Can you afford such and such (figure
withheld)? It will come out of you account on a
regular monthly…..oh and by the way, should
there ever be an occasion that you have a
problem with the monthly payment, call our
Customer Service Hotline where we will be only
too happy to advise you what happens next.”
“Debt Consolidation”. Wow what a great phrase.
Great, wonderful, fantastic, all my financial
problems solved in one easy telephone call. Now
I can look forward to the Postman arriving
without dreading the contents of the next
envelope!
Or can I?
The above scenario is played out across
countless homes in countless cities where the
promise of an easy fix to a nightmare situation
is actually quite an easy sell.
Well why wouldn’t it be?
After all, on the one side you have the witless
and shell shocked creditor who is scared out of
his mind that he (or in a growing number of
cases she) are about to lose their livelihood,
homes and everything. On the other a smooth,
fast talking telesales rep that is now promising
to deliver what had hitherto seemed like the
Holy Grail.
Except for the fact that in a growing number of
cases these so called, Credit Repair Debt
Consolidations are actually doing more harm than
good.
First of all sadly there is no such thing as a
free lunch – or in this case a deeply
consolidated and discounted one. Everything has
it’s price and in these cases the price is
usually hidden in the small extremely fine print
that was alluded to in the telephone call as the
subject that would be dealt by the “happy ever
present, effervescent, Customer Service Rep”.
This, my formerly scared and now ensnared friend
is where the fun really starts.
Imagine the following scenario; things have gone
well in the first few months; payments made on
the button but suddenly for whatever reason the
well has gone dry. Now this could be for a
number of reasons, after all a leading charity
for the Homeless has gone on record as saying
that basically we are all “within a few missed
pay checks of being made homeless” but in your
case that’s it, no cash to make this months
payments.
Suddenly the “effervescent, Customer Service
Rep” is now cheerfully informing you that as per
the terms and conditions of your agreement,
there will now be a late payment, penalty charge
levied that before you know it has now meant
that it has to be cleared before you can resume
your instalments and now before you know it you
are now sliding further and further into debt
again.
Finally if these are not met then the
whole arrangement is now null and void, your
creditors (who probably have still not received
a penny) notified and that in all due
circumstances Bankruptcy proceeding will follow
against you.
Bang, hello reality, welcome to the real world
again.
Now I know that the above scenario may seem an
extreme case (though sadly not too far fetched)
but it is very much a case of “buyer beware”
when it comes to Debt Consolidation and Credit
Repair. My own personal preference if you wish
to go down the road of Voluntary Bankruptcy or
IVA route is always to go to the “glassy eyed
monster” type of Insolvency Practitioner who
give you a real hard time before taking your
case before the Bankruptcy courts and being
appointed your Insolvency Supervisor. After all,
if they scare you, imagine what they will do to
your creditors!
And the real bonus? They’re on your side and if
you keep in close contact with the communication
channels open then they will always try and be
as flexible as possible and look after your
interests as well as that of your creditors.
After all it is their interests as well as yours
to reach a successful and happy conclusion.
|
|
Latest News and Articles |
| |
|
Debt
diary: Race against time......more info |
|
|
|
Britons face 'lifetime of debts'......more info |
|
|
|
OFT
wins credit card cover appeal...more info |
|
|
|