Get Out of Debt Budgets™
Why Debt Consolidation, Debt Elimination, and Not-for-Profits Don’t Work
We have many clients that inquire about debt consolidation and debt elimination. These companies generally have huge marketing and advertising budgets to ensnare the unsuspecting and debt weary customer. The simple fact is that many of these companies are scams or are poorly managed, including the ones that are not-for-profit (non-profit). First, let’s start with the not-for-profit scam. The only difference between a regular S or C corporation and a “non-profit” is the filing status. The company is “non-profit,” not the owners and private shareholders. What would you think if the CEO, COO, CFO, and Board of Directors of a non-profit debt consolidation company all made in excess of one million dollars each, every year? Would you consider that non-profit? What if a regular S corporation (for profit) company owned a non-profit company? That’s right, the excess money generated by the non-profit goes to the owner, a for profit company! The FTC has exposed these so-called non-profits, such as the National Consumer Council and Debt Management Foundation Services, funneling funds to a for-profit company. The names are deceptive and it is no wonder that unsuspecting people trusted them, and got robbed in the process. How do debt consolidation companies work? Actually, how are they supposed to work? They take all of your debts and add them up. If the totals of all of your minimum payments on your debts equal $760 per month, for example, they will get you to pay them between $600 to $800 per month plus another $60 each month to manage your bills for you. Because they can negotiate, they call all of your creditors and get them to lower the interest rates, which lowers your minimum payments (you don’t get to see this part) and now the total of your minimum payments are say $550 per month. They keep the $60 each month and put whatever the agreed to amount is towards your debts. They use a computer program to evaluate the fastest way to pay off your debts. Usually in 12 to 60 months you are debt free. Well, if they did it that way. So, how do they really do it? Normally, they just pay the minimums for a few months then stop paying altogether. It takes 6 months before you even know what is going on, and by that time you are not only not debt free, you are deeper in debt due to all of the penalties and interest for the past 9-12 months. You were paying $760 per month along with 200,000 other unsuspecting people and the company is now no longer in business. You effectively paid for more debt, headaches, and heartaches. To be fair, there are a couple of legitimate debt consolidation companies out there that do want to help. We must ask, why would you want to pay $25-$150 per month for the service of paying your bills. You really can do that yourself with a zero base budget and put that $25-$150 each month towards your debt. Debt elimination companies use similar tactics, but are even worse. Debt elimination companies know that after 6-12 months of non-payment on a debt, the credit card company will try to settle the debt. When you hire a debt elimination company, you are effectively giving them the power to pay and/or negotiate your debt for you. So what do they do? They ask you for $5000 up front and take over your unsecured debts for you. They don’t pay them though. Remember, they promised to “eliminate” your debt for a fee. While your debts are not being paid, they ignore the phone calls from the collectors until they are ready to “settle” the debt. This is where you get screwed. Once they reach a settlement, they ask you for another payment (so they can settle the debt) plus another fee for their service. They know that you cannot make another payment or pay the fee, so they ask you to make some payments to them. This never goes to the debt. They will continue to take as much money from you as they can, until you are out of money. Debt elimination is a scam. If you hear the term “no money lent,” RUN!!! You don’t believe it is true? Search the Internet: Debt Elimination Scam, Debt Consolidation Scam, and Non-profit Debt Consolidation Scam. There are thousands upon thousands of sad stories out there of people that fell into these traps. We are sorry, but there is just no quick and easy way to get out of debt. If there were, we, along with the other debt experts, would have found it by now. There is only one way to get out of debt, and all of the experts agree - live within your means, on a budget, and create the cash flow necessary to pay the debt down until it is gone. Our personalized zero base budgets are the standard for quickly eliminating debt. Our personalized advice will guide you through the rough patches, and we know that the best people out there to get you out of debt are your family and YOU! None of us were born financial wizards, and most of us were never taught correctly about money. We are here to help you learn that part of life. Your success is our success. Your financial freedom awaits you. Sincerely, Get Out of Debt Budgets™ Staff
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