The government is forever trying to protect us from unscrupulous marketers and apparently they think debt consolidators fall into that category. Debt relief companies will no longer be allowed to charge fees before they perform their services. It seems debt relief is a grey area where companies make big promises of eliminating your debt or at least a big portion of it and then charge an up front fee for the service. According to the FTC, the promises are often not kept and the end result of their “service” is much different than what was originally promised. With the up front fee though, they already have their money and of course the person who paid the fee is then in a bigger financial hole than they were to begin with.

Under the new ruling, debt relief providers cannot charge a customer anything until a successful negotiation has taken place involving the settlement or reduction of the customers debt. Simply put, if the debt relief company is successful in helping a client reduce their debt, only then can they charge for their service. There will have to be lots of new written agreements in place so that the fee can be charged after completion of the debt reduction service.

So many people are in credit card debt right now and this bad unemployment isn’t helping any. The economy looks to be in a funk for many months ahead as no end is in site. This is causing more people than ever to search for debt relief grants and any other type of debt relief they can find. They hope to get Obama debt relief or some other kind of handout, giveaway, or help from the government but there isn’t anything like that. At least now, starting in a couple of months, they won’t have to worry about being fooled into paying for debt help from a company that might not be able to deliver on it’s promises.

With every credit card statement or bill you get in the mail, there is always a box that tells you the minimum amount due. It may seem that that amount is the least you can pay because the credit card company likes you and wants to be nice. No, the minimum amount due is what they WANT YOU TO PAY or hope you pay so that they can make the most money possible in interest from you.

Credit card companies make money by the outlandishly high interest rates they charge you. While you can only get about 1% interest if you put your money in a bank CD or a Treasury Bill, the credit card companies are very happy to charge you rates of 18% and higher. This is where they make their money and they want you to owe them as much as possible at all times. The more you owe them, the more money they make in interest as long as you keep on a schedule of paying them a little at a time.

It will take you many years to get out of debt if you only pay the minimum due every month. You HAVE to figure out a way to pay off more unless you want to be owing them money perhaps for the rest of your life.

The chart below shows the number of years it takes to pay off different amounts of credit and the chart is based on 19% interest along with a minimum monthly amount of just 2.1% of the outstanding balance. Remember, credit cards usually require low monthly minimums of between 2.0% and 2.5% of the outstanding balance because they WANT you to only pay that much. You need to fool them and pay more if you want to be successful at erasing your debt.  

How to enroll in an online debt relief program

At first, you need to fill out an online form. Then, a consultant (on behalf of the debt relief company) will call you for a free session in order to assess your financial situation. After assessing, the consultant may suggest a debt settlement program if it is the best suitable option for you.

What happens in a settlement program?

As you enroll in a debt settlement program, the debt negotiator (on behalf of the company) will start communicating with your creditors to reduce the total amount you owe. In the meantime, you will have to deposit a monthly amount into your settlement account with which you can pay your creditors as soon as they agree upon a pay off amount.

It may happen that an online debt consolidation and settlement company offers a consolidation program to you if it is suitable for your financial condition. It is advantageous over settlement as consolidation has a positive effect on your credit report.

What happens in a consolidation program?

In a consolidation program, the debt consultant (on behalf of the company) will negotiate with your creditors to reduce the interest rate of your loans/debts. With your creditors’ approval, he/she will also decide upon a monthly payment that you need to pay towards your debts. After you make the payment, the company will distribute it amongst your creditors.

It is quite important to choose a good online debt consolidation and settlement company to pay off your dues. Therefore, check its membership with TASC along with checking the company’s reputation from BBB (Better Business Bureau) to know whether or not there are any complaints against the consolidation and settlement company.

Unfortunately, reality is much different from that hope. While people continue to look for magical free money and free debt relief grants to get their lives turned around, they are finding that not much has changed at all. Well, the government has gotten bigger but it hasn’t gotten better.

The stimulus money was and is a mammoth outlay of cash but it didn’t go to people like you and me. It went to businesses, organizations, state and local governments, and other groups who knew how to apply for it. None of it went to ordinary folks as a hand out like some people hoped. Obama debt relief is there for some who know how to play the system but not for regular people.

There was some mortgage assistance for some families but not for others and again, you had to qualify for it and know how to get it. Many families found out they didn’t qualify for the mortgage help and where quite upset.

The moral of all this is that if you think you are going to be getting debt relief help from the government you might be waiting a very long time. The government is not going to help you in most cases, it is just going to feed off you to become bigger and more controlling. Government debt relief is a myth, plain and simple. There is only one way to become debt free and that is to spend less than you bring in. You have to learn to save and start paying down your debt one dollar at a time. The sooner you stop hoping to win the lottery or get help from the government, the sooner you will be on your way to financial freedom.

Not everybody is in debt though and that is because many people don’t buy things unless they have the money to pay for it. It used to be that cash was king and people payed for things by reaching in their pocket for the money or they wrote a check. This meant they were never spending money they didn’t already have.

It is so easy nowadays to pay for everything with the credit card. Almost all shops and restaurants take it and just carrying a credit card is easier than dealing with cash. However, paying thing with a card has obviously not been working for many people as they continue to charge things that they can’t afford and don’t have the money for.

Of course big ticket items like houses, cars, and boats will be financed by credit more times than not but that is not what we are talking about here. People who are deep in debt and looking for debt relief grants have most often gotten there one small purchase at a time. They start off debt free but through the years they just keep on charging that card and end up with so much high interest credit card debt that they are then forced to contemplate bankruptcy.

One of the ways you can prevent this from happening is to change your spending habits. If you make it a rule to not buy anything unless you have the cash, you will be forcing yourself to cut back and show some self restraint. That means cash for all items including that $1,000 flat screen television you want and the Wii game console to go along with it. Make a new rule in 2010 that in order to buy something, you must first save up the money to buy it. Then when you have enough, you can pay cash for it or write a check.

If you make this new pledge to wait to buy things until you have the cash, you will get a good feeling inside that you have earned the item. This will allow you to enjoy it even more and it will also put the breaks on your out of control spending. You still might need debt relief but at least you will be making a good start to fixing the problem.

If you read it and are able to understand it, the story doesn’t have anything at all to do with Uncle Sam helping with your debt. All it suggests is that you take your tax refund (if you get one) and use it to pay of some of your debt. It then suggests that you reduce your number of  exemptions for this year and take that extra money you will get paid and also put that toward your debt. Wow! Brilliant….not!

Only an idiot will not realize that you aren’t  getting any help here from the government at all. And the one BIG THING WRONG WITH THIS STORY IS THAT PEOPLE IN DEBT GOT THERE BECAUSE THEY LIKE TO SPEND! Very few people in debt are able to take any extra money and save it or put it towards debt because they want that new LED flat screen TV or the newest model of an iPhone! People looking for debt relief grants and other forms of government help are surely not this stupid to have that article actually help them.

Is Stacy Johnson is a real reporter making a living by writing stories like this? Is everyone in America in the first grade? Are we all children and need help figuring out where to find our own money? If so, I need to get a new job as there are more opportunities to take advantage of the clueless than I thought.

There isn’t, to my knowledge, any official government solution or program that will help you with your debt problems. You should try hard to pay cash for things instead of charging them but if you don’t have the cash it is difficult to do.

USA Debt Help is a place you can go to find a debt consolidation / settlement company that will help you get back in control of your finances. Often times you can bargain with your creditors and have them forget some of your debt if you have a plan put in place where you will pay the rest. It is a good idea to have a company who knows how to do this for you so that you can get your life back and move toward becoming debt free. - USA Debt Help