However, despite a favorable interest environment, there are still those who find themselves in an unavoidable foreclosure situation.

"There is a stigma placed on foreclosures," says Sandy Cutts, spokesperson for Fannie Mae, a government agency that works to make homeownership attainable. "It is not in the best interest [of the lender] to swoop down like a vulture and repossess the property. It costs a lot of money to cultivate a borrower, and the lender will [usually do everything to] help the [homeowner] work it out if possible." There are steps you can take and solutions available, she adds. "I always advise people that at the first sign of financial trouble, contact your [bank]. Be forthright and honest."

If you find yourself in a difficult financial situation and realize you can no longer afford your home, there are options available. If the thought of foreclosure has crossed your mind, read on. We've spoken to several industry experts on the dos and don'ts of home ownership, financial readiness and how to deal with the emotional stress your entire family faces when losing your home becomes a reality.

If foreclosure actions have already begun and there is no hope of keeping your home, Andrew Housser, co-CEO of Freedom Financial Network , LLC in San Mateo, Calif., a company that provides comprehensive consumer debt resolution services, offers two action steps you should initially take:

Dealing With the Stress of Losing Your Home
Foreclosure is not a situation to be taken lightly, and hiding it from your spouse or family members is not a good idea. "Often I work with couples where one spouse handles all the money and the other really has nothing to do with it," says Doug Charney, president of The Charney Investment Group in Harrisburg, Penn. "That is not a good way to go." You end up with one spouse that has no clue of what's going on and the other is hiding it or afraid to discuss it with their partner, he says. All of a sudden there is a problem and that will cause trouble.

"Once it has come to the fact that you can't afford to be in the home, it is better to get it over with right away and do it in a way that won't impact your credit report as much," says Housser. "In the long term it is going to be for the best to get you into a home you can afford for the next 30 years." You can actually avoid foreclosure if you give your house back to the lender, or sell it yourself.

"Take comfort in knowing the lender does not want to take your home," says Megan Smith, with First Lenders Data, Inc., an Austin, Texas-based provider of settlement service solutions to the mortgage lending industry. "Your lender is not the enemy." Let them know of your stress level and let them know you are willing to work it out at all costs, she continues. It is better to deal with it before it snowballs.

Here are some tips from Smith on ways to lower your stress in times of financial hardship:

The most important thing homeowners should know is when you get a missed payment notice from your lender it is not the end, says Housser. "Every state has different laws, and you have time and you have options." This should not, however, cause a sense of complacency. The sky is not falling but there are steps you can take to make sure you start things right away.

The following are options offered by Housser you can consider if you are falling behind on your mortgage payments and want to avoid foreclosure proceedings:

"If you are looking for assistance in negotiating a forbearance, deed in lieu or loan modification with your lender, contact a reputable foreclosure assistance organization that has a good rating with the BBB," Housser says. "If a solution is possible, a good foreclosure assistance organization will be able to use its foreclosure expertise and relationships with lenders to come up with a solution that works for both you and your lender."

Financial Tips, How to Avoid Foreclosure From the Get Go When considering the purchase of a home, make sure you have sufficient funds to qualify for a good loan and have three to six months' worth of mortgage payments in the bank. "Do a good budgeting exercise up front, watch out for adjustable rate mortgages and leave yourself some breathing room," says Charney. And take a good look at your lifestyle to make sure you aren't living beyond your means.

Your first house shouldn't be your dream house; it should be a starter house, he adds. "You will own three to four homes in your life and each one should be a step up from the one before," he says. "It should be in an area that you think will go up in value, and you should plan on staying there for five years." Ask yourself if you really need top appliances, or to put in a pool. "Stop spending on things that are not a necessity and get back to a budget."

After foreclosure it is important to look at your credit report and credit score, says Smith. While a foreclosure will certainly hurt your credit, there are ways to improve it over time. Here are some ways Smith says you can rebuild your credit:

Manage your current credit accounts and keep your balances at comfortable limits. If you are "maxed" out on every credit card this reflects poorly on your credit management skills. You are more than likely over extended and at a higher risk to miss a payment.

