The New Year’s crowd, goals once again fixed, braves the frigid weather to pack the Wheat Ridge Recreation Center on a recent Thursday night. People are, if nothing else, creatures of ritual, and all ritual is born of the desire to bring order from chaos. So, they are here, the treadmillers and lap swimmers and weightlifters.
Another group gathers in one of the meeting rooms. They’re taking a financial education class. A couple days earlier, I’d talked to Chad Gentry, executive director of Community Credit Counseling Services, a Lakewood-based nonprofit. Yes, he said, “there’s definitely a burst from the New Year’s resolution crowd.” Some people start anew because they can; some because they must.
These days, between the recession and the general lack of financial education, CCCS debt counselors are always busy. Last year, they served 5,200 people.
“The big shift is that it’s the upper middle class, the financially stable,” Gentry said. “It’s the airline pilot making $140,000 a year. I just helped a woman with a $2 million net worth. In the time it’s taking to reset the economy, they’ve gone through their savings, their home equity, their 401(k)s, their credit cards.”
Gentry told me the class was for serious financial problems. That didn’t sink in until I arrived.
At least 45 people fill the room. The group includes a mechanic, a factory worker, a real estate broker, a furniture salesman, two postal workers. The youngest appear to be in their 30s, the oldest in their 60s.
A projection screen reads: “pre-bankruptcy class.”
I recently read that Colorado saw 25,600 bankruptcy filings during the first 11 months of last year. Nationwide, personal bankruptcy filings surpassed 1.4 million, up a third from 2008. Some expert-types predict this year will bring fewer filings.
CCCS offers court-mandated pre- and post-bankruptcy classes, debt- management counseling and community financial education workshops. Thursday’s class is run by Katy Rogers, program director, and Katie Soker, a counselor. Every Thursday brings a new crowd of people.
“Our mission is to help people reach financial stability,” Rogers tells the group. “Sometimes bankruptcy is a part of that financial journey.”
Rogers compares a budget of the 1950s with one of today, a discussion that includes the plunge of household savings rates and the rise of consumer-credit debt.
Soker takes over. “What’s your definition of financial independence?” she asks the class.
A woman raises her hand. “Having extra money at the end of the month.”
A man says: “Being able to pay my bills and save 10 to 15 percent of my income and being able to retire.”
Retire, a few people murmur and nod.
They cover basic financial rules, fill out budgets and list their debts so Soker can conduct individual counseling sessions later. It’s possible, she says, other options, such as debt consolidation, might be available.
Bankruptcy is a chance to wipe the slate clean and can be looked at as a gift, Rogers says, but it has consequences, including lower credit scores and higher interest rates on future loans.
“So, it’s a gift,” a woman says, “but you’re really screwed.”
I ask a few people after class what brought them to the point of contemplating bankruptcy.
Says one: “Credit-card debt. I was going to roll it into my mortgage, but then everything went to hell.”
Says another: “Low-income, no cash. I should have done this earlier, but there’s a stigma attached and I really need to get over that.”
Says another: “I’m a real estate broker, a commission employee. We’re not even counted in the unemployment rate. It’s not what I wanted to do, but it’s the only way I could keep my home so I didn’t end up sleeping in my car.”
Says another: “I’m a commission salesman and my commissions are down 70 percent over the last two years. My wife lost her business. It all just came down.”
A manufacturing worker tells me his bank wouldn’t work with him on a short-sale for his house. “I had a credit rating of 790. I was a good customer. How did I go from that to being a piece of crap?”
The mechanic tells me he has five kids, all under age 12, an ex-wife, $3,200 a month take-home pay, $2,900 in expenses and $47,000 in credit-card and medical debt.
“All I need is one sick kid and I’m over budget. I tell people I make $61,000 a year and they say, ‘You’re doing OK,’ and I say, ‘No, I’m the guy going to food banks twice a month.’ “
They all tell me they will file for bankruptcy. A miserable year lies behind them. A new year stretches before them.
“I’ll bounce back,” the manufacturing worker tells me as he leaves. “I know I will.”
Tina Griego writes Tuesdays, Thursdays and Saturdays. Reach her at 303-954-2699 or tgriego@denverpost.com.
