Is Debt Consolidation the Answer?
Credit Card Companies Love Debt Consolidation
Credit card companies are not doing you any favors by financing these "non-profit" debt consolidation companies. Debt consolidation is a very, very good deal for the already bloated credit card companies. They get their payment in full, plus interest. This is one major difference between our debt settlement service and their debt consolidation program. Our debt settlement relieves your debt for 40% to 60% of the existing balance while debt consolidation just simplifies your payment plan.
Debt Consolidation is an Enormous Industry
Debt consolidation is HUGELY trendy today, and everyone and their uncle is trying to jump on the bandwagon and make money. At this writing, Google's number one ranked website for the term "debt consolidation" is not even a debt consolidation company, it is a lead broker website (Google is not infallible). A lead broker tricks you into entering your phone number and personal data and then they sell it to a company in the debt consolidation industry.
False Debt Relief Claims?
The above cited website in particular makes the claim that "One successful consolidation program lowers debt amount by abolishing financial charges and interest that has been accrued." If that is indeed the case, then tell us which company! This website made a statement about "One successful consolidation program" without telling us who runs that particularly outstanding debt consolidation program that can eliminate already accrued credit card interest!
This website goes even further in attempting to collect your personal data. They misrepresent exactly what debt consolidation can accomplish in terms of reducing your existing debt. In other words, they are lying. "Why are the creditors willing to negotiate?
Once the creditors come to know from the counselors that you have signed for debt consolidation, in most cases the debt amounts are reduced to a mammoth 40% - 60% and there is complete elimination of late charges and limit charges. The amount of debt reduction usually depends on how well the credit counseling firm could negotiate with your creditor. It also depends on the good will and reputation of the firm you are linked with. It also depends on how far the creditors trust them personally. We are the leaders in debt bargaining and our reputation is commendable nationwide. Your account is re-aged to show that you are updated and regular with your payments."
To our knowledge, none of the debt consolidation companies reduce your existing debt. They may lower your interest rate on the total amount, but they still just consolidate your payments, take a monthly check from you, and then make those payments for you.
False Claims of Credit Repair
The debt consolidation companies take control of your finances much as a parent would reign in a willful child. They speak of this as if it actually liberating, as if it frees you from the responsibility of paying 5 or 6 different credit cards each month. Perhaps making one large payment to a third party appeals to people who may be very disorganized, but this is Third Party Assistance and will be marked on your credit report as such. A TPA on your credit report is not a good thing and will very negatively impact your credit rating. It is hard to spin this enough to turn it into credit repair.
Debt consolidation companies claim that they'll be able to lower your interest rate on the consolidated debt. If you have 5 credit cards with interest rates ranging from 18% to 8%, they claim they can lower your overall consolidated rate. Oh boy! perhaps you'll get out of debt in 5 to 7 years instead of 10 to 12 years.
Johnson Law Group's Debt Settlement is able to help the consumer achieve true debt relief because we negotiate with your creditors on your behalf and lower the amount of money that you owe. Our average settlement, based on our history and industry trends, is for between 40% and 60% of the existing balance.
Finally, when you've paid off your debt through our Debt Settlement plan, your report is marked as "Settled with 0 Balance" instead of TPA (Third Party Assistance).
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