Be aware of your credit history and notify the credit agency if something is incorrect.

Consider opening new accounts and paying them off on time to show creditors your ability to manage your credit. Only positive credit management and time can improve your score after a foreclosure, but it can be done.

If you are having trouble making your mortgage payment, Fannie Mae has several programs available to assist you at www.fanniemae.com .

About the Author: Megan L. Fowler is a freelance business journalist living in Fairbanks, Alaska. She frequently covers national real estate trends and financial planning issues.

Last-minute shoppers run risk of overspending
Tuesday, February 8, 2005
Last modified Friday, December 17, 2004 12:08 AM PST

With only 10 days left until Christmas, time is running out for those who haven't yet purchased gifts for the never-ending list of friends, co-workers, neighbors and, last but not least, family.

"People are beginning to panic," said Carmela Vignocchi of the nonprofit Consumer Credit Counseling Service (CCCS), who added that it's not too late to take some steps to prevent a major financial crisis.

"Our biggest suggestion still is to go with a list and know what you can afford - and to use cash, not credit," she said. "Because what will happen in January and February is those bills will come in and it will be more than they can afford."

CCCS is just one of several agencies dedicated to helping consumers avoid debt or get out of it if they're in it already. Vignocchi is based in CCCS's San Luis Obispo office and serves as director of community relations.

Bay Area-based Freedom Financial Network offers five tips to minimize holiday debt: Set an overall spending budget; make a list of gifts and stick to it; set a limit for each gift or person on the list; start early to avoid the last-minute rush; and stop spending when you've reached your limit.

Avoiding the last-minute rush may be a moot point at this late date, but the others should still be attainable.

Smartmoney.com offers a worksheet specifically for the holidays that allows consumers to create a budget for various kinds of expenses and track their spending as they go. It is designed to include often-forgotten costs such as wrapping paper and holiday travel. It is essential to keep in mind those related expenditures, Vignocchi said.

"During the holidays we like to eat special holiday foods, so don't forget to add that onto your list," Vignocchi said. "And don't forget the added costs of wrapping and shipping. Remember, all the normal expenses like bills that still need to be paid."

Holiday spending for 2004 is expected to be slightly better than last year's, according to a variety of surveys and estimates.

The National Retail Federation (NRF) expects spending in November and December to be around $219.9 billion, or 4.5 percent higher than last year, including most online sales.

"Consumers are still in the game, with many splurging on high-end merchandise," said NRF Chief Economist Rosalind Wells in a press release. "November sales are an indicator that the holiday season is off to a good start."

Online sales are expected to increase at least 23 percent over last year, according to comScore Networks. The consulting company expects non-travel Internet retail sales during November and December to reach at least $15 billion, up about $3 billion from last year.

Locally, some businesses are seeing an increase in sales. Bacahl Lawrence, manager of Eileens Treasures' Gifts for Less, said holiday spending has been up over last year. Eileens has been in business at 859 Oak Park Blvd. in Pismo Beach for seven years.

"Sales are a lot higher for us than last year's Christmas," Lawrence said. "Every year they've increased, but this year people started earlier, so sales went up earlier."

Vignocchi agrees that local stores deserve a good chunk of local residents' business, but she cautions against carelessness.

"It makes sense to spend your dollars in local businesses," she said. "But it's important for people not to get into that overspending."

Dec. 17, 2004

The San Mateo tool salesman, 51, was like many Americans who overextend themselves during the holidays and are slammed with credit card hangover when the season's over.

"There was nothing I couldn't afford - I had tons of plastic," quipped Gretsch. "So it's possible to go out last-minute and get something thoughtless and overpriced and insincere and very expensive."

"The thought behind it always seemed to be, 'It's only a few dollars a month more, and what's a few dollars when I can be a hero,' " he said.

