Debt Counseling 101 Look Before You Leap

Honey, The Bills Are Piling Up!
Ever felt like this? “Help! I'm strapped with debt and I can’t seem to get out of this mess…” If you are facing a stack of bills and mounting pressure from debt collectors and don’t know what to do, many people will tell you that the solution is actually quite simple. They advise you to get professional debt counseling. A quick check reveals there are innumerable sources that provide debt counseling…

Taylor & Lindsey Are In Debt And Need Help Fast!
Although there are literally countless debt counseling companies and agencies, they are not all created equally. As a matter of fact, it is important to note that some of them don’t even look out for your best interest. Of course, you want to immediately identify and avoid those types of companies right off. When Taylor and his wife Lindsey spiraled into a financial crisis, like a many Americans they were unprepared for what was about to follow. Both of them worked in the real estate industry. Taylor brokered loans and his wife was a real estate agent. 

When the market tanked in their area, their income took an immediate dive. They both got new jobs but at considerable pay cuts. The two trimmed expenses everywhere they could and in many places they couldn’t, but the bills just kept piling up. When they started receiving the debt collection calls and dunning debt collection letters, they agreed they had to take action and fast.

Not knowing which way to turn, they chose a debt counseling company they saw heavily advertised on television. It was the worst decision they could have made! Like millions of people who watch TV, they falsely believed if its on TV, it must be legitimate. They called the number on their screen and made an appointment to meet with a debt counselor. From their perspective, the meeting went well, but little did they know they had just signed up for a debt counseling rip off.

What’s Up With The Up Front Fee?
They should have seen this coming but the debt counselor who was really nothing more than a glorified sales person was silky smooth. So much so that Taylor & Lindsey didn’t even flinch when they were told they would have to pay an up front fee of $1100.00. Wait a minute? Duh? How is an out of pocket expenditure such as this going to help anyone strapped to the hilt with debt? This couple signed that lopsided agreement because they were desperate! Remember this: the first rule of thumb when you need debt help is to proceed slowly and look before you leap.

The Bold Print Giveth… The Small Print Taketh Away
The agreement they signed made it crystal clear, (in very small print of course) that none of that $1100.00 was going to reduce any of their debts. Furthermore, the company tacked on additional processing fees to each payment. Like many debtors, Taylor & Lindsey believed this company would negotiate with their creditors and pay their bills as they paid the company. How wrong they were!

They kept receiving statements from creditors that included more charges, late fees and penalties. In the end, that quote debt counseling company was eventually shut down by the FTC due to numerous complaints by customers. Prior to making a decision to go with debt counseling, the first thing you need to do is come to a clear understanding as to what debt counseling really is.

William Phillips brings a degree in economics and an unwavering passion to help fellow Americans come from under the clutches of debt. He believes that with the right debt advice or debt counseling, anyone can recover from the stresses of being overwhelmed with credit card bills and other debts.