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Frequently Asked Questions

How much does HUG cost?

HUG is designed to be affordable for virtually everyone. Plans start as low as $39.95 monthly. Please click here for more detail.

How much will my payments be?

Your payments will remain the same or lower than they are now.

HUG works without any increase in your monthly outlay (other than the plan fee). So, if you're able to make at least minimum payments, you can get started right away!

Remember, we designed HUG to help!  If you are struggling to make minimum payments, delinquent on any debts, or even considering bankruptcy we'd like to help you too! Please contact us about available payment options.

How do I know which program is right for me?

We offer a FREE phone consultation to help decide if we are the right fit for each other and which program may be best suited to your needs. No sales pitch or pressure. We mean it!

We're interested in working with people willing to help themselves, willing to learn and accept new approaches, and who are ready to manage their finances successfully. If we're the right fit for you, you'll probably know it before we're off the phone, but if not, or if you need time to mull it over, that's OK. We'll be working together for a long time, so your (and our) comfort level is important to us.

My loans are already in a repayment program. How could I benefit from a HUG plan?

If your loans are in a repayment program it is probably because you need lower payments than the typical 10 or 20 year schedule requires. Unfortunately most payment programs extend the life of the loan substantially, increasing the amount of interest you pay.

HUG supports current payment programs but attacks those loans so you can keep your low payments AND enjoy a debt-free future?

If I'm only making minimum payments, how is it possible to get out of debt faster?

HUG uses a unique debt acceleration method to pay off debt lightning fast. Unlike other programs we are not just organizing debt in order of highest interest or the smallest payment. Our system uses multiple formulas and considers everything – even the kind of debt you have.  So whether it’s a credit card, mortgage, car payment or student loan, you only need to make the minimum payment and follow the Plan in the Client Portal to pay off all your debt far ahead of schedule.

Our dynamic software is constantly calculating to identify priority debt order. It shows you instantly which debt is next in line to be paid off based on complex formulas and a variety of factors.

Don’t mistake this acceleration method for “snowballing,” the simple process of stacking interest rates or payments. Unfortunately, snowballing sounds great, but has proven to be largely unsuccessful long-term.

HUG takes acceleration to a new level and offers the support you need to make it to the finish line. We believe that’s why our clients are so successful in staying the course and reaching their goals.

We discuss the comprehensive HUG plan in greater detail in the customized debt analysis.  Click here to get started!

What about all my other expenses like electric bills, insurance and groceries?

We understand you have expenses other than debt. Groceries, transportation, child care, it all has to be managed monthly. It can feel overwhelming! We’ve got your back. We’ll start by breaking this into steps. First we’ll calculate your debt to income ratio to be sure it leaves room for your living expenses, and suggest adjustments if necessary.  Next we’ll create a personalized debt plan using the payments you are already making or less. Then, once you enroll in one of our coaching plans, we’ll grant access to the HUG Your Budget system and support. Finally, we’ll focus on saving for emergencies, funding future goals and maximizing your retirement.  (Also, see DTI.)

What is effective interest rate (EIR)?

You’ve read that most of our clients pay less than 3% interest over all, and that we’re not refinancing or consolidating debt. So how are we doing it? Paying off debt quickly means you pay interest for a shorter period of time. Let’s look at an example: Paying 4 monthly interest payments of 1% each vs 12 monthly payments of 1% each on the same debt has the same effect as having a 4% rate rather than a 12% rate, hence the term effective interest rate. In other words if paying off your debt early means you paid $40,000 in interest over all rather than $120,000, you’ve experienced a 4% effective interest rate rather than 12%. To learn what you’re over all effective rate would be, Click here to get started!

What is Debt to Income ratio (DTI) and why does it matter?

DTI is an acronym for "Debt to Income." This is expressed as a ratio calculated by taking your monthly debt payments and dividing it by your gross income.   For instance, $2000 monthly debt payments divided by a $5000 monthly income equals a debt to income ratio of 40%. Typically a debt income ratio of 42% or less is what we call "in the HUG zone."

