February 13, 2008
The dangers of credit counseling and debt counselor scams
Credit counselors take a payment from you every month. Then they take an amount off the top for their fee. Then they pay the balance to your creditors.
On top of it, these credit counselors are often "non profit" which is a big scam. The owners get huge paychecks. Slightly off the subject, but one principal in a "non-profit" loan company around where I live was building a golf course! I know of a credit counselor who owns a mansion on the waterfront in Florida.
So moving along, let us ask the question, why should you use credit counselors?
Supposedly, a credit counselor will go in there for you and negotiate on your behalf. But the reality is very different from "supposedly".
- They do not negotiate your principal down, only your interest.
- They are in bed with the credit card companies. Their computers often talk to each other.
- Credit card companies already have standard interest rates they give to people who ask for it and who have stopped paying. (If you are still paying on time, they won't lower your rate. But if you stop paying, they will!)
- On your own, you can negotiate lower credit card payments but more than that, you can get principal reductions!
Take the story of Steve from Ventura County, California, one of the owners of my Mortgage Relief Formula.
Steve's business turned down because of the real estate decline and he fell behind. He used the methods in my Mortgage Relief Formula home study course to negotiate with his credit card companies.
Now here is what Steve told me and this is completely 100% true and accurate:
Richard's course also has great help on credit cards and I know that creditors can't threaten me anymore. The CDs have some great information about credit cards. You can negotiate. This tells you how.
This course is perfect. There is nothing like it especially if you are in the real estate business. This course tells you everything you need.
And now I am doing my own debt negotiation. You don't need anyone. I am saving thousands of dollars. I think this is a win-win deal. The price is nothing compared to what you get out of it.
I just got off the phone with a major bank that I owe money to. I owed $12,000 and they cut my debt to $6,000. I said "you give it to me in writing, and I'll pay you each month." I have a written offer and got 50% off my debt just by following the information in Richard's course.
My methods can let you drop the amount you owe by 20%, 50%, or even 80% or more. Just as Steve has done.
No reason to use scam credit counselors. And if you are afraid to talk to the credit card companies, just use the mail. You have the right to tell them not to phone you and you can negotiate it all by mail. Even get them to report favorably on your credit after a year. So your credit may be bad or worse for awhile, but then it will improve!
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1 Comment on The dangers of credit counseling and debt counselor scams »
March 6, 2009
Charlene Croal @ 1:37 pm:
Dear Richard Geller: I am seeking advice from you regarding selling a home that has mold and structural deficiencies that do not even meet local building codes for zoning or building codes. We are currently in a lawsuit on the home which previously was our primary residence, and since purchased another home due to the length of time that this case has been as well as providing our family with more stability. In October it will be coming on 4 years since the first incident occurred that started the investigation on the house, and this has been a very long and exhausting effort financially and emotionally for us maintaining 2 homes and paying for the lawsuit. I have been successful with the mortgage company in allowing a forebearance on the "mold" home and stopping our mortgage payments completely. Due to a substantial loss in income, we no longer could afford both house payments. In addition, I have also been successful with modifying our current mortgage to allow for 3% interest on the first from an interest rate of 6.69% and allowing 7% from 9.9% on the second mortgage on our current residence. It took about 8 months of consistency and an email to the VP of Customer Relations at GMAC, but we were finally successful. I am seeking advice from you regarding the "mold" home. Even if we win the lawsuit, due to the current laws in the State of Minnesota we will not even have enough money to repair the home because a large portion for attorney fees will have to be deducted from the lawsuit, 33 1/3% minus the $15,000 that we put down as an initial retainer to recoup under the Homeowner's Warranty. (the home we had built in 2000) Typically, how are cases such as ours handled with the mortgage company when trying to reach an agreeement of short sale? Are there other options or avenues that we should travel in order to reach an agreement. We are in over our heads with this lawsuit, and if I could make the choice again, I would NEVER have filed a lawsuit; I would have taken a step forward lost all the equity in the house, and started over. The value of the home sits about 20k, but I have found NO realtors that would even take the liabilty to sell the home "as is" because of the extent of damages that need repair. In 2005, the home was valued at 280k, and now if there were no problems with the house the value sits at 190k. Any suggestions? We do have a first and second mortgage on the house. Sincerely, Charlene Croal
Hi Charlene, wow, I am sorry to hear this story.
I would definitely try for a short sale. If the house is priced low enough it should sell. I am sorry you couldn't have found a lawyer who would take this case on contingency. If a plaintiff's lawyer won't take the case, it probably isn't a good enough case. Water under the bridge but many people read this and so I am saying it for their benefit.
I would be surprised nowbody would list this house. If the problems are disclosed, and you have a detailed estimate, and you price it low enough, why wouldn't it sell. It should sell very fast to the right person. Just has to be priced very low. Meantime, I wouldn't go broke trying to make the last payment possible.
warmly
–Richard