I’m not sure what this says about me, but I listen to a fair amount of talk radio and watch a bit of late night television. There isn’t a day that goes by where I don’t encounter an advertisement demanding my attention if I, “have more than $10,000 in credit card debt.” It goes on to tell me that, because the government bailed out banks and car companies, I am entitled to have my debt reduced by 50% or more.
You only have to make a small leap of logic for this to make sense. Things are tough. The government bailed out some industries, why couldn’t it help citizens struggling with debt? It might seem reasonable, but it frankly is not true.
The companies running these ads all try to create the appearance that they either are a part of the government or are sanctioned by the government. That isn’t accurate at all. They are for-profit debt settlement companies. They can’t help you take advantage of a mythical government program, but they may take advantage of you.
In our experience, the for-profit debt settlement industry is deeply flawed. There are some “companies” that are flat-out scams. They get you to pay their fees up front and then stop answering your calls when it is time for them to settle with your creditors. There are some legitimate businesses in this realm, but we’ve seen their methods fail time and again. Essentially, for these programs to work, your creditors have to never sue you and then be willing to accept a fraction of what you owe in satisfaction of your debts. This sounds great in theory, but rarely works out in practice.
If you’re finding yourself tempted by these ads, we recommend calling a reputable non-profit organization like Lutheran Social Services. Their program isn’t for everyone, but it is legitimate. Or you can always call us. We provide free consultations and will shoot you straight.