Harvey Bernard learned the secrets of his profession the hard way.

Monday, November 20, 2000

Harvey Bernard learned the secrets of his profession the hard way. Eight years ago, the man who is now a "debt elimination specialist" got into financial troubles.

Now he’s trying to spread the word that "any debt is too much debt.

"There are a lot of things that people don’t understand and don’t realize," Bernard said. "They don’t understand how much it costs them to have these debts – credit cards, car payments, even mortgages – and how much better off they’d be without them."

The debt elimination specialist claims he can teach people how to get completely out of debt in five to seven years on their current income … all in three hours.

"In studying and trying to figure out what to do, I discovered it was possible to do what I teach in my class," Bernard said.

"I’m teaching them the opposite of what most people do," Bernard said, declining to reveal what exactly he does teach in the class, only offering the following. "It’s a whole different way of looking at matters than we’ve been taught in our culture."

However, taking Bernard’s class is not a guarantee the student will be out of debt a few years down the road; it takes some leg work as well.

"Students leave here with the knowledge they need to get out of debt; that doesn’t mean they’ll actually do it," Bernard said. "However, if they follow what I teach they can get out of debt in five to seven years and then work their way up in the same amount of time to a healthy retirement."

Bernard’s class is not the only option for those people – who he says make up 96 percent of the population – who are not exactly financially healthy.

Some banks offer advice and consultations, and there are financial management companies. The solutions they offer are as varied as the people who come to them for advice.

One such financial management company is Auriton, a not-for-profit company that was set up in 1991 to help debtors sort through their options and find the best solution for managing their debt.

Auriton, formerly Metropolitan Financial Management, is based in Roseville, Minn. and has offices in 10 states.

An easier way for Austin residents to learn about the company may be by visiting its website at www.debt-help.com.

While many consumer credit agencies charge fees based on a percentage of the debt and require clients to pay monthly with a cashier’s check or money order, Auriton charges clients a $25 initiation fee.

If the company believes it can help, a counselor is assigned to work with the client at no additional charge.

Banks – although not all of them – offer more options.

Doug Amundson, president of Farmers and Merchants bank in Austin, said clients who were looking for a way out of debt are welcome to talk to one of the bank officers. Amundson added that the bank has given seminars on the topic in the past and would be willing to do so again.

"We have some ideas we think are valid," the bank president said. "The biggest thing is to set down a budget – you need to see where you spent your money over the last three months. If you don’t know where you’re spending your money, it will be difficult to plan ahead."

The next step, according to Amundson, will require more self control. The debtor must break down his or her spending into three categories: needs; wants and desires.

Needs are the essential items like food, clothes, shelter and medical assistance.

Anything beyond that, or any upgrade to those things, is a "want."

"Hamburger versus steak, Calvin Klein versus a no-name pair of jeans," Amundson said. "Better housing, a better car – those are wants, not necessities."

Finally, he said, come desires, like jewelry, a boat, a big screen television.

"These are things a person could easily live without," he said

He advocated no credit cards, except for one to be used in emergencies and the start of a savings account immediately, even before crawling out of the money pit.

"Even when you’re in debt, you should be putting some money away for the unknown," he said.

Amundson’s advice isn’t only for the low or middle income citizens either.

"We all need this advice," he said. "Even people with high incomes need to rethink their priorities sometimes. And, what’s right for one person isn’t necessarily the answer for someone else."

Because there is no one perfect solution, Amundson suggests finding a financial advisor or consultant that you feel a rapport with.

"You don’t want to be talking about your personal finances with someone you don’t trust," he said.