Why Many Debt Relief Programs Fail

While the credit crisis is crippling many businesses, there are a few that are booming right now.

Debt consolidation, credit card counseling, and even some banks are cashing in on consumers who have been fighting a losing battle trying to keep up with repayment of their debt.

While most of these businesses are designed to “help” consumers get out of debt, they do so not out of the goodness of their heart, but instead for the fees involved by joining their programs.

However, there is a huge failure rate among many debt relief programs and it is not necessarily as obvious as one may think.

Would you like to take a guess what the cause is?

If you guessed, the previous mentioned fees, or interest rates you would be wrong. Perhaps the fact that a big percentage of the companies offering these services are scammers who are not interested in helping you instead they are interested in pocketing your money and then letting you fend for yourself? Nope, sorry, again you would be wrong. You get credit for having good guesses, and I’m sure that some of those issues certainly attribute to people failing to get true debt relief.

It would seem obvious, but people entering a debt relief program are generally at the end of their rope in terms of financing. Perhaps they have fallen behind on payments or if they haven’t, they soon will. When someone finds themselves in this situation, there are not a lot of options.

One Fixed Payment

The stress and fear of being so far in debt, added to the knowledge that no matter how hard you try you don’t see a way out, makes it easy to sign up for the first program that offers relief of any sort. However, in most debt relief programs, you will go through an application process and if accepted you will have one FIXED monthly payment. Fixed, as in it stays the same all the time. If you miss work due to your child being sick, you do not get to lower your payment.

If your furnace breaks and you need to repair it for winter, you will not get a break on your payment. By having a new, even lower fixed payment, you are still setting yourself up for failure. Life is not fixed. Most of us do not earn exactly the same amount each month, nor do we have exactly the same amount in expenses.

So for a person living literally from paycheck to paycheck, an unexpected expense can throw their debt relief payment out of schedule and next thing you know, you’re on your way to trouble with the new program, as well as your creditors.

Debt Relief With Flexibility

If you are looking for debt relief, and want some flexibility in your payments, you may want to consider debt settlement. This program is an entirely different animal that debt consolidation or credit counseling. You will want to research the pros and cons of all programs before settling on one, but if a flexible payment is on your list, you will find that is more likely an option with debt settlement programs.

For anyone suffering the financial, physical, and psychological effects of living in debt, it is important to take the time to face your fears and develop a plan. Regardless of what avenue you take, the most important thing is to educate yourself, do your research and don’t be afraid to ask for help. You can change your situation and the sooner you start, the sooner you can take control of your life again.

Comments

  1. First and foremost when you’re on the decision of getting a hand on companies that provides debt relief programs. You should see to it that it’s a 100% legit. All programs are good, if you’ll just follow right through it. I know how stressful to be in debt but you must have the obediendce to follow. Don’t miss the steps. On my opinion many companies have fail because of the kind of goal they have, not on how to help you get out or settled it. But on how you could pay them. On the lighter side, there are compaines that doesn’t go after on how much you would pay. But they will let you get what you paid for. This blog is interesting, gives a lot of people who are in debt a wise decision to make. Thumbs up!

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