Debt Settlement with Leslie Tayne
At the Financial Gym, clients of all financial shapes and sizes come to us to work on the areas of their finances they would like to tone up. Some want to get more education on investing, some want to learn more about budgeting, some want to figure out their student loans, and many want to understand the options they have to resolve the debt that they’ve accumulated.
Resolving debts is exactly the specialty of today’s guest, Leslie H. Tayne, author, attorney and award winning founder and director of the Tayne Law Group. Leslie joins me today to answer debt resolution questions from bankruptcy, to debt settlement companies, and everything in between. If you or someone you know is wondering about fixing up your debts, this is a conversation you will not want to miss.
What Are We Drinking?
Leslie — Special Martini (Titos with muddled mint and a splash of pineapple juice)
Shannon — Caramel Vodka Martini (Smirnoff Kissed Caramel Vodka over ice)
Podcast Notes
Leslie is from Long Island, which is an Island off New York, and it’s where Shannon grew up. Shannon has fond memories of the island. It is not tropical, it is just a suburb of New York.
Leslie has been an attorney for over 20 years and it was her destiny. There wasn’t any other option for her. However, she could never have imagined where she would be today and the work that she has done.
When she went to law school, she thought she was going to go more into public law, because she had a lot of interest in it.
She graduated with student loan debt, not from college but from law school. Leslie took out $65,000 for law school, where today it is difficult to get out of law school with less than $100,000 in loans.
When she was just starting out her law career, Leslie was married and had a baby, and she wasn’t making very much money.
She thought her ex-husband was taking care of the payments for her student loans, but he wasn’t and the loans went into default.
Leslie got divorced when her twins were five years old and her oldest child was seven. From that point on, she focused on building a practice, which helps people with debt and financial issues.
One day, Leslie’s accountant told her she had enough money to pay off her student loans. She felt like she won the lottery, because she thought she would be paying for the debt forever.
A lot of this is in her book, Life and Debt: A Fresh Approach to Achieving Financial Wellness.
She found out that her loans were in default, because she received letters, phone calls, and she was sued by a private student loan servicer.
The federal loans were being paid off or they were in deferment, but the private student loans didn’t offer anything, except for her to make impossible payments. She was able to negotiate those and pay them off.
The federal student loans were $923.31 per month. It was a lot of money and a lot of stress, but eventually her credit score started to rise.
When you are young, you are not supposed to have any money and it is not uncommon to be in debt. This perspective makes all the difference when you are looking at your financial circumstances and when you are trying not to be too hard on yourself for having the debt.
This debt is a reality for 65 percent of the population and it shouldn’t define you. There is so much shame around this debt, but it is nearly impossible to get through college without it.
The education system has flaws, but it is supply and demand - there is a tremendous demand to go to certain schools. When you are young, it is normal to be paying down debt. It is all about how you look at it.
Leslie knew it was going to take time to pay her loans off. It hindered her ability to travel, save for retirement, etc., but it gave her a career, a life, an income, and a future. She doesn’t look at it like the worst thing that happened to her.
Leslie currently has five children in college, three of her own and two of her husband’s. You have to make smart decisions as you are going through the process, because you will need to deal with it in the future. To say it is everybody’s fault that you got into this debt is a very negative thought process. Think about it in a positive way, that it is giving you huge future and opportunities and there is a cost, there is a cost in any investment. You need to pay something to get something out of it.
Leslie doesn’t regret paying double for her student loan, because she is thankful for her life now. She is in a position where she can pay for her children's education.
When Leslie went to law school, the only thing that existed was bankruptcy attorneys. You cannot set a focus when you are in law school, there is a set of classes you must take in order to take the bar exam. As you do internships and work in different places, those are opportunities.
Leslie had a baby and was working in a position she didn’t love. She wanted to spend more time with her daughter, so she took a part-time, in-house counsel position that turned very quickly in to a full-time position with a tremendous amount of hours and commitment for a national debt settlement company. This opened the door for her to do this on her own.
She felt like this service was missing in the industry. There are so many legalities involved in resolving basic debt and there is a real need for that. She was able to focus on her mission and her goals, which was to provide a service that was non-existent and had trust as the underlying foundation, and to build a reputation of reliability and success with other colleagues who regularly send her clients.
Debt consolidation companies are good, and debt settlement is really good because it works. What doesn’t work is unscrupulous companies and individuals that take advantage of consumers. It creates an opportunity for the press and the Attorney General to step in and say you cannot take advantage of people.
When you are going through a difficult financial time, your mind is totally twisted. You are emotionally distraught, you are probably fighting with your significant other, you don’t know what you are going to do to rob Peter to pay Paul. When these companies have a solution to save the day, the problem is when they don’t tell you the middle part, they disappear, or they charge a fee upfront.
When Leslie first became an attorney, there were no laws or regulations related to debt settlement or debt consolidation, but this has now changed.
Leslie’s law practice concentrates mostly on debt consolidation. It is a broad term that encompasses debt repayment, debt settlement, and debt restructuring. It works really well when you have the right people who understand your personal financial circumstances and know that you need more than a one-size-fits-all solution.
If something happens in the meantime, like a loss of a job, tax issues, other financial issues, etc., you won’t be left out there to fend for yourself.
Debt consolidation generally means you are looking at consolidating all of your debt into one loan, so you pay one creditor for one loan. This generally doesn’t work because it doesn’t resolve the underlying issue, which is cash flow. If the payment is similar, you are going to end up with more credit card debt. When you are still paying interest, you still won’t be able to pay it off in a few years.
Although she is licensed for it, Leslie doesn’t practice bankruptcy in her office. If you can’t put food on the table, you are a bankruptcy candidate. If you have cash flow, an income, the ability to make a payment, and sit with someone who can look at your finances and your budget and how you can reduce the debt that is causing the problem, bankruptcy is not necessary.
