Debt Relief Debunked

bulram | April 28, 2012

Debt Relief Debunked

Are you lost in the maze of information about debt relief? Confused about what it can and can’t do to help you? You’re absolutely not alone. Sometimes getting the facts about debt relief seems to be the hardest part of the process. There are a lot of companies out there who deal with debt, and sadly not all of them are upfront about how it all works. Whether you’re just starting to investigate or have already made up your mind to get help on your finance and car insurance Alberta, knowing fact from fiction makes all the difference.

MYTH #1: All debt relief is the same, so it doesn’t matter what I choose.

While it would be great if this was true, it isn’t. Credit counseling is not actually a debt relief program: rather, it’s a system for educating people about budgeting and debt repayment. A debt repayment plan, however, is exactly what it’s called: an actual system you work out for taking a portion of your income for a debt relief organization to distribute to your creditors. Make sure you ask about all the available services when you contact a debt relief agency to make sure they can help with your personal situation.

MYTH #2: I’ll just go sign up, and the debt relief company will solve all my problems fast.

In a perfect world, that could possibly happen. But in reality, you must always be wary of a quick fix. If what a company claims they can do, like wipe away 90% of all your debt in a few months, sounds too good to be true, it is. Some companies add hidden fees or have a “standard” service charge, and others may flat out mislead you and get you into an even bigger mess. Check every organization out thoroughly for accreditation and good standing before you sign anything.

MYTH #3: Debt relief will wipe my slate clean and leave me with no debts at all.

This is definitely not true. Debt management only covers unsecured debts, such as personal loans and credit cards. Other expenses like mortgages and car payments are not included. Student loans are also a horse of a different color, and usually separate arrangements have to be worked out for reduced payments or deferments of those. Make sure you have a list of all debts, the amounts, and how late you are on any payments to give to a debt relief counselor.

Visit www.Kanetix.ca to read more of Tony LaSarge’s articles on saving money and reducing your expenses.