Scams, Part Two

It is tough being unemployed. There is nothing harder than trying to live and the bills keep piling up. You want to pay them, but you don't have the money. The mortgage looms each month, and maybe you don't have enough money to pay it. One month is slipping by, and you know you have to find the money, but it isn't to be found.

Then, you hear or recieve an ad for a company promising to get you out from under the bills and renegotiate your mortgage to lower the payment. It seems like it's a miracle. Someone else will deal with your creditors and your life will be easier. Sounds too good to be true, doesn't it?

IT IS TOO GOOD TO BE TRUE! The companies will talk to you for a few minutes, but will very soon ask you for several thousand dollars. $2500. $3,000. $4,000. You can find 'debt relief' companies at every price point, but they all have one thing in common - they all want several thousand dollars to help you. And, they are doing something you can do for yourself. And, yo can do it better than they can.

You can work through a loan modification with your mortgage holder. Mortgage companies have entire departments that work with people to establish new loan terms that can include lower, fixed interest rates, which equate to lower payments. You can contact your credit card companies and work out a payment schedule that pays them off in a few years, or you can get a lump sum pay-off at a discount of 50%+.

What does this mean? This means if you owe the credit card company $1,000, they might well accept $500 for total payment and 'forgive' the other $500. However, our friends at the IRS consider the forgiven $500 income and you will pay income taxes on it. But, it will still be far less than the money saved by settling with the credit card company.

Yo can do all of this for yourself with a bit of time, a few phone calls and patience. You can work out payments with credit card companies in one call. Your mortgage modification will take four to six weeks to complete.

Above all, do not allow yourself to become a victim of one of the growing number of debt relief companies!