It started innocently enough, my 26 year old son asked me for his credit card statements. I saw him on the phone and asked him who he was talking with. He told me it was a company who could reduce his credit card debt. Now my son is a university student, does not own a home and has some student loans and some credit card debt. He has perfect credit. Of course, a program which could help relieve his debt load was alluring and he was sucked in. Horrified, I immediately told my son to hang up the phone. Well of course, with a prospective sale now in the dumper, the debt specialist asked to speak to me. That was a big mistake because I told him his so called debt program was ruining people’s lives. He went on about foreclosures in the US and how his program helped people with big debt load, adding my son with no income could not afford these high interest credit card payments. I think that’s when I asked him how he could sleep at night knowing the financial harm he causes his clients and I added some other choice words.
You see these debt reduction ads are splashed over the TV, radio and print. And now they are telemarketing, trying to find new victims. They are relentless, calling several times a day with messages like call us, ‘if you would like us to negotiate lower rates on your credit cards’. They promise to reduce your credit card rates and get you into more affordable payments. These debt programs are a ‘ruse’. What they don’t tell you is that it will take years for your credit to rebound because the program destroys your credit. They don’t tell you that the reduced monthly payment you agreed to make is paying your commission for years. They don’t tell you, you have to pay this large commission in full if you want to get out of this program. They don’t tell you that no lender will look at you for a mortgage while you are in this program. And they don’t tell you, you will have to pay that commission off completely which will amount to thousands over 3 to 5 years and still must re-establish good credit for 2 more years before any lender will even consider you for the good mortgage. That’s a minimum of 7 years with someone like myself coaching them what to do.
We know so many people whose lives have been ruined by these slick ‘debt cousellors’. We had one client with perfect credit but when her husband lost his job, she got scared and believed these people were going to help her. She cried when I told her what they had done to her credit and how we would have to wait until this debt was repaid before any prime institution would look at her application. My son, could easily have been a unknowing victim had I not been here. The debt program would have ruined his credit card rating and he would not have been able to buy a house for years. He will repay his credit card debt when he finds a job as an electrical engineer. I still don’t know how these ‘debt counsellors’ sleep at night! Warn everyone you know about them especially your grown kids.