Gretsch spent himself into a more than $40,000 credit card hole that caused him to declare bankruptcy in 1992. But between 1998 and 2002, he once again built up $32,000 in credit card debt.
"This time I just went, 'No. Whatever it takes, it takes, and I'm willing to do it,' " said Gretsch, who sought help from the nonprofit Consumer Credit Counseling Service based in Camarillo, which has an office in San Jose.

During the 2003 holiday shopping season, Americans racked up more than $115 billion in retail spending on credit and debit cards, according to Cardweb.com, a payment card information network. During the second quarter of 2004, about 4 percent of credit card accounts were delinquent - nearly 50 million of the 1.2 billion cards in circulation.
About 1.6 million Americans declared bankruptcy last year, according to Brad Strohe, co-chief executive officer of San Mateo-based FreedomDebt.com, a consumer debt resolution service. "I think a big catalyst for problems ends up with the holiday season," Strohe said. "Culturally and combined with all the marketing, people throw caution to the wind and have less personal guilt about spending because it's not on themselves."
Strohe said the primary problem is lack of budgeting.
"So our recommendation is to set a limit for a maximum amount you're going to spend, without regard for how many presents, who you're buying for and for what purpose," Strohe said. 'Then make a list for the people you need to shop for and allocate how you're going to spend your original budget."

Shoppers getting some holiday buying done in downtown Santa Cruz in early December appeared to be managing their money more or less carefully around the holiday season. They all said they didn't make a holiday budget, but they had decided what they would spend on each gift recipient before they went shopping. Many allowed the actual amount they spent to be flexible, regardless of their predetermined target.

"You feel special when you have something new, and you feel good when you give something nice to someone," said Verona Ross of Menlo Park, an information technology manager at Seagate Technology in Scotts Valley.

"During the holiday season, people throw caution to the wind and have less personal guilt about spending because it's not on themselves. Our recommendation is to set a limit for a maximum amount you're going to spend without regard to who you're buying for, and for what purpose. Then make a list for the people you need to shop for and stay within the budget."

Last holiday season, Americans shelled out an average of $700 per household for gifts. And with plastic - credit, debit, or pre-paid cards - now used for more than 50 percent of store purchases, it's no surprise that revolving consumer debt is now more than $740 billion.

California-based Freedom Financial Network , LLC, a national consumer debt resolution service, helps people get out of debt, which means they know something about how people get into debt trouble. Here are Freedom Financial Network 's top five ways to avoid holiday debt problems this season:

1. Set limits - Ideally, you'll have saved for the holidays throughout the year - even $25 a month helps. If not, look at your monthly budget and figure out how much you can afford to set aside towards holiday gift giving without going into debt. Your intentions may be good, but the reality is that most people have a depressing amount of credit card debt after the holidays and are not able to pay it off in as timely a manner as planned.

2. Make a list - Make like Santa and list all your holiday expenses. Include small gifts to teachers, babysitters, newspaper carriers, etc., which can add up quickly. Don't forget extras you may have, such as cards, food and beverages for entertaining, and holiday clothing purchases.

3. Put a value on it - Set a spending limit for each person and each item on your list. Don't be pressured to overspend based on what you think others expect - That's often when credit card debt begins to mount. If your list looks skimpy, fill in with homemade gifts or offers to help the recipient, such as babysitting, yard work, home-cooked meals, or help putting away holiday decorations.

4. Start early - Really smart shoppers stock up gifts throughout the year. If you haven't done that, do yourself a favor and avoid the last-minute rush. In doing so, you'll have time to comparison shop. You'll spend more - and use the credit card

You can still show you care - on a budget
Friday, December 10, 2004

By Janis Mara,
BUSINESS WRITER

AS THE HOLIDAYS approached this year, Sarah Hawkins and her fiancee Seth Heller found themselves in a tight financial squeeze. The two are saving for their May wedding and paying off student loan debt as well.

