Debt Elimination Programs: Can They Reduce My Debt?

Written by admin on May 17th, 2011

Debt elimination programs. Is it true that these debt elimination programs can eliminate all my debts? Yes, they can, but beware, as they can also do more damages, than getting your out of debts.

There are many cases where desperate debtors especially those with unsecured obligations like credit cards, often lose more money than they originally owed.

Of course there are legitimate operations, but the debt elimination industry is littered with too many scams. Personally, I’ve noticed that most of them have a few common traits.

Their claims are true. But they do not tell you the whole truth. Normally, the company will instruct you to stop making all of their payments. They negotiate with your creditors with a good reduction on your debt. But at the same time, they also screw up on your credit report and credit score.

In future you have to pay higher interest rates and have a much difficult time obtaining credit, such as car loans or mortgages.

Another problem is most of these debt elimination programs charge a hefty fee even for a simple debt consolidation. Be wary, you might end up paying higher interest rate for your consolidated debt. Remember no debt elimination program can solve your financial problems right away.

I do notice that all these debt elimination programs employed the same few methods which you can even do it all by yourself for free. For instance, setting up a debt repayment plan and calling up to negotiate with debtors.  

As we know these debt elimination programs are targeting specifically at folks who are desperate and lost in their financial mess. They don’t know where to seek help and now here is a special service which promises to get rid of their debts once and for all.

These debt elimination programs can offer a plan to help you to get rid of debt, but it is expensive; both in terms of cost of the service and the hidden costs which many might not realize now, such as the negative effect on your credit report as mentioned above.

My suggestion is try to solve debt problems by yourself first. If you still need help, seek out from people you personally know. And if you are still having problems, then it is time consider some professional help. For a start, look for a non-profit credit counseling service.

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