Debt Relief Programs – Things To Beware of Before Choosing Debt Relief

With the economy being in shambles, lots of good

, hard-working folk have fallen into debt. They seek help with their problems. There are debt relief programs out there that promise these people help, but often leave them worse off than they were.

Debt relief companies have flourished over the years. They'd like to have you believe they want to help you. They'll solve all your poblems, and leave you with an easier life. They will lure you into their trap with a big juicy promise. You've probably seen them.

Pay only 50% of what you're paying now!

Be out of debt in 6 months!

Cut your interest rates in half!

You'll agree that all these promises sound very enticing. They give you the feeling they can really provide some help to you. Read my words: They want to take money from you! They don't want to save you money. They want to take some of it. As alluring as these so-called solutions may seem, they're not beneficial to you.

Debt consolidation loans are very popular. The cut your interest. They cut your monthly payments. They make it easier to pay. All these seem like positive things, and could actually help you. But for most people it's trying for an easy way out. Unless you can't simply afford your current monthlies, then don't go down this route. The reason you need to pay them less money each month, is that you'll keep paying them for a longer period of time.

Debt settlement agencies are similar to debt consolidation companies. They will bargain with your creditors for a settlement. This usually gets you a significant debt reduction. The reasons they can accomplish this is by not paying your creditors. You will pay them each month, but they will keep the money from you creditors. Instead they keep some as payment and some in an account. Once a few months have passed, they will offer the creditors a one time payment that is usually somewhere between 30 to 70% of the amount of money you owed.

Because of all the late payments, your credit rating will have gone very bad. Because of this, don't expect to be able to get a new loan or credit card for a long time. Nobody wants to lend money to someone that has a reputation of not paying up.

So those are the dangers of debt relief companies. They will deliver on their promises, but it's usually not very beneficial to you.

Debt Relief Programs Things To Beware of Before Choosing Debt Relief

By: Christopher Boris

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