With a DTI of 42% or lower it is likely that you are able to make monthly payments on time. The lower the DTI, the better of course. We recommend 36% or less, so if your DTI is higher than that we'll want to lower your required monthly payments as expeditiously as possible.

Of course many things can affect this calculation, but it's a quick way for us to begin to assess your situation. We use a 42% or less DTI ratio as a starting point because we know you need the other 58% or more of your gross income for taxes, insurance, groceries and other living expenses.

It is often the case that changes can be made to trim payments into an affordable range, or that extenuating circumstances exist which are not reflected in the simple DTI calculation. So, don't worry if your DTI doesn't fit in our "HUG Zone."  Just contact us so we can assess the situation further.

Seem familiar? Lenders use DTI calculations to decide if you can afford to make loan payments.

Can't I just do this myself?

Since 2008 Dr. Rahaim's system has helped thousands of people become debt-free, build successful budgets and plan for the future.  There is strong evidence that clients' high rate of success is due to long-term support and customized financial coaching.

If you prefer to try it on your own, HUG supports that too! That's why we offer a self-directed program. You may upgrade at any time to a higher level of support, but please be true to your instincts. You know yourself better than anyone. Choose the plan that will give you the best chance of success from the start.

Is it imperative for my partner or spouse to participate, even if I'm the one managing our finances?

OK. This is a long answer, (more of a story really) but it's REALLY important to your success, so please bear with us.

Most partnerships consist of people with dissimilar ideas about finance. Since finance is a volatile topic to discuss, it's most common to argue or not discuss it. Hence, within most unions, a sort of division of labor about financial matters takes place. Commonly, one person becomes the steward of family household finances, making sure that the family has everything they need with regard to finances, paying the bills, and juggling funds whenever necessary. The other partner very often has little to no interest in managing the family finances and tends to take on another role for contributing to the household financially or otherwise. This seems to work fine as long as there's enough money to manage everything well and as long as they are no additional stressors on the family like an expense that cannot be afforded, too much debt mounting, loss of employment etc. When situations like this arise, sparks fly. The steward feels they have no solution and they're seeking assistance from someone who may not have a realistic view of the family's or business' finances. We've developed HUG with all types of personalities and situations in mind.  If you are someone who appreciates hands-on control of your finances, you'll love having 24/7 access to your online account, paying your own bills and being in complete control of your own money. Of course if you're in one of our coaching programs you will have a coach to help you.

If you are someone who would rather not pore over the finances and would prefer the simplicity of knowing that applying a simple system (even automatically) will achieve the desired result at a predicted date, you will like HUG too!

Most clients report that Dr. Rahaim's system allows them to pull together as a team- instead of in different directions.

If this story sounds familiar, we suggest considering one of our coaching programs.

We've paid off debt in the past and racked it up again. Will this program really work for us?

It has been our experience that most often, although irresponsible spending may be part of the cause, that a lack of financial organization and necessary tools coupled with high monthly payments can often result in increased debt. When an unplanned expense occurs it often ends up on a credit card or other form of financing.  If you've paid off debt before only to find yourself back in debt again please contact us so we can first discern why previous attempts have not been successful long-term, and what can be done to ensure your success with HUG. Remember, we're here to help, but ultimately you are the most important part of the team. You have to take the first step. We'll provide the tools and support necessary, but we cannot do it without you!

What if I think I may have a spending/shopping problem?

We believe any financial disorder or addiction such as obsessive compulsive shopping or gambling should be taken seriously and we strongly encourage you to seek professional counseling.

Understanding how and why you spend may help.  Ironically, it is fairly common to overspend, and overuse credit cards as a way of rewarding ourselves, or to feel better about our financial situation.  It may sound ridiculous, but if you're doing this, you're not alone. This can be a symptom of living with the stress of being too far in debt. We're tired of telling ourselves, "We shouldn't buy this. We can't have that" and a cashmere sweater ends up on the credit card, or we take a vacation we can't afford etc.  This problem is often alleviated once a solid debt management plan is in place. Not only can current (and future) debt be managed properly, knowing precisely when you will be out of debt completely can have a very positive and even life-changing effect.

