Edit Post ‹ Blown Mortgage — WordPressIf you are going through hard times you better get ready to receive unsolicited phone calls with questions along the lines of: Are you in debt? Would you like us to reduce your debt by cents to the dollar? You have been pre-approved for a 20%, 30%, %50 or whatever percentage is the flavor of the month reduction of your mortgage and other debts.
These forms of debt relief companies are in the best cases suspect in the success rate they can produce and in the worst cases out and out conmen whose only purpose is to milk you from the little cash you have left.
However Debt Relief methods can be very effective so it is not a great idea to simply ignore debt relief altogether or even all debt relief companies which in some cases can provide valuable information to people in financial trouble.
So what can you do to find useful help in today’s financial crisis? This article turns the question on its head and answers 3 things that you shouldn’t do instead.
Don’t believe everything you hear. If it sounds too good IT IS.
If your prospective debt relief company says things like these:
- Creditors don’t sue people if they don’t pay their credit cards
- Nothing negative will appear on our credit card if we use debt relief companies.
- And my favorite, the company can have negative information deleted from your credit report.
Unfortunately all three statements are completely wrong and wishing them to be so will not be too productive. This is pretty basic stuff but I think it is worth detailing why all three claims are impossible to keep.
1) Banks need to sue delinquent credit card or mortgage debtors or they create a dangerous precedent that further increases the cost of their services.
2) Debt relief companies can negotiate a settlement for your loan but cannot change the law. Credit and loan providers are required by law to inform about any delinquent payers and no debt relief company is going to bypass that.
3) This one is quite amazing. The next claim debt relief companies need to make is that they can cure cancer. Time is of course the only thing that can get information deleted; generally five years will need to go by before previous credit misdemeanors are forgotten.
Debt Relief companies do have a place as a tool in the debt relief management toolbox especially for inexperienced borrowers that are not comfortable negotiating with their banks and are intimidated by paperwork and banks but it should be by no means the first option as they tend to be expensive and devastating for your credit record.
The truth is that everything a debt relief company can do for you, you can do better with some research and effort. Debt relief companies will talk to your bank and explain that you can’t afford to pay the loan and require a reduction in order to make that possible. Banks understand that it is sometimes better to reduce a loan and get paid than keeping it the same and not see a dime so they are sometimes willing to negotiate. There is no reason why you can’t do that yourself especially considering the “real” cost of debt relief companies.
Related posts:
- Debt Relief Companies Under Scrutiny, New Regulations Could Rock The Industry
- Debt Relief DIY: 3 smart things you can do yourself
- Tax Relief for Mortgage Debt Forgiveness
Related posts:
- Debt Relief Companies Under Scrutiny, New Regulations Could Rock The Industry
- Debt Relief DIY: 3 smart things you can do yourself
- Tax Relief for Mortgage Debt Forgiveness