Strapped for cash, and not wanting to run up huge credit card bills, they came up with a holiday gift plan that expresses their feelings for friends and family, but totals only $400.

"We are going to have small get-togethers with groups of friends to spend time together rather than money on gifts," said Hawkins, a Bay Area resident. "We're giving presents to family only."

Hawkins' budget ceiling is probably too low for most - the average consumer plans to drop more than $700 by the time Christmas arrives, according to the National Retail Federation. More than $100 billion is spent on shopping between the day after Thanksgiving and Christmas Day, according to CardWeb.com.

And this time of year is when people are most apt to land themselves in overwhelming credit card debt that may well dog them for the rest of the year - or longer.

But it doesn't have to happen to you, as Hawkins' suggestions indicate. Her approach is totally in line with the recommendations of San Mateo-based Freedom Financial Network.

"Setting limits is the most important thing you can do," said Brad Stroh, co-CEO of the consumer debt counseling company. "Decide on a pre-set dollar amount for how much you want to spend overall and work backward from that, deciding how much you want to spend for each person."

If credit cards are your downfall, put the amount allocated for each person in an envelope in cash and leave your credit cards at home.

"That way, there's a physical barrier to overspending. When the money is gone, you have to stop," Stroh said. Also, the credit maven noted, people are much less likely to overspend when they're using money as opposed to credit cards.

It's best to avoid using credit cards, but if you must, use the cards with the lowest rates, according to John Oldshue of www.BillSaver.com . Store cards and credit have the highest interest rates, Oldshue said, so if you don't pay the bill as soon as you get it, it's not worth the purchase discount you get for signing up for the card.

"These are people who mean a lot to you, and we're all so busy we don't spend time with them," Stroh said. "Instead of spending money, do something heartfelt and shared. A dinner, a date, a movie, just go for a walk or write them a nice note or something sentimental."

Hawkins isn't the only Bay Area resident who substitutes time and attention for big-ticket gifts.

"We put most of the fun in stockings and have at most one big thing for each person," said Caitlin Burke of San Francisco. "Family members with limited cash are encouraged to make commitments like babysitting or cooking meals."

"If you're pressed for time and can't go from store to store hunting the lowest prices, do it online," Stroh advised. You can compare prices on a wide range of products at MySimon.com and Yahoo Shopping. Also, Wal-Mart, Target, Sears, Macy's, Kohl's and other national chains have Web sites where you can price gifts online.

"Our family tries to keep shopping and costs in hand by putting the names of all adults into a hat, choosing one, and buying a
gift only for that person," said Jeanne Lese. "We set the limit between $50 and $75."

"For those who must have something new, you can usually find something that's still in its box," said Trina Bobbins. "But even better are 'vintage' and 'antique' items, which are just fancy words for cool used stuff."

Kristin Roth scored big (and saved big) using the personal touch with her gifts.

"Last year was a lean winter for me. I dealt with this by making my own gifts, and I got some of the most ecstatic reactions I've ever received in all my gift-giving years," Roth said. "I learned the basic knit-stitch, which is surprisingly easy to learn, and pumped out some truly gorgeous scarves. I was able to make several in one week."

Roth also baked cookies for some of the folks on her list (brownies are another ever-popular holiday offering).

"For the best budgetary shopping moves, I recommend starting right after Christmas at the holiday sales," said Frances Gentile of Piedmont. "Prices are hugely slashed. Buy ornaments, wrapping, boxes and bags. Because you have purchased gorgeous velvet boxes and golden bows, even the smallest gift you wrap will seem precious."

Stroh agreed that smart shoppers stock up gifts throughout the year. But as long as you start before Dec. 24, it's not too late, he said.

"Just get online, compare some prices if it's a big purchase and make sure you're buying smart."

"People feel spending reflects the value a loved one has to them," Stroh said. "'You mean a lot to me, I want to show you how much you mean to me and so I will spend a lot on you as an individual.' But you could just tell them that."