As a consumer-debt attorney, Leslie Tayne, president of a law group in Melville that bears her name, finds alternatives to bankruptcy for her individual and small-business clients by negotiating with lenders.
Hers was not an easy business to grow, as her niche attracts scammers who charge to decrease debt but do nothing, said Tayne. "Right off the bat, people assume it's a scam and they're going to be taken advantage of." Still, she said her firm continues to grow in the aftermath of the recession and superstorm Sandy.
What should people look for to find a reputable consumer debt firm?
Find out if they're licensed by the Department of Financial Services, and see if they have an office, how long have they been in business, what kind of people work on accounts, where is your money being held, where are they located.
What changes are you seeing?
People who were making $300,000, $400,000 come to me with a lot of debt. These people traditionally always paid their bills and never had issues financially. That shift started about two years ago.
Is it getting stronger?
No, I think they're living in debt longer before they seek help. It's become a norm to live with debt before they reach a point where they say, "I've had enough." It's like being sick. You're sick for a long time. Some people will go to the doctor right away. I'm one of those people. Other people will say, "No, no, no, it's going to get better."
What's the average debt you see?
Probably about $85,000 . . . that's not mortgage debt or student loan debt.
What's the most common debt problem?
Too much. You bought the house you were going to "grow into" so you bit off a little bit more than you could chew. The house is now devalued . . . salaries have flatlined, so you're not able to pay for increases in electric and gas and oil [plus] the credit cards and the car. Some of it is lifestyle . . . you have to take a step back a little emotionally and look at it more like a business decision.
What do you do for your clients?
We reduce their monthly payments. That creates more cash flow. And we renegotiate agreements with creditors to pay them less than what's owed. We cut their debt an average of 30 to 50 percent. And we pay [the debts] interest-free so they can be done in a finite period of time.
What sacrifices will clients have to make?
Early on, part of the sacrifice is no spending, no credit card. Living without a credit card is a very emotional thing.
What age group on Long Island is carrying the most debt?
The baby boomers, who never had debt in the past. [Some] have parents who are aging -- that's very expensive. And they have their own children who are in college [or] have gone to expensive schools and they've cosigned all these loans, and they're trying to manage houses that now have no equity in them.
What's the most debt you've seen?
A million dollars . . . doctors that have close to that . . . business lines of credit, equipment leases. People come to me in very desperate circumstances. I try to bring them back to reality: It is only debt. If you can't afford the program we set up, bankruptcy is an alternative and there's no shame in going down that road. But stress from living in debt will make you sick and be bad for your relationships.
Does debt resolution service kill your credit?
Not necessarily. It increases cash flow, reduces spending on credit, puts people on a budget. It actually can increase credit scores by reducing the amount of debt and changing people's debt-to-income ratio. So in many cases it does increase the credit situation for people.
NAME: Leslie H. Tayne, president and founder, Tayne Law Group PC in Melville.
WHAT IT DOES: Resolves debt issues for business owners and consumers.
EMPLOYEES: 8 full time, 2 part time
REVENUE: About $1 million.