28 Sep Debt Relief Credit Counseling Services
Now you are up to your eyeballs in debt. Your cards are maxed out, the interest rates are high, and the only new credit you can get is tiny and expensive. It’s time to get scammed with sleazy “debt relief” or “credit counseling” services. While there are some reputable companies in the debt relief industry, there are far too many who will just prey upon you. While these companies certainly can reduce your interest and lower your payments, it’s not free
Not only will they get a percentage of the collected debt, there may be an counseling fee, an account set up fee, and a monthly service fee. Sometimes these fees are all charged up front before any of your creditors get a dime. These fees are on top of the interest and finance charges you will still have to pay to your creditors. Some companies will simply pocket your first payment, meaning ha you are already a month behind before your first payment is made to the creditor.
- Trust Non-profit Companies?
Beware that not all non-profits are safe. Many disreputable companies have reorganized as non-profits. Although the IRS tries to monitor this category, the scam artist moves faster than the IRS. A boiler-room operation can close down and relocate faster than you can say “Where’d my money go?”
Remember that these companies are only middlemen and even though you pay the credit counseling agency, your relationship is still with your creditors. Lazy or inept companies will simply not get your payment in on time, prompting more fees and penalties by the creditor. Additionally, creditors are not required to accept deals offered by the counseling companies. So if you are still in default, you can get sued for the debt while you are paying the counseling company ona current basis.
- Kiss your credit point score goodbye
The only way to qualify for a debt relief management program is to miss your payment. If you always try to pay on time then your creditors will have no reason to help you out of debt slavery. Even if they do, your credit score will take a serious hit. Maybe you don’t care and maybe you shouldn’t. After all, if your goal is to be debt-free maybe it is better not to eligible for new credit to keep going around on credit.