Financial Resource

have even have a chance to successfully wipe clean their unsecured debts (though it would also mean basically erasing the entirety of their possessions).

Because Chapter 7 bankruptcies do still remain a threat to their eventual bill collection, the credit card companies help fund the Consumer Credit Counseling companies so as to convince hapless borrowers to maintain and try to repay their loans, albeit in a different form. There are benefits to signing up with the program, to be sure. Interest rates are lower (not that they could actually be higher) and many of the creditors will agree to waive some of the fees assessed from over limit accounts or payments that arrived too late. However, considering the amount of money Consumer Credit Counseling professionals would charge for the opportunity – and, also, keeping in mind how damaging the Consumer Credit Counseling approach would be to the prospective client’s credit ratings once entered – most every applicant should be able to search out a better route to debt management success.

Debt settlement is another form of debt management rising in publicity the past few years, and these types of companies have many similar features to Consumer Credit Counseling firms. Both industries, after all, ask borrowers to sign over their collected debts (once again, primarily those unsecured ones which would be affected by bankruptcy protection). The debt settlement industry, however, does have a national certification program with which borrowers may rely upon to ensure that the people that they are dealing with could be properly trusted. Furthermore, since the underlying principles behind debt settlement thoroughly guarantees that there will be no collusion between the debt management professionals and the credit card companies, consumers do not have to worry about their counselors serving two masters. With debt settlement, the specialists working upon the specific case maintain an adversarial (though, as you’d imagine, still friendly for business purposes) relationship with the credit card companies so as to negotiate a reduction of their clients’ total balances. The debt settlement representatives have no reason to ever do anything more than work for the debtors’ best interests. That’s the only way their careers and the industry as a whole will survive and thrive within the new economic realities.

No matter the foundations of the debt settlement industry’s guiding principles, however, there still exists (as always will, with any possible employment opportunity) desperate scavengers aiming to take advantage of their clients’ ignorance and neediness regarding complicated financial matters. As we have said, these few practitioners of economic scams are found sooner rather than later and let go, but borrowers must always be wary of any debt management specialist that insists upon his or her fees paid up front. Initial consultations, by industry standard, should always be free of charge. They are, after all, trying to impress the clients with their professionalism so as to win their business, and it is highly suspicious that they would ask for money before they have even begun to do their job. Debt management must garner the trust of both the debtors and the creditors. Do not take the advice of anyone that you believe would be purely out for the quick buck.

For that matter, there are also any number of less than legal financial ploys that may sound like normal business practices but, in actuality, would leave the borrower open to charges of fraud. In the same way the malfeasant loan officers may urge homeowners to go with appraisers promising to pump up home values to tens of thousands of dollars more than the properties are actually worth or fool with pay stubs and tax records to suggest greater gross incomes than the true earnings, some debt management professionals might even advice that their client ask for a different Employee Identification Number. The purpose of altering Employee Identification Numbers is purely to trick lenders into disregarding credit report information and would be thought of as highly fraudulent behavior punishable by the fullest extent of the law. Before signing off on any such activity, make sure that you contact an attorney or – at the least – read up on the consequences of such actions. Whatever minimal savings may result from these sort of tactics are hardly worth the legal struggles that may ensue.

All of these warnings are not meant to turn prospective borrowers away from the good that proper and law abiding debt management counselors could do for household dearly in need of debt relief. The overwhelming majority of specialists working in these fields obey the strict letter of the law and, even beyond that, the specific rules of their chosen field. Most debt professionals enter the industry because they enjoy helping borrowers climb through the thickets of debts and find a better life for themselves and their families. Do not assume, just because of a few bad apples, that debt management specialists should be considered suspicious solely because of the nature of their work. As with any profession – from mechanics to congressmen – there are always bound to be a few brigands only out for themselves, but, with careful study of their company and a close reading of precisely what they are attempting to do, it is not that difficult to figure out which ones you should trust.

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