If you're experiencing this type of charging or overspending, a HUG coach may be able to help.

If you believe you have a more serious spending problem or addiction, we hope you will seek professional counseling. There are many places to get help. Here are some links we hope you'll consider.

Debtors Anonymouns

Gamblers Anonymous

Can you help me build a budget?

Yes! Just choose one of the HUG Your Budget! inclusive plans.  Our system has been tested by thousands of clients and proven effective for more than 20 years.

Most people build a budget beginning with their income and fitting in the expenses. While this may sound quite logical, this approach is virtually doomed from the start. Life hands us too many surprises for a rigid approach to budgeting. 

At HUG, we’ll not only teach you how to make a workable budget, but how to use it to see where to cut back if necessary, and how to plan for future purchases, vacations, retirement contributions and more.

What if I already have a budget or don't require budgeting assistance?

No problem. HUG has a self-administered plan without budget support.  Also, using our budgeting tool is not a requirement.  Of course we hope you'll try it, but if you have a successful budget system in place good for you!

What if I want to take a vacation or I have an expensive hobby?

We do not freeze credit or take away your credit cards. It's YOUR money, and ultimately you are responsible for making prudent choices. Your HUG coach is available to help with future financial decisions so you learn along the way to manage expenses like vacations properly-without derailing your plans to become debt-free.

We think budgets and diets have more than a few things in common. Both have a better chance of succeeding long-term if you have realistic expectations, a sense of accountability and an unwavering support system. We don't expect you never to take a vacation or buy a car.

Years of experience with budgeting have taught us that living in privation will result in eventual financial binging. The real key here is moderation and working the HUG system to manage future debt IF the expense cannot be funded from cash reserves.

What about my retirement?

Retiring debt ahead of schedule can completely change your outlook toward retirement.  What if you don't have to use retirement income to pay debt? What if you DON'T have to pay creditors for the full term of the loans? What if you could save more money for retirement? How much do you pay out in debt payments monthly? Imagine your life with that in your pocket.  How would that change your retirement plan?  See Retirement for more information.

I'm paid bi-weekly. Can you help to organize my payments to coincide with my paychecks?

Yes. Being paid biweekly can sometimes cause cash flow problems but it can also help speed up your debt plan. Bi-weekly pay means you have 26 pay periods or a total of 13 monthly units rather than 12 like people who are paid weekly or monthly. This is why some people talk about getting an "extra" paycheck.  If we organize your payments on a biweekly basis, two things happen.

1. Your cash flow problem eases.

2. Your debt gets paid off faster.

Most creditors are not structured to receive biweekly payments. If you just send half your payment it may not be credited properly or you may suffer late fees. Our bi-weekly tool accomplishes similar results without requiring the creditor to change their system.  If you're paid bi-weekly, be sure to ask us about our bi-weekly scheduling tool.

What if I'm self-employed or have sporadic or seasonal income?

Unpredictable or sporadic income is more common than you might think. HUG is designed to be flexible but if your variable income is causing you concern, please bring it to your coach’s attention. We are quite familiar with this challenge and have tools to help you equilibrate your income over time, and improve expense management.

Do you freeze my credit?

Absolutely not! We do not force you to close or relinquish your cards, and we do not harm or freeze your credit as part of our program. Further, HUG does not report to credit bureaus so no one will know you're working with HUG (except you and us) unless you tell them. A large number of our clients are business owners, teachers, medical personnel or others who rely on liquid credit due to seasonal or sporadic income or who use their card for other reasons like gaining miles interest free.  We not only don't freeze your credit, we'll help you use it wisely!

Will this harm my credit?

No. HUG is all about good credit.  We do not require you to become delinquent on any debt, like some companies, in order to succeed. The HUG plan is based on making timely payments.  All things being equal, your credit should only improve with HUG because payments are made consistently on time and balances are paid ahead of schedule.

We understand there may be times you cannot make your monthly payments on time. While this may damage your credit, it is not due to the HUG program, and HUG can help you restore your credit as soon as possible.

