A Pinoy Pioneer and the Duterte of debt aid counseling

Hon. Sen. Tobias Enverga (right) congratulating Ben Lou (left) for helping Filipino Canadians get out of debt

Person of Interest: Ben Lou

By: Harvey I. Barkin 

FREMONT – Ben Lou admonishes the inveterate borrower and those desperately seeking a way out of bankruptcy: “Don’t do the crime if you can’t do the time.”

In a culture that places a premium on hard work and thriftiness but hardly any value on investing ahead and paying on time, Lou can’t help but make like the tough-talking Duterte on his regular FilAm Star column. His is the unenviable task of counseling the incorrigible and the desperate who need an attitude change.

“We Filipinos always fall into the pit with credit cards and can’t climb out of the deep hole that we create. Maybe because many of us never had credit cards (until we came to America). I myself admit it.” Many Filipinos forget that the elasticity afforded by plastic is not free money but a debt with the meter running.

Student loans & credit card debts
You’d be surprised at his clientele. “We have 18- and 19-year old clients who are in trouble with student loans, as well as credit card debts. Within six months of getting a credit card, they already acquired debts and they don’t have any way of paying. Two percent of our clients are mostly from 21 and up who went to college. Some of them enlisted at 17.” They were well provided in the military but when they get discharged with accumulated pay, “they either gamble or don’t know what to do with it. They come back to a ruthless reality that swallows them whole and spits them out.”
Lou retains legal experts specifically to handle the U.S. Army Exchange, the Navy Federal Credit Union and the Pentagon Credit Union. “It’s tough to be young and have Uncle Sam easily garnish your earnings.”
“The age range with the most problems would be those from 30 and up. They would be the ones with families. A lot of times, it’s hard for me to convince them to buy a house first. I tell my kids, when you get married, the first goal is to save up for a house. Don’t even think of buying a new car. Start with a house with a small room or a condo/townhouse.

When you gain equity, sell it or rent it. Then move to a bigger house. No one is hurt by doing baby steps. It would be disastrous to take uncontrollable great leaps. Gamble big and loose big as well.”
“Seventy to 80 percent of my clients are those beginning to be late in their payments. Still, other callers wait until they’re desperate. In some cases, their solution is only to file bankruptcy.”

But to some, bankruptcy becomes a problem; not a solution. “I get some clients who say they’d rather not file for bankruptcy because they don’t want a bad record. I reply, ‘you’re already not paying your debt. Why worry about a bad record when nobody will loan you money anymore? It’s better to go through bankruptcy and later recycle your credit. Start off with secured credit cards and deposit about $300. Use those and then after a year, somebody will solicit your application for a real credit card. But you need to recycle and pay.’”

Easier said than done. “I have clients from three years ago who fall off the wagon and come back to me with the same problem. I already taught them what not to do but they do it again. I can’t change their attitude. When they get a new credit card, they will pay diligently initially. I know the pattern: that’s about six to eight months. Then when they get more credit cards, the old habits kick in. They collect cards from Best Buy. Macy’s Sears, Nordstrom. Aside from that they would get Chase and Visa or Master from banks. I ask them, ‘why do you need 16 credit cards? Don’t they accept Visa or Master at Macy’s?’ It would be better to have only one statement to pay, so you don’t have to keep on paying one statement after another.”

“You better wise up. You go to a store and they will offer you credit cards; a bank, free checking and credit card. They set you up to be in debt. You either pay full at the designated time or you pay more in interest. But that’s their business. It becomes a big problem when you have debts everywhere and you lose track of how much you really owe.”
According to Lou, Chapter 13 bankruptcy is prevalent among Filipinos. “I usually get calls from couples who already have equity in their homes. They’d prefer to go through a program than file Chapter 13 because they don’t want to let the house go. Now, if you don’t have property just do a Chapter 7. If you owe $40,000 and earn $30,000 a year, it will be easier to file Chapter 7 bankruptcy. Because you won’t be able to pay in the program. A program usually takes three to four years.”

