Get out of Debt Consolidation with “Stimulus Money” has been flooding the mail boxes of American homes. Some look so legitimate and even have your debt amount estimated in big black lettering. These companies are popping up all over and ever since the government coined the term “stimulus money” , these companies have been using this to make you think it is the government money used to help you get out of debt.
“You are qualified to take part of the “stimulus money” get out of debt program, is usually the first line in the letter. They come in all shapes and sizes, some even look as if they come from the government with the information on the front envelope. These companies are the debt consolidation agencies that have been around for years.
A recent article in the NY Times tells the story of a woman who did use one of these companies and ended up needing to declare bankruptcy. She is one of thousands that thought her credit card debt would be paid off in a year, only to owe more money than she started with.
” Linda Robertson, 58, from Kansas City regrets ever falling for the pitch from a debt settlement company advertising on the radio. As with most of the companies they promise to keep you away from bankruptcy while eliminating your debts. She sent nearly $4,000 into a special account established under the company’s guidance before being sued by a credit card company. After the $4,000 her account had only $1,470 remaining because the rest of the money the debt settlement company had collected from her were for fees. She had to file bankruptcy”, reports the NY Times.
These companies can do well with deception, they call your home with promises of getting rid of your debt for good. Many are calling it the “stimulus package” and money has been put aside for people in debt like you. When you ask about fees, they say it is all figured into your monthly payment. They take advantage of the vulnerable during these hard times. There victims are good people wanting to pay their debts.
Another scheme the debt consolidation programs have pulled off in the past is to sign you up and after you make a few payments, your account is “sold” to another company and your last payment is not registering. I personal had this happen to me about six years ago. I thought the deal they were offering was great. They were going to talk with all my creditors and get a lower percentage rate, group all the debts together and instead of the $400 I paid a month in credit card bills, I would pay them $300 and get my debts paid off in two years. This saved me $100 a month and I would be debt free in two years.
Like I said, after a few payments the account was sold and the last payment never registered with the new company. As I waited for the new company to investigate the missing payment, I kept my payment up with them. They “went out of business” and my account went to another Debt Consolidating firm. My new debt total was way over what it original was and I finally realized I was in a scam. I stopped paying anything to them, but by that time my credit card companies had missed payments from them and I had lost my credit rating.
Remember, none of these companies can do anything more than you can do yourself. Most of the credit card companies have a lower interest payment plan for people not able to pay their bills. The card is no longer valid to spend with and it does show up in your credit, but they allow you to pay off your balance without the large percentage rate eating up your payment.
The “stimulus money” was not handed to these companies to help the little guy get out of debt. It is a fancy way of selling the debt consolidation programs that will cost you so much more in fees eventually than you will save in your payments. There is no guarantees that these companies will stay in business after you make your deal with them. If It Sounds Too Good To Be True – It Is when it comes to the mail, tv, radio, and internet debt consolidation “stimulus money”. They can rob you blind at your most vulnerable time.
References: NY Times