Do those Ads that Promise to Show you how to get Out of Credit Card Debt Mean Anything?
When you see those ads that scream for your attention you want to just go out and at least try them. When they say to you that you just need to give them a chance and they'll show you how President Obama made provisions in his stimulus plan to help you settle your credit card debt for pennies on the dollar that the banks want to keep from you, could it really hurt to go try them out? People want to not believe in a con; not even in the privacy of their own minds, not even for a second. And still, there is the wistful hope that there might be something here. If only someone could show them how to get out of credit card debt for free; if only there were something the government could do to wipe the slate clean, and give them a fresh start. People usually only tend to regret the mountains of debt they amassed depending on a job they lost or something, once they are over a barrel. The need to believe that there could be something that could wipe the slate clean can be overpowering.
Straightaway, it's easy to set the record straight right now - there is no "get out of debt for free" ticket. Life never does throw us a line like that. So are those ads just plain lying? Isn't there a grain of truth even to them? Well, no. Why should creditors even want to do something like forgive your debt for pennies to the dollar? What people imagine is going on around here is that the creditors know that they're dealing with deadbeats, and they know that there isn't any money. So they would rather collect 10 cents to the dollar, than no cents to the dollar. Well, there's just one little wrinkle to the situation. Creditors don't look at your situation satisfied that you can't pay, until you're living on the street with nothing more than a newspaper between you and the snow. These aren't reasonable people, and they aren't going to accept anything less than full payment until they're sure you have absolutely nothing. If it wasn't like this, everybody would know how to get out of credit card debt.
So what is it that they're offering in those ads? What they're offering most of the time it is merely debt settlement. The settlement company enters into a deal with you, so that you pay a certain small amount once a month or so under contract. Once your monthly deposits add up to maybe three-quarters of the credit card debt you have, they go and give it to your credit card company. However, even this is a little too optimistic picture of the situation. The debt settlement company doesn't do this for free, you know. They charge a nice healthy fee for their "services" showing you how to get out of credit card debt that they take out of your deposits. And while they are taking their fees, and you are taking your time building that deposit up until it is large enough, the credit card company isn't quite willing to give up just yet. They won't be satisfied that you can't pay, until they pound you with nasty letters and summons for at least six months. Getting settlement, isn't really a final heave-ho to the old credit card company. And while they tell you how to get out of credit card debt in this way, they aren't really caring about what all of this is doing to your credit rating.
The whole six months or so you take building up your lump sum with a debt settlement company, the credit card company is busy tearing your credit score to shreds reporting everywhere they can think of. And that's not all either - let's say that you have $1000 forgiven in the whole debt settlement process. The IRS now will knock on your door, and say that they believe that you just made $1000 for free, and they will want their cut. The debt settlement industry isn't a well-regulated one yet. Finding one that really works for you, is easier said than done.