By his own admission, Bruce Cerling is a tightwad. When he retired, fellow employees gave him a plaque with an embossed dime and the notation:
”The first dime he ever earned.”
As a kid in grammar school in Hinsdale during World War II, Cerling spent every quarter he got buying war savings stamps. In high school he raised chickens and saved enough money to pay his own way through the University of Illinois. ”I have never financed a car in my life,” he said. ”I refuse to pay someone interest.”
Who better, then, to counsel people who have gotten themselves deep in debt? People whose wages are being garnisheed? People who are being hounded day and night by creditors?
With time on his hands after his retirement and with a desire to help people, Cerling, 62, volunteered a year ago to work with Catholic Charities of Lake County in a fledgling program: consumer credit counseling.
”About 10 years ago I became aware that a lot of people coming to us for assistance had poor money-management skills,” said Vara Aiyappa, director of community casework for Catholic Charities in Lake County. ”We began to assist them with basic budgeting, showing them how to better use their food dollars, for example. Then we began seeing more and more middle-class people who were getting into trouble with credit. In our society, people have not been taught how to manage their money, and mismanagement causes a lot of stress and mental health problems. In 1988 we decided to join the National Foundation of Consumer Credit.”
Affiliation with the foundation gave Catholic Charities more credibility when interceding with creditors for clients and allowed them to set up a structured program and train staff members and volunteers. The program has grown from one part-time staff person to two full-time staffers and several volunteers. Cerling, the first and for a long time the only volunteer, gives two four-hour days each week to the program.
Catholic Charities says it is the only agency in Lake County with a full- service program of budget counseling and debt management. The organization also offers education programs and seminars on money management for schools and community groups. Debt management is a last-ditch effort on behalf of those people so deeply in debt that they have no idea how to get out. Catholic Charities works out a budget with them, actually collects a lump sum from them each month and after contacting creditors to work out an agreement, pays the clients` past-due bills, at the same time monitoring their current spending.
Clients are charged $10 for the assessment, and people in debt management pay a small percentage of their income for the service. Low-income families and single parents often are not charged. Pay-up of old debts usually is geared to a three-year period, Aiyappa said.
Nothing is done without the client`s full input, Cerling said. Different people have different priorities, and they must decide what to cut and what to keep. ”One man decided he had to cut his church contribution in order to balance his budget,” Cerling said.
Staff members Charlene Foster and Barbara Medel or Cerling spend about two hours with each new client, helping them fill out a detailed application and trying to determine where their money is going and how they got into trouble. ”Greed is what gets many of them in trouble,” Cerling said. ”And one of the worst things that has happened is home-equity financing.”
The accessibility of credit cards and the fact that some people use them for daily living accounts for much of the trouble, Aiyappa said.
Typical are a couple currently in debt management whom we`ll call Marsha and Dave. Both college graduates, they have been married three years and have no children. Their joint income is about $50,000. They entered the program two years ago with 18 credit cards and a debt of $20,000, not counting their cars. ”We realized it was getting out of hand, but everywhere we went merchants were almost forcing credit on us. It was just so easy,” Marsha said.
After being referred to Catholic Charities by a creditor, Marsha said, it was depressing to admit that at ages 26 and 28, respectively, she and her husband were already failures. ”I have learned since then to reach out and ask for help. There are people out there who are a lot smarter than we are on some issues.”
Marsha praised the counseling she and her husband have received for opening their eyes to extravagances they had never realized, such as expensive gifts for family members, which at the end of the year totaled thousands of dollars. She also said that halfway into the debt-management program they incurred an unexpected medical expense, and Catholic Charities stepped in and mediated payment, then told them about ways to save for emergencies through payroll deduction plans.
”This has changed our lives,” she said. ”In six months we will be debt free, and do you believe some of our creditors who are already paid up are now offering us new credit cards?”
Many of the people Catholic Charities sees have gotten into debt after some change in their life-a new baby, a move, loss of a job, Foster said. ”We always require that both the husband and wife come in even though in some cases one spouse will have incurred all the debt and wants to keep it hidden from the other.”
