In the debt relief world one finds all kinds of people. One will find good people, caring people but one will also find liars and bad people. Not everyone that claims is going to help you, will. I will cite some examples of the tactics used to lure people to join debt relief programs, sometimes ending up in worse financial troubles then they are already in.
Beware of companies that tell you to stop making your payments to your creditors. This is an outright lie and it is against the law. No one can counsel a person and tell them it is ok to stop making their payments to their creditors. Beware of these agencies, they only have their best interest at hand.
Beware of companies that tell you they can keep your creditors and collectors off your back. This cannot be done 100%, one will still get some annoying phone calls filtering through then and again. No debt relief program is 100% proof of keeping collectors at bay.
Beware of companies that tell you they contact your creditors as soon as you enter their program. It is not even worth it to a debt relief company to contact your creditors until an account is 90 days past due. Anytime before that it is useless because there will not be a settlement deal on the table. Most debt relief programs let accounts age on purpose to get a better settlement deal for a greater commission to them, meanwhile the interest rate charges and late fees continue to accumulate. It is true the best time to settle an account is about 180 days delinquency before the account charges off. This means before the account is sent to a collection agency. Some creditors/banks will actually sell the account to debt buyers for pennies and declare it as a loss at this time.
Beware of companies that tell you if they cannot settle your accounts they will place you on payment plans. Here is where some companies make higher commissions from clients. It is often better for a debt relief company to set clients up on payment plans than settling their accounts. Even at a lower commission rate they make a higher commission keeping in mind the balance of the account. Beware, some companies are masters at doing this.
Beware of companies that tell you with about 2% savings on a monthly basis of your total debt, they will help you become debt free in about 36 months. I will tell you where you will be in 36 months. Your paycheck will be garnished, your house will have a lien on it, and most likely you will be sued. If your purpose is to negotiate, there must be funds available to do so. No one shows up to a gun fight without ammunition.
Beware of companies that tell you they will find legal council for you if you are sued. When you are sued, they are going to tell you to file a legal answer at your local courthouse. Debt relief agencies cannot give you legal advise, only lawyers can.
Beware of companies that tell you even if you have no money to pay your rent, gas and put food on the table they are going to help you become debt free. If you want to negotiate on your credit card debt, your income ratio must be at least two times higher than your debt. Then again if you had that much money you would not be in debt.
America, wake up! If you want to be debt free, first cut up your credit cards. Second, find an agency that will not tell you lies. Third, find an agency that will be affordable to your pocket. I will tell you what those high retainer fees are for, they are for the debt relief agency owner to drink Margaritas somewhere in Panama or Mexico. America, wake up!
America, stop being abused. If you cannot come up with the funds to pay your credit cards on time what makes anyone out there think they can come up with the funds to settle their accounts. Before anyone finishes paying the debt relief agencies fees they will be on poor street. America wake up and do your homework, sometimes the cure is worse than the illness. Seek help, but seek it in the right places. Remember you do not have to spend a ton of money to get the help you are looking for. Again, beware of the lies you are told, not the ones you are not!
Eric Gartle has worked in the debt settlement industry for the last 10 years and has vast experience negotiating personal credit card debt as well as business debt. For more information please visit our site at http://www.pemperandgartlecom