There are three types of bankruptcy: 7, 11, and 13.
You have to qualify with your income, debt, and assets, including your home. Bankruptcies stay on your credit report for 10 years and you need to disclose them to your insurance companies, potential employers, and other applications, which increases every single interest rate that you have.
If you can find another viable option to avoid bankruptcy, Leslie is all for it. However, there are times when bankruptcy makes sense. A seasoned individual who has your best interest in mind will take a look at your situation and tell you why the option of bankruptcy makes sense or doesn’t make sense and give you alternatives to consider.
There are many bankruptcy attorneys that advertise under debt settlement or consolidation, but they are really bankruptcy firms. Make sure you see someone who is not primarily a bankruptcy attorney and offers other alternatives.
If you can avoid filing bankruptcy, avoid it.
There is no incentive for any creditor to resolve your debt, if you are making current, on-time payments. Reducing the interest isn’t going to solve the problem.
If you are behind on your debts, it is a lot to manage those creditors that bombard you with phone calls. Leslie can control it, because she knows when each creditor will be willing to resolve your account, by how much, and at what terms, based on your financial circumstances, but you as an individual don’t know that. They will tell you all kinds of things that are inaccurate, and Leslie knows what those things are.
In 2009, you could offer pennies on the dollar to resolve debt. Now, creditors can use creditor friendly laws that allow them options to come after you. There are a lot of nuances.
Certain creditors will not resolve debt below 75 percent, even if you have stage four cancer. Some creditors don’t care and will allow the debt to die with you.
Creditors have been burned so many times by debtors who say things that are false or don’t follow through, and they really take what a debtor has to say as true and accurate. They aren’t going to give you the benefit of the doubt and work with you to get numbers that are low.
Leslie does this everyday and she has relationships with these creditors. Whatever resolution happens, it will be a legal agreement.
You can’t go in with demands to your creditor and think that you are going to get your way and it will all be great. There is a realistic perspective to take and Leslie tries to manage those expectations early on. If you try to do it on your own, it is like changing the oil in your car. We are all smart and capable, but the oil may fall on your face and it will be messy and dirty and you might make a mistake. It might not come out the way you expect.
It is a full time job. There are some creditors Leslie will sit on hold with for two hours, even when they have contacts there. Creditors make mistakes and Leslie’s firm has to go back to make sure they correct them. It is a lot of work. People don’t always see the work that goes into this.
Leslie has clients all over the country. She has been doing this a long time and she has a law degree. You need an in-state attorney if you are being sued, but you can use an attorney in another state for general resolution of accounts. Her firm has partnerships with attorneys if clients need to go to court in other states.
Even if a company is non-profit, it doesn’t mean the people who run the company don’t make an income and drive fancy cars. Not for profit is a tax status and, at the end of the day, they can’t earn a profit, so they pay salaries and expenses. It doesn’t always mean they are out for your best interest.
If you find a non-profit company that has a good reputation and they have been in the industry for a long time, it might be an organization worth pursuing.
You need to define your goals and objectives on what you want to achieve first. Define the problem. Once you figure that out, then you can find the appropriate solution. Don’t only look at what you get in the mail, hear on the radio, or see on TV, because it doesn’t necessarily translate into a company that is looking out for your best interest and meets your goals and objectives. Ask them questions.
The majority of debt settlement companies out there take a percentage of your payment for their fees and they take their fees up front. That is illegal.
Sometimes if you are making payments to the debt settlement company, they may not make the payment to the creditor. That increases your risk of getting sued by your creditor.
Be very selective of who you work with on your finances. Resolving debt is a business, and it is very profitable. With larger companies, whoever you speak to is not resolving your debt, the settlement piece is outsourced, and you never speak to the same person twice. Leslie fixes a lot of the problems from people who come from these places.
Her practice does not take in people who don’t have a willingness to resolve their debt and a willingness to be good listeners. It is a partnership and a relationship that they have for three to five years and it will impact their entire life.
Understand that when you are facing a financial hardship or you are struggling a little bit, the decision to take control of that and move forward so you can have a different kind of future, there are ramifications, but they are worth it.
Sometimes this is the best thing that can happen to you, because it really changes your thought process and can inspire you to do things very differently that can put you in a different place.
As an adult, the likelihood is that you are going to have a financial hurdle you need to get over and it is all about finding the right people who understand you and can make it happen for you.
It’s not about what you did, it is about making the decision to help yourself. Don’t be ashamed that you have debt.
People might look beautiful on social media, but their bank account may be ugly.
Debt happens. It doesn’t discriminate. Where you can change the game is dealing with it.
TAKEAWAY: My biggest takeaway is that debt resolution is not an overnight process. It’s quick to get into debt, but frequently takes months or years to get out of it, so make sure that you find a path and solution that feels best to you with people that you trust to help you along the way.
Random Three Questions
What is a show you like to binge watch?
Do you travel, and, if so, what is your favorite vacation?
If this was your last night on earth, what is your last meal?
Connect with Leslie
Website: www.taynelaw.com
Phone: 866-890-7337
Twitter:@lesliehtayneesq
LinkedIn: Leslie Tayne
Twitter/Facebook/Instagram: @taynelawgroup
If you’d like to talk to my team at the Financial Gym to help you work through any of your financial challenges, including debt, I hope you’ll reach out to us at the Financial Gym. We have truly seen it all at the Gym and my trainers can’t wait to help you achieve the financial success you’d like to achieve. The great news is that Martinis and Your Money listeners get 15% off Financial Gym services. So head over to, or send friends to, financialgym.com to get signed up today.