Avoiding the hidden pitfalls and traps of certain types of Debt Consolidation
“It’s very easy sir, we can help with debt consolidation in a number of ways. We can help you avoid Personal Bankruptcy. Let us know exactly how much you owe, who the debts are to and for a fixed fee we take care of all of the rest. We can help you consolidate your debt into manageable proportions. Your credit record will start to be rectified the moment you put down this telephone. Can you afford such and such (figure withheld)? It will come out of you account on a regular monthly…..oh and by the way, should there ever be an occasion that you have a problem with the monthly payment, call our Customer Service Hotline where we will be only too happy to advise you what happens next.”
“Debt Consolidation”. Wow what a great phrase. I can now get out of debt! Great, wonderful, fantastic, all my financial problems solved in one easy telephone call. Now I can look forward to the Postman arriving without dreading the contents of the next envelope!
Or can I?
The above scenario is played out across countless homes in countless cities where the promise of an easy fix to a nightmare situation is actually quite an easy sell.
Well why wouldn’t it be?
After all, on the one side you have the witless and shell shocked creditor who is scared out of his mind that he (or in a growing number of cases she) are about to lose their livelihood, homes and everything. On the other a smooth, fast talking telesales rep that is now promising to deliver what had hitherto seemed like the Holy Grail.
Except for the fact that in a growing number of cases these so called, Credit Repair Debt Consolidations are actually doing more harm than good.
First of all sadly there is no such thing as a free lunch – or in this case a deeply consolidated and discounted one. Everything has it’s price and in these cases the price is usually hidden in the small extremely fine print that was alluded to in the telephone call as the subject that would be dealt by the “happy ever present, effervescent, Customer Service Rep”.
Suddenly the “effervescent, Customer Service Rep” is now cheerfully informing you that as per the terms and conditions of your agreement, there will now be a late payment, penalty charge levied that before you know it has now meant that it has to be cleared before you can resume your instalments and now before you know it you are now sliding further and further into debt again. Finally if these are not met then the whole arrangement is now null and void, your creditors (who probably have still not received a penny) notified and that in all due circumstances Bankruptcy proceeding will follow against you.
Bang, hello reality, welcome to the real world again. It is very much a case of think before you start the wrong type of debt consolidation
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