Company Helps Keep Self-respect While Conquering Debt
Associated Press
July, 2000

ROSEVILLE, Minn., July 18 - Tiff Worley was president of a medical laser distribution company when a member of his board of directors got into financial trouble.

'People come to us always overextended and frequently past-due in payments. There's such a high degree of denial in accumulating debt. Folks who find themselves in a financial crisis are usually not good at sorting out the alternatives.' -Tiff Worley

Metropolitan Financial Management

THE SITUATION WAS Worley's introduction to the chaos, stress and loss of self-esteem faced by many people with credit and debt problems as they try to get control of their finances.

Intrigued, Worley posed as a prospective client, visiting several consumer credit counseling agencies. He concluded that people seeking help generally were treated with indifference in an overly expensive, cookie-cutter process without regard for individual circumstances or needs.

"I felt as though I were applying for food stamps," Worley said of his visit to one agency.

The cost also was a deterrent. Most of the credit consolidators Worley visited charged fees based on a percentage of the debt and requiring clients to pay monthly with a cashier's check or money order. There had to be a better way for people to get back on their feet, Worley felt. And he wanted to be part of it.

In 1991, he left his job as president of Felas Lasers to open Metropolitan Financial Management, a not-for-profit company that helps debtors sort through their options and find the best solutions for managing their debt.

The Roseville-based company now does business as Auriton Solutions from 15 offices in 10 states, Alabama, California, Colorado, Illinois, Iowa, Maryland, Minnesota, Nebraska, Nevada and Ohio.

"People come to us always overextended and frequently past-due in payments," Worley said. "There's such a high degree of denial in accumulating debt. Folks who find themselves in a financial crisis are usually not good at sorting out the alternatives."

Clients pay a $25 initiation fee. If the company believes it can help, a counselor is assigned to work with the client at no additional charge.

Auriton covers about 75 percent of its expenses with fees paid by creditors, about 15 percent with client fees and the remaining 10 percent with funds from other sources, including grants and foundations, Worley said. Auriton had 1999 revenues of about $6 million and projects revenues of $8.5 million this year.

One alternative offered by Auriton is a debt repayment program administered by the agency, an option that many other credit counseling agencies also offer. Worley said nearly a fifth of the clients choose this route, paying Auriton, which then pays the creditors.

Auriton negotiates with creditors on terms and conditions of repayment, typically getting creditors to lower payments and interest rates.

"Lower payments don't make sense if the interest rates being charged are high," said Worley, whose counselors try to educate clients about good spending and saving habits as they work out a budget plan.

Clients pay a small processing fee, comparable to what they would spend on postage and handling if they continued to pay their bills directly to creditors.

Some clients make their own payments once a detailed budget management plan is worked out. Others need only budget help. Sometimes clients are referred to mental health professionals for help with chemical dependency, gambling problems or marital problems.

For those who are in way over their heads, counselors offer referrals to reputable bankruptcy attorneys "People who we talk to are really doing their best to avoid bankruptcy," Worley said.

That was the case with Jay Liebenguth, one of the company's clients. Liebenguth, of Omaha, Neb., was deep in debt with his small video production business when he met one of Worley's employees while working on a job. Liebenguth admitted he needed help, saying he had accumulated "tens of thousands of dollars" in debts while trying to finance his business through credit cards.

"I was using credit to pay off credit. It's something that's with you 24 hours a day, seven days a week. It's not only a financial drain, it's an emotional drain," he said.

Liebenguth said of counselors at Auriton, "they were able to reduce my interest rates and the amount of money I was paying every month, yet I was paying it off faster," he said. "I'm down to one credit card now that I pay off every month."

Auriton has served about 35,000 clients since it was founded and has about 16,000 active clients from across the financial spectrum.

"We've got clients on AFDC (Aid to Families with Dependent Children) and we've got people making a quarter million dollars a year," Worle
y said. "There's no income range that is free from debt problems."

Worley said 65 percent of the company's clients pay off all of their creditors or get to a point where they can take over payment of the debt on their own.

While no industrywide figures are available, the credit counseling industry estimates the average success rate of people who seek credit help at 30 percent to 50 percent.

"We don't really feel we're in competition with anybody," said Worley, who also founded the Association of Independent Consumer Credit Counseling Agencies, a national coalition to help consumers with financial difficulties. The association's Web site (www.aicca.org) helps consumers locate credit counselors across the country.

"We work in conjunction with each other. We're concerned about people getting help," Worley said.


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