Will it be reported to the credit bureaus?

HUG does not report to credit bureaus so no one will know you're working with HUG (except you and us) unless you tell them.

Are you going to call my creditors for lower interest rates or payment programs?

Although HUG does not rely on payment programs to pay your debt off early, there are times when the need for lower payments is indicated.  We offer different levels of support depending on your needs.  If you have questions about payment programs and other options, please don't hesitate to contact us.  Some forms of negotiation can harm credit so please don't go this alone! A HUG coach can help to sort things out and determine what options may be available.

Should I consolidate?

HUG doesn't use consolidation or restructuring as a core tactic, but in some cases it makes sense as part of a customized HUG solution.

It may be appealing to think of "one easy payment" however, consolidation can actually keep you in debt longer. In essence, consolidation combines several smaller debts into one larger debt.  Most often, people consolidate based on one factor only- interest rate. This can cause a real problem if you're not also considering the term of the loan and the monthly payment. Although you may have a lower interest rate, the shorter-term of the loan (perhaps 5 to 10 years) may cause your monthly payment to be higher than the sum of the individual debts you consolidated.  This is a common problem with using 401k loans or personal loans to consolidate credit card debt.

In addition, predatory lenders offering interest rates of 25% or higher labeled as consolidation loans can have a similar effect.

We believe there is a right way and a wrong way to use consolidation or refinancing (also known as restructuring). If you are considering consolidating or restructuring your debt, a HUG coach can help sort out the details.

Statistics show that consolidation often leads to layering on more debt. Virtually every day, we hear from someone who consolidated their debt only to report that since they had not solved the underlying financial issues, they found themselves taking on more debt in addition to their consolidation loan. In some cases, the amount taken out of a paycheck to repay a 401(k) loan used to consolidate, is so high there is not enough left to meet living expenses.

"Also remember the advice which a lender gives you is productive for getting a loan; but not always good for the credit scores. If they tell you to consolidate and close accounts be careful how you go about this, most people's compliance usually results in dropped credit scores. You are shrinking your overall available credit limit verses your balances... so remember you don't want to hurt the utilization by consolidating and closing accounts behind you.” -- myFICO

Should I settle my debt?

Debt settlement has become a popular topic. You can hardly turn the television on without hearing the words, "Settle your debt for pennies on the dollar!" In most cases, we are not in favor of settlement, but there are cases where it may be appropriate. There are many details you should know about debt settlement before considering settling a debt. Here are just a few.

  1. It virtually always harms your credit. Ask if the creditor will report you as "settled" rather than "paid as agreed."
  2. You will probably need a tidy sum of money in order to take advantage of a settlement offer. In some cases, creditors may offer to spread that out over three months or so, but if you are delinquent on the debt in the first place, you may not have the cash on hand to settle it.
  3. Be prepared to receive a form 1099C at the end of the year for the amount of debt forgiven. Check with your accountant to see how much you may owe in taxes after adding this to your income.
  4. It may not be the original lender who is contacting you with a settlement offer. Paying money without doing your research can be dangerous. Suppose you receive notification later from the original company you owed stating they have not been paid?  Be VERY certain that any money you pay will clear your original debt.


Should I consider bankruptcy?

Of course we would prefer to protect your credit AND get you out of debt quickly. You may be surprised to learn however, that we are generally more in favor bankruptcy then debt-settlement in cases where it seems unlikely that your payments and budget can be brought into an affordable range. 

In some cases, bankruptcy is just the right solution. In other cases, it makes sense to file a bankruptcy on the unsecured debt, like credit cards, while managing the non-dischargeable debt (perhaps a mortgage, car loan, student loan) through the HUG program.

Caution! All too often people see bankruptcy as the whole solution citing credit cards as their "pain point" but actually it could be just a wake up call to get real financial coaching to help rebuild credit, manage remaining debt, budgeting, college and retirement planning and more. We'll help you gain a strong financial foothold so you can thrive as quickly as possible.

