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February 11,2009

  • Enlisting Reputable CC Help, Pt.3
      Green/Yellow/Red Lights.

    Previous...

    Making the decision: After carefully investigating the repute of your prospective credit card debt councilor, start on gathering details of what each offers.

    ‘Green light':

    • Free: ‘Free' is not suspect here as long as it's genuine. ‘Free' is good for most people because of the many dedicated professionals who really care (hopefully, you've already checked with the BBB). It's generally easier to get out of credit card debt when not adding another creditor in order to do so.

    ‘Yellow light':

    • Risky Promises: When someone casually puts you at risk, don't take comfort in their confidence. You're the one at risk, not them. If they advise you to stop paying your obligations, like credit card debt, be leery. Some times this tactic works but, sometimes it backfires. While it's true that many credit card lenders are forgiving from 20% to 70% of credit card debt, there are strings attached. You can also be liable for ruined credit as well as garnishment of wages, financial assets and even your household belongings (like jewelry).

    • Unrealistic Promises: Without spewing another cliché, we all know hat that means. When you are promised a 50% reduction in your credit card debt, be wary. This is almost an impossible guarantee. When you are promised a reduction in payments, this is more plausible but may result in an undesirable side effect (like higher credit card interest or direct withdrawals from your bank account). There is some viability here though, so make sure you understand the commitment you're making. It may be okay.

    ‘Red light':

    • Money-back Guarantees: When you hear this, be warned. There are so many hoops and hurdles in this process, you may need an attorney to collect. When someone else writes the contract, they pretty-much own it. Anyone who been taken this route already knows. Many companies enter into fictitious agreements on purpose knowing that, when the deal goes sour, they will still come out ahead. So, don't give enough credence to this claim to base your decision on it.

    • Up-front Fees: In many states, it's illegal to require fees prior to service for financial and credit card planning. There are almost always better alternatives to this route.

    Continued...
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