Debt Counselor Dangers
Dec 2nd, 2008 | By Rob | Category: credit card debt
The USA Today has an article about the dangers of paying for debt counseling through unreputable agencies that have, apparently, proliferated on the internet.
American culture has grown up with Get Rich Quick! schemes, and now that society is facing a severe debt problem, some believe that the solution is the Get Out of Debt Free! card. These debt elimination companies promise more than they can deliver and charge high fees for the possibility of saving you money.
Before using any of these services, I urge you to ask yourself whether the claims that the service you are considering is making seem too good to be true. If they fail the smell test, then you had better to hold on to your money rather - I’m sure you can find a better way to use the money to assist you with your debt problems rather than toss it away.
Credit card companies claim that they do not work with the companies promising that they will eliminate your debt for pennies on the dollar - and that they will help you with your debt problems if you are willing to pick up the phone, call them, and work out a solution to your problems that both sides can live with.
One method that the article suggests to protect yourself from bad debt counselors is to seek out a non-profit credit counselor instead. Some states require that credit counselors operating in their state work only as nonprofits. There has been a fierce debate among some of these states on whether for profit credit counselors should be allowed to operate alongside nonprofits.
Another method that I have often read about is to spend your money first on a $20 book about credit repair and bankruptcy. I have read that many of the techniques that credit repair agencies will use you can implement yourself at much less cost. Besides, if they don’t work, your only out the cost of the book - and hopefully, you learned something about managing your finances from the book.
If you are still considering paying the fee of a for profit debt counselor in order to eliminate your debt, then be sure to check the company for complaints at the better business bureau and by doing a thorough search on the internet for the stories of successful and unsuccessful stories from consumers who have already paid the money. Of course, you’ll need to be careful that you aren’t led astray by fake testimonials - but at least you’ll know whether they have been used by other people and how their debt solution worked out.