Knowledge is key when making this decision.  If you are considering filing a bankruptcy, we suggest you contact an attorney of your choice to gather the information needed so that you're making an informed decision rather than an emotional one. We are not attorneys and encourage you to seek legal counsel for answers to your questions.  A few questions you might ask are:

"Do I qualify to file based on income, debt and assets?"

"Which debts might qualify for discharge?"

"How will it affect my credit?"

"How will my retirement account or other assets come into play?"

"What will it cost to file?"

I noticed even my first debt paid ahead of schedule, but I'm only making minimum payments. How can this be?

If your first priority debt happens to be a credit card, it may be paid off ahead of schedule even without making larger payments. This may be because the creditor is billing on a declining schedule, meaning your required minimum payment decreases as your balance declines. HUG doesn’t “like” declining schedules so it attacks the debt with a level payment. This is just one of the many features of HUG, that helps speed the acceleration toward zero debt.

I noticed one or more of my debts isn't paid off any sooner than the standard timeline. Why?

Our software calculates the fastest and wisest sequence for retiring your debts. In some cases, a debt may be seen as a non-priority debt.

Uniquely, the HUG system considers many factors—not only interest rates. For instance, the type of debt could change where it appears in the timeline. A good example might be an automobile lease.  It is likely you will either need to buy the car or lease another. We treat this debt differently than others so it may appear as retired at the standard time.  Perhaps surprisingly however, a 0% teaser rate credit card may be identified as a priority debt due to the level of monthly payment required or default interest rate. The dynamic HUG software is always calculating your timeline relative to all the current debt information.

What if I want to pay off a debt other than the priority debt identified by the HUG analysis?

You always have options with HUG.  The software will suggest the priority debt according to our best calculations, but you may have a personal reason to target a different debt. You're always able to make changes in the system. It will recalculate automatically and show how your plan has changed due to the adjustment.

How much do I really need in emergency cash reserves?

Many advisors offer a quick answer like "3-6 months of living expenses," but we feel that sort of "fit-in-the-box" answer can be dangerous.

Your risk tolerance, pace, and method of building reserves may vary widely from someone else's.  One facing a possible career change may desire stout cash reserves throughout the transition, while another may feel comfortable depleting an investment account or taking on debt.  One may have ample capital to save, while another is just scraping by.

In general, we do not recommend you delay in focusing on debt until you've accomplished your cash reserve goal. Rather, we strive to accomplish the two goals simultaneously.

Many have little or nothing saved for emergencies, sending every spare penny to creditors. While it takes time, HUG can help you make the shift from debt positive to cash positive. Start slowly, manage future debt properly and budget prudently and you will soon be headed in the right direction. Remember that even a small emergency account is better than none.

NOTE: Occasionally, we have an opportunity to "jump start" or fortify your emergency reserves. Please contact us before you decide to give your tax refund or financial windfall to creditors. We can give you the input you need to make an informed decision.

What keeps us in debt?

The psychology of debt could be debated endlessly. What causes us to take on debt when we know we'd be better off without it? Equally as important perhaps, what causes us to resist asking for help? Below are a few of the things we're up against.  All the more reason why having an objective, third-party HUG coach is so important.

  Human nature and relationships

  Lack of support, accountability, and proper tools

  Fear or misapprehension of money management

  Sense of hopelessness


  Shame or embarrassment

  A sense of ownership/responsibility or pride

  Personal history

  A tendency to procrastinate taking action (click here to learn more about procrastination



The road to success is always under construction
– Lily Tomlin
"Nothing in life is to be feared. It is only to be understood."
– Marie Curie
“What I would like to do... once I take care of all my kids' student loans, is buy a red 1965 Mustang and fully restore it.”
– Mike Quigley
"There is scarcely anything that drags a person down like debt."
– P. T. Barnum
"Bankruptcy laws allow companies to smoothly reorganize, but not college graduates burdened by student loans."
– Robert Reich
“This would be a much better world if more married couples were as deeply in love as they are in debt.”
– Earl Wilson
"If we don't change direction soon, we'll end up where we're going."
– Irwin "Professor" Corey