Knowing 2 Sides of Debtors’ Prisms : Ex-Bill Collector Understands Clients on Financial Brink

When the American Dream turns into a financial nightmare, Ginger Bengochea steps in.

The kindly 58-year-old is often the last hope for the hopelessly indebted. A counselor with the nonprofit Consumer Credit Counseling Service in Santa Ana, she readily identifies with those who seek her help.

She’s been there.

“I’ve been single for 26 years. I raised my children. At one point, between the IRS and credit cards, I was about $10,000 in debt. I had terror. I felt like I had no control. I was scared to death,” Bengochea said. “When the mail came and if I got bills, I would not open them. I would pick a time when I felt strong enough and then open them all at once. It was very painful.”

After nearly a decade selling real estate, the land boom went bust and her commission-only income shriveled.

“Bankruptcy was not an option for me. I had too much equity in my home to lose it. But I had to leave the real estate profession,” she said.

“That was the hardest part, to let go of my dream. I had done well, but by this point, even when I did make money, I was still falling behind. I couldn’t seem to get ahead.”

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In the search for a steady income, she ended up as a bill collector. “It was very ironic, but there were many others in the profession who were in the same position. The one thing I brought to my work was that I treated everybody with dignity and respect. There were some who threatened suicide, but most of them were angry. They don’t want to talk to you and some will even defy you to get money out of them. And there’s a lot of people, when they get in that situation, they will make a promise they can’t keep, just to get the collector off the telephone.

“I found that if you treated them with respect and dignity, they would bend over backward to try to send the payment they needed to.”

Bengochea switched sides in 1991, becoming an advocate for debtors who need help. It is a growth industry, fed by unprecedented numbers of credit card offerings. In 1995, banks mailed 2.7 billion credit card solicitations, about 17 for each U.S. adult, according to one survey.

The average client who steps into Bengochea’s office is between 25 and 45 years old, has a dozen credit cards, owes $19,000 and earns about $30,000 a year.

One-third of those who seek help are given budgeting advice; one-third are put on a strict debt-management program; and one-third are told to seek legal advice about declaring bankruptcy.

“Surprisingly enough, most people who come in here don’t want to file bankruptcy,” Bengochea said. “It’s a very personal, moral issue to them. It’s a stigma. Some of the hardest counseling sessions are when you have to talk to someone about having to let go, because they’re trying to do the impossible.”

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For those who can be helped, Bengochea said, the first step is to face up to the problem.

“We often are our own worst enemy in how we beat ourselves up emotionally in dealing with the fear. We don’t want to look at it. I had a lady who came in with a plastic grocery bag with her bills in it. She didn’t want to look at them; she wanted me to open them. We did it together.

“Often, when people just write down the amount of their bills, their living expenses, it’s an eye-opener. And there’s no magic solution. They’ve got to increase income and reduce expenses. We have them think about changing their lifestyle, or maybe they can work a second job. I met one couple and she didn’t work and he was working three jobs. I said to her, ‘Your husband must love you very much.’ ”

Bengochea conducts seminars for adults and goes to elementary schools to teach children about the perils of easy credit. While many of her clients have gone into debt just trying to make ends meet, others use credit to hang on to a lifestyle they cannot afford.

“I’ve sat here with people who won’t give up the private school for their kids, they won’t give up the landscaper or the pool cleaner--they won’t give up their lifestyle.

“That’s their choice, but there’s a lot of denial going on. We all think we can fix it ourselves and we hate to ask for help. It’s very embarrassing, but it finally gets to the point where you can’t keep up with it anymore.

“We should be much more educated about the dangers here. We’ve become very materialistic. Everybody’s on credit and it’s become an accepted way of life. Money and possessions have become too important and I see people just getting swept up in it, because that’s the way our economy grows.”

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Profile: Ginger Bengochea

Age: 58

Hometown: Anaheim

Residence: Irvine

Family: Three grown children; six grandchildren

Education: Associate of arts degree from Fullerton College

Background: Sixteen years in various sales jobs; 10 years in real estate sales; a bill collector for two years; five years as a credit counselor for nonprofit Consumer Credit Counseling Service, where she has been director of counseling for the last two years

On the good life: “Money and possessions have become too important, and I see people just getting swept up in it, because that’s the way our economy grows.”

Source: Ginger Bengochea; Researched by RUSS LOAR / For The Times

Los Angeles Times