Consolidation, Settlement, & Management Plans Make it WORSE.
Before we talk about debt relief companies I think it’s important that we discuss debt consolidation in general. Now, if you’re struggling to pay multiple credit cards, sometimes consolidating the debt into a single loan might allow you to reduce your interest rate and/or lower your monthly payment. Here’s the thing though folks, a lower monthly payment typically means a longer repayment term and more interest paid over the life of that loan. On the one hand it might give you some breathing room and allow you to get back on top of things, but it doesn’t come without its costs.
In the most important thing is, if you consider doing a CONSOLIDATION and you’re not willing to change the way you live in terms of your budget and in terms of the money you spend each month then you can actually dig your hole deeper by continuing to use your credit cards after you’ve freed up the balances when you consolidated all of them into a single loan.
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What ARE Debt Management Services?
Debt relief services like debt consolidation, debt settlement, and debt management plans, are advertised all over the Internet as well as on the radio and TV. If you guys watch my episodes at all you know that I’m not even a little bit politically correct and tend to say things that are a bit controversial. This is going to be one of those times. I want you to think logically with me for just a moment. If they got all the money to do that level of advertising then there making a whole bunch of money to be able to afford such advertising which means there making that money from somewhere and that somewhere is going to be you if you sign up with them.
As far as I’m concerned, they are the legal equivalent of loan sharks. Now I’m not saying every single one of them is bad however in many cases the for-profit companies and a few of the nonprofits that have offered these sorts of services are scammers who provide little or no help once you handed over your hard-earned bucks to them. And besides, you can do this stuff yourself in easily 90% or more of the cases and for that last 10% I would honestly suggest hiring an attorney. It may seem more expensive on the front end but on back end I think you’re going to find out that you came out a lot better.
Fortunately the feds as well as many states have some rules and regulations that at least to some extent provide you with some protection.
