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Letting the computer pay off your debts
By Peter Jones
Over one’s lifetime, the average consumer will pay more than $600,000 in interest charges to banks and finance companies.
Nearly one in every 100 households in the United States — or one every 30 seconds — will declare bankruptcy.
More than $2 million in new consumer debt is generated every minute. And before the second hand hits the 12, at least two new American homeowners will face foreclosure.
In face of today’s economic downturn, individuals and small-business owners have grasped for straws, or virtually anything or anyone — from motivational speakers and talk show hosts to religious groups like Crown Financial Ministries — to help pull themselves out of debt.
Amid the Zeitgeist of keeping one’s head above water, it is little wonder that computer software is among the newest tools for managing personal and business debt.
Among many on the market is the Money Merge Account System, which claims to combine innovative software with traditional banking systems and personal coaching to drastically reduce one’s mortgage term and minimize interest on credit cards and other debt.
According to the firm’s Web site, the program calculates the fastest way to pay off mortgage and consumer debt and build substantial savings based on specific income, payments, living expenses and financial goals.
Nick Morrone, who sells the Money Merge Account System for Centennial-based Advanced Equity, says the idea is to take the guess work out of deciding which loans to pay off first, when to pay your bills or how much extra to send to your lenders.
“The software uses advanced factorial math,” he said. “If you have five different debts — a mortgage, maybe two car loans, two credit cards — there’s 120 different ways to pay five debts. This program figures it out for you.”
The parent firm, United First Financial, paid two engineers $2.5 million to develop math equations that sort through such factors as rate of interest, timing and other variables to tell consumers and business owners which creditors to pay, how much and when.
“We take people with a 30-year mortgage down to nine years and have it paid off with all their other debts as well,” Morrone said.
Such computerized debt counseling systems are, frankly, smarter than the average debtor, according to the software rep. Some have been critical of the firm’s claim that such can be accomplished without major lifestyle changes, but Morrone defends the approach.
“People might say, OK, I can take my highest interest and my lowest balance and get that paid off first,” Morrone said. “The thing is, maybe it makes more sense to make the payment on your mortgage because that’s got a $200,000 balance. The program figures it out.”
The Web-based software is not cheap. It costs $3,500 if you are calculating more than $80,000 in debt. If your debt is less than $80,000, a roughly 50 percent discount is available. The firm markets a money-back guarantee and says unlimited customer service is included.
Not everyone on the consumer-debt front is enamored with such Web-based debt solutions. Financial guru and talk show host Dave Ramsey is among them.
On his Web site, Ramsey writes, “This is basically getting a home equity line of credit and buying some $3,500 software that helps you pay off your mortgage faster with no change in lifestyle. There is no magic software. Software doesn’t enable you to live on less than you make.”
Debt software runs the gamut in price and promises. A company called Zilchworks, for example, offers software plans than range in price from $40 to $350. Many others are similarly priced.
Some stand by the more expensive versions. Marty Laws of Denver was so satisfied with the Money Merge Account System that he became a sales representative through the firm’s multi-level marketing program.
“I couldn’t understand it in the beginning,” he said. “I was skeptical. So I asked a lot of people about it. I bought the plan in April 2007. It more than paid for itself by August of the same year.”
Nearly one in every 100 households in the United States — or one every 30 seconds — will declare bankruptcy.
More than $2 million in new consumer debt is generated every minute. And before the second hand hits the 12, at least two new American homeowners will face foreclosure.
In face of today’s economic downturn, individuals and small-business owners have grasped for straws, or virtually anything or anyone — from motivational speakers and talk show hosts to religious groups like Crown Financial Ministries — to help pull themselves out of debt.
Amid the Zeitgeist of keeping one’s head above water, it is little wonder that computer software is among the newest tools for managing personal and business debt.
Among many on the market is the Money Merge Account System, which claims to combine innovative software with traditional banking systems and personal coaching to drastically reduce one’s mortgage term and minimize interest on credit cards and other debt.
According to the firm’s Web site, the program calculates the fastest way to pay off mortgage and consumer debt and build substantial savings based on specific income, payments, living expenses and financial goals.
Nick Morrone, who sells the Money Merge Account System for Centennial-based Advanced Equity, says the idea is to take the guess work out of deciding which loans to pay off first, when to pay your bills or how much extra to send to your lenders.
“The software uses advanced factorial math,” he said. “If you have five different debts — a mortgage, maybe two car loans, two credit cards — there’s 120 different ways to pay five debts. This program figures it out for you.”
The parent firm, United First Financial, paid two engineers $2.5 million to develop math equations that sort through such factors as rate of interest, timing and other variables to tell consumers and business owners which creditors to pay, how much and when.
“We take people with a 30-year mortgage down to nine years and have it paid off with all their other debts as well,” Morrone said.
Such computerized debt counseling systems are, frankly, smarter than the average debtor, according to the software rep. Some have been critical of the firm’s claim that such can be accomplished without major lifestyle changes, but Morrone defends the approach.
“People might say, OK, I can take my highest interest and my lowest balance and get that paid off first,” Morrone said. “The thing is, maybe it makes more sense to make the payment on your mortgage because that’s got a $200,000 balance. The program figures it out.”
The Web-based software is not cheap. It costs $3,500 if you are calculating more than $80,000 in debt. If your debt is less than $80,000, a roughly 50 percent discount is available. The firm markets a money-back guarantee and says unlimited customer service is included.
Not everyone on the consumer-debt front is enamored with such Web-based debt solutions. Financial guru and talk show host Dave Ramsey is among them.
On his Web site, Ramsey writes, “This is basically getting a home equity line of credit and buying some $3,500 software that helps you pay off your mortgage faster with no change in lifestyle. There is no magic software. Software doesn’t enable you to live on less than you make.”
Debt software runs the gamut in price and promises. A company called Zilchworks, for example, offers software plans than range in price from $40 to $350. Many others are similarly priced.
Some stand by the more expensive versions. Marty Laws of Denver was so satisfied with the Money Merge Account System that he became a sales representative through the firm’s multi-level marketing program.
“I couldn’t understand it in the beginning,” he said. “I was skeptical. So I asked a lot of people about it. I bought the plan in April 2007. It more than paid for itself by August of the same year.”
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