Credit Debt Elimination

Three Signs of Credit Debt Elimination Company Scams

If you watch television at all then you have to have seen commercials advertising credit card and credit debt consolidation companies. Today I wanted to give you some guidance on these credit debt consolidation companies. First of all when do you need to request the help of debt consolidation companies. Clark Howard, the money and financial guru who airs his own show on Headline News Network, instructs his philosophy on the trigger sign that you need to consult a credit debt consolidation company. Howard says that when your total amount of credit card debt is equal to 50% your total income per year, then you officially cannot handle your debt on your own. At this point you should seriously consult the help of a credit card debt consolidation company. To clarify with a couple of examples of when you would need to consult one of these companies would be if you are married and you and both your spouse work and have a total combined income of $75,000 per year, and your total amount of credit debt is equal to $37,500 or more then you should seriously consult one of these companies. If you are a single, working college student, and your total income per year is $15,000, if your total amount of credit card debt is equal to $7,500 or more then even a working college student should consider the help of a credit card debt consolidation company. So for those of you who find yourselves in this situation, we are going to give you three major signs to beware for when consulting the help of credit debt consolidation companies.

First sign of a scam company to note is the legality argument. If you contact, or are contacted, by representatives from a credit debt consolidation company who claim that your credit card companies whom you owe your debt to are operating illegally, do not listen to them. These companies have very well trained salesmen who's main job is to convince you that you simply do not have to pay your debt to the credit card companies because it is simply not legally binding. Now you may ask yourself who in their right mind would believe such a ridiculous pitch line? But that is just the thing, when you are in debt (50% or more of your total income's worth, like I was...) you are not in your 'right mind.' Psychologically when a person is in this much debt it causes rational portions of your brain to become taken over by pure emotions; emotions of embarrassment, and damaged pride take over and cause people to make haste decisions thinking they can have this easy way to get out of debt. Please save yourself some much undo pain down the road and if a company, or an internet program, claims you have no legal burden to pay off your credit cards, stop talking to them and ignore these offers and programs all together.

The second sign of a potential credit card debt consolidation scam program is if the program or company claims that with them you will never again receive a phone call from a collections representative. Some programs make the claims that you will never be hassled again with those pesky collections calls and you can be at peace. This is under most circumstances a lie and one of the signs of a potential scam program. The reality is even if you are in a debt consolidation program the credit card companies you owe your debt to can, and may, call you with collections calls. Under most circumstances you simply just need to inform your credit card companies that you have entered into a consolidation program and that they will negotiate with them over the debt settlement on your behalf. Simply put, be cautious of the companies and programs that make great claims of no more pesky collections calls as the reality of this is not always so.

The third and most important sign to look for of a scam credit debt elimination company is if they make claims that they can eliminate your credit card debt by 70% or more and that they can do it in less than a year. In reality a good legitimate credit card consolidation company will negotiate down to 70% of what you owe, not eliminate 70%. In other words a good program will cut about 30% at the most off of your total credit card debt you owe, this is still a great amount though for most people. Also with this claim some scam companies will claim to accomplish their unrealistic negotiations before they even review your situation. A good company will review your finances and make a plan for you to pay down your debt steadily with lower monthly payments. One last thing to note is to definitely beware of those who claim success in a year or less. In reality a good debt consolidation program may take anywhere from 3-5 years to pay down all of your debt, but it is still definitely worth the time.

So after reading all of this you may think their are no such thing as legitimate credit card debt consolidation companies, well I can assure you their are plenty of legitimate ones out there. The trouble with these companies is their are so many of them and so many selfish people trying to prey off of your misfortunes. If you use the above three warnings I gave you, and try your best to keep a clear rational mind about you when researching these companies, then you will have a great chance of finding a true credit debt consolidation company that will get you out of credit debt in a few years and help salvage your credit score for the future. Remember this final point I like to say, just like 99.9% of all 'get rich quick' schemes are phony, 99.9% of 'get out of debt quick and free' programs are phony as well.