Bait & Switch in the area of debt settlement? Who do you trust to handle your credit card debt?
There are many companies out there purporting to reduce your debt but it’s hard to know what the best options are. With so many sources of information online it’s easy to get influenced by opinion, and my blog is no different, so today I decided to help you by giving you a government link on debt settlement that I know you’ll find informative. Thanks for stopping in. Peace, Megan
Taken from the Federal Trade Commission’s website:
Advertisements Promising Debt Relief May Be Offering Bankruptcy
Washington, D.C. — Debt got you down? You’re not alone. Consumer debt is at an all-time high. Whether your debt dilemma is the result of an illness, unemployment, or simply overspending, it can seem overwhelming. In your effort to get solvent, be on the alert for advertisements that offer seemingly quick fixes. While the ads pitch the promise of debt relief, they rarely say relief may be spelled b-a-n-k-r-u-p-t-c-y. And although bankruptcy is one option to deal with financial problems, it’s generally considered the option of last resort. The reason: its long-term negative impact on your creditworthiness. Bankruptcy information (both the date of your filing and the later date of discharge) stays on your credit report for 10 years, and can hinder your ability to get credit, a job, insurance, or even a place to live.
The Federal Trade Commission (FTC) cautions consumers to read between the lines when faced with ads in newspapers, magazines, or even telephone directories that say:
“Consolidate your bills into one monthly payment without borrowing.”
“STOP credit harassment, foreclosures, repossessions, tax levies, and garnishments.”
“Keep Your Property.”
“Wipe out your debts! Consolidate your bills! How? By using the protection and assistance provided by federal law. For once, let the law work for you!”
You’ll find out later that such phrases often involve filing for bankruptcy relief, which can hurt your credit and cost you attorneys’ fees.
If you’re having trouble paying your bills, consider these possibilities before considering filing for bankruptcy:
- Talk with your creditors. They may be willing to work out a modified payment plan.
- Contact a credit counseling service. These organizations work with you and your creditors to develop debt repayment plans. Such plans require you to deposit money each month with the counseling service. The service then pays your creditors. Some nonprofit organizations charge little or nothing for their services.
- Carefully consider a second mortgage or home equity line of credit. While these loans may allow you to consolidate your debt, they also require your home as collateral.
To see the complete article, click here…..
22. October 2009 at 8:31 am
Megan, not sure if I understand your article here.
The Gov. Article you reference is nearly 3 years old and is pointing the finger at bankruptcy lawyers who were posing as “debt consolidation” or other softer forms of debt relief that were so popular when home equity was high and consolidation loans were a plenty. This particular FTC statement has nothing to do with Debt Settlement.
Credit Counseling. You do not deposit money with credit counseling. Credit counseling is a FREE counseling service, that may (and nearly 100% of the time does) recommend a Debt Management service. This service often owned by the CC company is the one who charges you a monthly fee, collects your money and distributes it to your creditors. Hopefully on time. If you cant pay your credit cards monthly minimums and you have a financial hardship, then credit counseling will not work for you. Their payments are about the same as your current payment.
This is where Debt Settlement fits in. Using a USOBA, or TASC certified company who adheres to strict marketing and ethics practices, these companies can negotiate settlements with your creditors. Yes, there are consequenses, just as there is with credit counseling and bankruptcy, it is not a free ride with no pain. However, for those in deep credit card debt, creditors are offering some of the highest settlement offers in recent years. THey are dying for cash.
You can see what your potential settlement offer could be at http://www.creditcardbailout.com and get a consultation with a USOBA or TASC member debt settlment company.
23. October 2009 at 8:26 am
Although you say the article is 3 years old (and I can’t find evidence of it) it does come directly from the Federal Trade Commissions website and I consider it valid since they haven’t done anything to amend it. Thanks for your comments.