Sometimes, a client gambles away everything at the gaming table and is forced to declare bankruptcy without wanting to tell the spouse. “You can file for bankruptcy yourself. But if the trustee looks for your spouse, there will be complications. He could ask why only one party is filing. California is a community state. You may be home-free but your debts can be transferred to your spouse. That’s the hard part.”

At another time, a caller said he had almost $100,000 in debt. The other bills, he said, he had settled. “So I said, ‘if you can do it yourself, then why did you call me?’ He replied he didn’t have any money left. Turned out he already dipped into his savings, including their 401(Ks). So I told him the monthly payments he needed to make. But he argued that only half was being asked for settlement. I told him that the fees are based on the amount of the debt.”

“Then my assistant gave me their credit report. And I told the caller, ‘You must have a sweet life. And I asked what she did for a living. According to the report, she was a secretary and her husband was a postal carrier. She drove a Benz and he had a BMW, an M3. I said, ‘By this account you alone have $3,000 aside from your husband’s $3,000 coming in every month but your car payments go up to $3,000. It’s like going to church every Sunday and give $1.’ She did not like what I said. And I said, you’re the one being sued, not me. Tell me what to do. Do you want my lawyer or not?’ She took two days to think about it and called me back.”

Lou says the hardest to talk to are the callers “who have money and own multiple houses. They say they want in on the program. ‘I want to cut my debt in half but I don’t want a negative report in my credit history.’ And I say to them the only thing they could do is to pay their debt in full. I say this program is only for people experiencing hardship. So I offer bankruptcy and they don’t want it.”

“I never charge the client. Anybody who seeks my help gets only advice from me. It’s up to them how they will use that advice. I give them all the possible options. It is for them to choose what fits.”

Once a CEO in Silicon Valley
Lou started Debt Aid Consulting in 2011 with only $12,000. Previously, he was president and CEO of Sysconnect Inc. Until Marvell Semiconductors bought its German network interface card technology in 2008.

“Now Debt Aid Consulting has about 5,000 clients enrolled of which 2,000 have graduated. That’s about 1,000 customers a year. And we have almost 20,000 in prospects. We advertise in the Filipino network. So, 99.9 percent of the clients we get are Filipinos.

Although Pinoys who watch TFC refer their friends to us who are of other ethnicity. Because my clients are happy (with my service), they refer me.”

“If the client is asking for a discount and I see that their hardship is genuine, I tell my agents that if we’re break even to lower the charges. But I’m not a martyr. I really feel good when I am able to help people get back up on their feet. But there’s a trade-off. If I’m giving you help at a significant discount, you have to listen to my sermon. I will tell you what not to do so that you will not call me again with the same problem. If you are a repeat offender and I am the judge, I will tell you to do jail time if it happens again.”

Lou does not mince words even with his competitor. “This is a fraud and you can quote me on that. He doesn’t have experience in finance, calls himself a financial guru and keeps giving financial advice on TV. Because he’s paying for airtime, the network just lets him. This is wrong because they didn’t do their due diligence. The network sales agent got pissed at me because I came out on TV and called the guy colorum.”

He replied to a lawyer threatening him with a lawsuit, “’If you don’t show me incorporation papers in Canada, within a week I will go to Canada Revenue and I will file a complaint that (your client) is doing business illegally in Canada. Canada Revenue will also go to the US Department of Justice. The DOJ will close down your U.S. operations.’ So within a week, their ad in Canada disappeared. And this type of Filipino attitude that they bring from the Philippines is what makes my work harder because there are those who work the system and use their connections to cut through the red tape in order to commit fraudulent activities then disappear in the Philippines. This makes it harder for people like me who are in business to get the public trust because of the actions of greedy individual.”

At 58, Lou has come a long way from their leather shoes business in Marikina and Baclaran department store. The Don Bosco and De La Salle alumni came to help his father at his U.S. business in 1980. He started a video rental business in L.A. in 1997. When Blockbuster came and ate his $5,000 a week rentals, Lou learned his first lesson in business cycle and opportunities.