The Difference: Family Climbs Back From the Financial Brink
November 4, 2014
The Difference is a new, ongoing feature about the impact that credit unions have in their members’ lives. If you have a great story to share, please email James Pearson: email@example.com.
November 4, 2014
A knock echoed through the house. LeAnn Bennett pushed herself out of bed and staggered to the front door. It was the middle of the night.
“I need the keys to your van,” said a man standing in the dark doorway. He wore a tow truck uniform and explained that he had been sent to repossess her family’s van.
LeAnn’s husband Ron came to the door. Looking past the tow truck driver, Ron saw a dry spot on the driveway where the van had been, now darkening in a cold rain.
“My backpack is in the van, and I need it for a test tomorrow,” their daughter said. The Bennetts’ three teenage children had heard the noise and gotten up. They looked scared.
LeAnn knew the man had just towed the van up the street and come back for the keys, and asked if she could get the backpack out. No, the man said, she’d have to call his employer, pay $100, and get the backpack in the morning.
The Stress Within
The Bennetts had excellent credit until about five years ago. Their hometown of Hoquiam, WA is a logging town, and logging is a tumultuous industry. “Mill strikes and mill closures plagued our marriage,” said LeAnn, “like a lot of people in our home town.” Five years ago Ron lost his job, the fourth job loss in 24 years of marriage.
In the past, LeAnn had always coped with financial shocks like unemployment through traditional means, by cutting back expenses and getting a consolidation loan when necessary. But this time was different.
They tried to work with their bank to find a solution, and with other banks. “We’d lived in this town our whole lives,” she said, “we both had great jobs, but our credit was so low no one would even look at us.”
LeAnn juggled bills and expenses and searched high and low for solutions. Sleepless night followed sleepless night as she turned over all the challenges in her head. “When finances spiral out of control and so does the credit rating there isn’t much hope in making things better,” she said.
For all outward appearances, LeAnn’s family still looked great. She and Ron both had good jobs. They had a nice house and two cars. They all had smartphones.
What people couldn’t see from the outside was that their house was going into foreclosure. They only got their van back with help from LeAnn’s parents. And they owed $6,000 to the IRS and $1,400 to a payday loan place. They were behind on their truck payment and all their utility bills, and their electricity was about to be shut off.
Creditors were calling so much that LeAnn stopped picking up the phone.
One time Ron applied for a Cabela’s credit card to buy his son a gift. They were giving away free coffee mugs to everyone who applied. The man at the counter said he couldn’t issue Ron a card, but that he could keep the mug. “It was so embarrassing,” said Ron.
The Bennetts were facing bankruptcy as the option of last resort. “But that’s just not me,” said LeAnn. “Plus, it’s a small town — the newspaper here prints everything.”
A New Horizon
Around this time LeAnn started to notice an ad on the radio. She heard it on her way to work, and in the office, and on her commute home. In the ad a man and a woman talk about their financial struggles, about relying on payday loans and being turned away at big banks.
“This ad was talking about exactly how my life was,” she said. The ad was for Newrizons Federal Credit Union, and ended with the couple sharing how Newrizons helped them find firm financial footing again.
LeAnn had known Terri Fultz, former Newrizons CEO and current Senior Officer, her “whole life.” And LeAnn’s son-in-law’s mother was on the board at Newrizons and had recommended to LeAnn that she go to Newrizons’ new CEO Ynette Gibbs for financial counseling.
“That first session was terrifying,” said Ron. The Bennetts realized that they were putting money towards things that made them happy in the short run, while neglecting the big, important, meaningful things, like their house and cars and electricity.
They had previously been pretty loose with money. If they wanted something they bought it. If they didn’t have the money, they used credit. If Ron worked overtime one month he’d pocket a few hundred of the extra dollars for golf or a trip to the sporting goods store. “Now I get $50 a month,” said Ron. “It’s a big adjustment.”
Newrizons’ financial counseling taught them how to budget, and the credit union made them a consolidation loan.
LeAnn listed the ways that their life was different now compared to when they first set foot in Newrizons in early 2013. “We’ve made our house payment on time for one year and eight months,” she said. “All our bills are on autopay, and all on time. We’re paying ahead on our two auto loans. We’re paying ahead on our consolidation loan from Newrizons. We’re even paying ahead on a consolidation loan at TwinStar that my parents took out for us.”
“We have no more payday loans. We have savings for the first time. Last year the IRS refunded us $7,000. And our credit score has gone from 529 to 701.”
It wasn’t easy, LeAnn said. They had to make sacrifices. The first birthday present she got from Ron after their financial counseling was a receipt from Sears. He had made a payment on their Sears card.
There are other things, too. The smartphones are gone for now, replaced by flip phones. They switched from cash and credit to debit cards, so they can see every transaction. And Ron writes down every purchase he makes to maintain accountability.
But it’s been worth it, they said. “I used to lay awake at night and worry about my finances,” said LeAnn. “Now I sleep like a baby.”
“And I don’t see her crying a lot,” said Ron.
Recently they made their first big purchase since their Newrizons counseling. They bought a new Jeep Cherokee. “In the olden days,” said LeAnn, “we would have gotten the top of the line Grand Cherokee. But instead we paid half the price.”
They approached the purchase thoughtfully, budgeting out what they might have to give up in order to afford the payment. And, Ron laughed, “I was thinking as we were buying it, should we check with Ynette on this so we don’t get in trouble?”
Questions about this story? Contact James Pearson: 206.340.4790, firstname.lastname@example.org.
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