”During the assessment, some couples argue about things like who spent all the money on tapes,” Cerling said. Handling the interview takes diplomacy and patience. Following up with people who decide to manage their own budget is also necessary, he added. ”It`s important to pep them up and congratulate them. People need a lot of massaging.”
Another traumatic moment for those who finally end up in debt management is the day they are required to bring their credit cards in to have Catholic Charities personnel cut them up before their eyes.
Cerling said he tries to interject his philosophy of money management into the initial session but does not want anyone to feel put down. ”Many of these people are trying very hard,” he said, relating the story of one serviceman in debt management who continued to send his monthly payments even after he was transferred from the Great Lakes Naval Training Center to the Persian Gulf.
Cerling also worked recently with a woman with several children. Her husband had walked out, and she is honestly trying to pay up debts incurred by him, Cerling said. ”She doesn`t understand how to deal with the creditors who are calling her at all hours, and what we can do is get them off her back.”
National statistics show that 7 million Americans owe more than they can pay, Aiyappa said. Nationally, each credit card user has an average of nine cards. This recession, she added, has caused more personal bankruptcies than the 1981 recession. There are fewer working hours, less medical coverage and consequently more people using credit cards for daily living.
”Locally, Catholic Charities (offices in Waukegan, Round Lake and Highland Park) is seeing mostly middle- to upper-middle-class families with an average of 10 creditors. Income levels of clients range from $10,000 to $100,000,” Aiyappa said.
”People ask why we take people in the $100,000 range,” Aiyappa said.
”They are often hurting as much as the lower-income family, and their fees help us provide services for those who can pay nothing.”
Foster, who has a master`s degree in home economics, and Medel, with a master`s in child development, do the nitty-gritty educational work after acceptance of a client. ”Anyone can learn to cut their spending by 10 percent,” Foster said, ticking off a list of ways. ”Shop (for groceries)
once a month from a prepared list and without children. Do without air conditioniong, and turn the heat down. The worst offender as far as utilities is probably the phone. If you`ve got teenagers, take it with you when you leave the house, if necessary.”
”By his help, Bruce Cerling has enabled the program to grow to the point where we now have about 60 families in debt management,” Aiyappa said. ”His business background is helpful, and he brings an outside viewpoint.”
Cerling, who retired as a vice president in the building department of the Chicago Tribune, was not shy about acknowledging that he is extremely efficient and is teaching the Catholic Charities staff some management techniques. ”People in social work do not have the same drive, the same time factor that people in business have,” he said. ”I have helped them set up tighter schedules, and we have started calling people a day ahead of their appointments to remind them like dentists do. I`d go down there ready to work, and too many people were failing to show up for appointments.”
Foster and Medel are so good-hearted and concerned about the good of the client, he said, that they will go to the office at all hours of the night to accommodate them. ”Then when they don`t show, it`s terrible.”
Cerling said that besides doing assessments, he handles nuts-and-bolts matters that other people don`t want to bother with, such as computer input and calls to creditors. ”There is a tremendous amount of paperwork,” Aiyappa said. ”And we are getting four to five new calls a day. People are being referred to us by employers and by creditors.”
While national companies recognize Catholic Charities` affiliation with the national foundation and understand the program, it takes a lot of talking with smaller creditors to get them to agree to debt management, Foster said.
”And collection agencies are the most difficult to work with.”
James Irvine, national collections manager for Sears, Roebuck and Co., said his firm has been involved with consumer credit counseling programs for more than 20 years, and they are very effective in helping people maintain their credit rating instead of having to file bankruptcy. ”You know the counselors are going to build a plan for the client, and when it`s organized like that the customer is more likely to pay. It is very difficult for a person to do it on his own because some creditors won`t cooperate, and then it doesn`t work.”
Cerling also serves on the program`s advisory board and said one of its jobs is getting the word out to the community about the service. ”Most people don`t come to us until they`re really desperate. If we could get them to come in earlier, it would be so much easier to help them. It`s like a miracle when you save someone.”
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For information about the consumer credit counseling program, write Catholic Charities, 1 N. Genesee St., Waukegan, Ill. 60085, or telephone 708-249-3500.
