Debt Reduction, Credit Card Negotiation, And Your Rights
There is no legal right to debt reduction or credit negotiation if you owe more than $10,000. Any ads promoting debt and credit card reduction are misleading. I hear them all the time on TV and the radio. I get the spam ads on the internet. You have heard the commercials:
- Do you know if you qualify for a personal bailout?
- If you have more than $10,000 of credit card debt you have the RIGHT to settle that debt for a fraction of what you owe, with monthly payments you can provide.
- Credit card companies have been given billions and need to clean their books once and for all and that’s great news for you.
Well, I have heard them too and I spent some time looking into it. If I were generous, I would call the debt reduction claims misleading but I am not so I will call them lies. Each one of those statements are provably false. Congress passed the Credit Card Accountability Responsibility and Disclosure Act of 2009 or Credit CARD Act of 2009. Have you looked at one of your credit card statements and noticed that it now tells you how long it will take to pay off your credit card if you just make minimum payments? That’s a new requirement and a good idea, in my opinion. I took some time to look the Act over. Nowhere does it state that the consumer has a right to have debt reduced if it is more than $10,000. It’s just not there. I am not alone in calling them out. The Federal Trade Commission at their website points out that:
There also is no guarantee that a creditor will accept uncompletely payment of a authentic debt. In fact, if you stop making payments on a credit card, late fees and interest usually are additional to the debt each month.
I have literally dozens of clients that have hired me after they have tried one of these debt negotiators. The stories are all the same. They are told not to hire a lawyer and to stop making their credit card payments and start making payments to the debt negotiator. When the credit card sues for nonpayment, the client calls the debt negotiator who tells them that they aren’t lawyers and the client needs to hire one. What?! I thought they didn’t need a lawyer. These negotiators charge too much, do too little, hide the facts and mislead the consumer. I feel really bad the clients that have hired me after they used a debt negotiator.
Most people really try to pay the creditors back and are just looking for help. They believe the debt negotiator because they want to believe this is a realistic option only to find out that they are being taken advantage of. It’s a shame because there is help for someone overwhelmed by debt, just not with these negotiators. We don’t negotiate debt. We eliminate debt. I don’t call one creditor and ask them if they would consider a payment plan or no interest for a while. We use the powerful bankruptcy laws to put you on equal footing with a creditor, no negotiation necessary.
To learn more about bankruptcy, please take some time to visit my website at: Downriver Bankruptcy.