With the current economic strain, many have turned to using their credit cards to cover their basic needs. This has led to a massive increase in the number of individuals who are saddled with large sums of credit card debt. The economic stimulus plan provided by the government has led to a lot of confusion, and has led many to believe that there are actual government programs that will help them pay off or eliminate their credit debts. Unsolicited emails and countless websites claim that you can get government help to reduce or eliminate your credit card debt – thanks to the government – if you have more than $10,000 in unsecured debts.
Too good to be true
You can keep looking, but it just does not exist.
The rub here is that this is not true. There are no government monies that have been earmarked for the express purpose of helping citizens pay off their debts. These ideas prey on the vulnerable, those who are stuck in debt with no end in sight, and leads them to having false hopes about their credit future. Sometimes, people find themselves even more in debt, as they pay upfront costs to agencies who claim they will help the people obtain government monies to reduce their debts.
The paradox of the minimum monthly payment
For those who can only make the minimum monthly payments on their credit card debts, getting out of that massive hole can seem impossible, and in some ways, while not impossible, it is something that one will be paying off for most of their life. And $10,000, as our example, is not an unheard of level of debt, there are many who are saddled with much more than this. Depending on your interest rate, if you were to simply pay the minimum monthly balance on your $10,000 debt, it would take somewhere between 20 and 30 years to pay off. That is like a mortgage! It is easy to see, that when faced with this debt, that many are so overwhelmed that they will even believe something that seems too good to be true.
There are government programs that aim to help those mired in debt
While many misunderstand the programs that are laid forth by the government, thinking that there are programs where the government will pay off your debt for you. Sadly, there is not. However, there are some programs that are there to assist you. Recent legislation has been passed that helps to aid in the transparency of, and reduce the predatory practices of credit card companies. There have been caps put on interest rates and fees, which would balloon a debt to massive proportions, very quickly.
There are governmental and private agencies that offer credit debt counseling services. Many of these agencies have the ability to act as a liaison between you and the credit card company, often negotiating a settlement deal or payment plan that gives you the ability to pay off your debts, while not continuing to incur more. Not only can these credit counselors assist you in negotiating with your credit companies, they can also help you create a manageable and workable financial plan that can help you get out of debt faster than you thought possible.
Watch out for scams
Unfortunately, there are many out there who will prey on vulnerable people who are saddled with debt and have no way out. These companies are generally looking for one of two things – your personal information, so they can see it to other agencies, or to get upfront fees for providing you a “service” that does nothing to reduce or help you get out of debt. A rule of thumb is, no matter what your situation, or how dire it may seem, if it sounds too good to be true, it probably is. Do not give any personal information to a company without first checking them out. Be wary of anyone who asks for upfront payment for debt relief services, reputable agencies do not do this.
Final Word
It is sad that, even in this day and age, preying on the vulnerable is still far too common. While the government does have programs and mechanisms in place to help, they do not offer monies that will pay off your credit card debts. Those who say otherwise are either scammers or misinformed. You can reduce your debts and find a workable way to manage your finances, but it does not come from a pie-in-the-sky idea of “free money” to pay off your debts. It requires you to work with your creditors and allow them to work with you; to create a financial plan that will allow you to work yourself out of your debt burden and get on the road to financial freedom.
