When it Comes to Debt, Act Early
Here is a cautionary tale as told by Todd Christensen, Director of Education at Debt Reduction Services and author of the popular Everyday Money for Everyday People book. This story is an excerpt from a chapter that is dedicated to discussing third party debt relief and is definitely worth taking note of.
I happened to be walking by the front desk at work one day last year when a senior couple walked in, all but frantic about their debt situation. They felt so overwhelmed by some medical and other debts they had, so they responded to an ad promising to help them get rid of their debts by only having to pay half of what they owed. The company may even have been a nonprofit debt settlement company. The company’s representatives called themselves debt counselors and were nice and obliging on the phone. The couple set up a monthly payment that went to the company and then, at the urging of the company, sent letters to all of their creditors not to contact them anymore.
It had been eight months since those initial phone conversations, and they had just found out that the company had gone out of business and had no money left in their account to return to this couple. All of that money was essentially flushed down the toilet.
The couple came to us hoping we could help. Eight months prior, we likely could have, but their debts had grown so large, and it had been so long since their creditors had received a payment from the couple, they were no longer willing to work with us. Unfortunately, the couple’s only option left was to file for bankruptcy.
It’s frustrating when we meet with such couples and individuals in their golden years who have been given terrible advice or who have just plain been scammed out of their nest egg.
Again, take this from a credit counselor’s point of view, but the sooner an individual or couple can meet with a credit counselor (for which there should never be a fee), the sooner they can receive proper advice and guidance on the practical and realistic options to them.
For more information on personal finance related topics such as the one above please contact Debt Reduction Services, a nonprofit credit and debt counseling organization at 1-877-688-3328 or visit the following link to purchase your own copy of Everyday Money for Everyday People on Amazon.