CREDIT CARD DEBT CONSOLIDATION
DOES NOT WORK!

Debt Consolidation Lawyers and Attorneys

Learn the truth about Credit Counseling, Credit Repair and Credit Card Debt Consolidation. We explain why Credit Counseling, Credit Repair and Credit Card Debt Consolidation does not work.

The First Thing To Do Before Debt Consolidation Is To Get Your Free Credit Report And Dispute Any Incorrect Information!

Click here to get your FREE CREDIT REPORT at annualcreditreport.com. This link leads to the ONLY site to get your free credit report from Experian, Equifax and Transunion. You are entitled to a free report once a year. You can even download copies of your credit report straight to your computer within a few minutes. Then you can decide if you need to consider debt consolidation.

If after downloading your credit report you notice your report contains incorrect information, contact this office to schedule a consultation as we may be able to have that debt removed from your credit report thereby improving your credit score. Remember, debt consolidation is not always necessary. If the debt on your credit report does not add up to what you thought you owed, you do not need to consider debt consolidation.

The Truth About Credit Card “Debt Consolidation” Companies

Why Credit Card Debt Consolidation does not work is very simple. Most “Debt Consolidation” Companies who claim to be “non-profit” are wholly owned subsidiaries of the credit card industry (also known as the Debt Consolidation industry)! So when you hear a commercial for a debt consolidation company stating “we work with over 70,000 creditors to help you get your financial life back in order,” you now know what their true relationship is with these creditors. The credit card debt consolidation industry knows that some money via a “debt consolidation” payment plan is better than no money if a person files bankruptcy.

All a debt consolidation company does is call up your creditors and asks them if they are willing to accept less than the full amount currently due. The creditors (through the debt consolidation company) will often say we will offer you a lower monthly payment and cut your total current balance by up to one half of the full amount due. So far so good. Now here comes the scam: The credit card industry via the debt consolidation company will increase the interest rate, have a payment schedule spanning many years with a prepayment penalty clause. The end result is that you pay much more money to the creditor via the debt consolidation company over a number of years than if you had paid the amount in full. That is just the tip of the iceberg of how they scam and defraud you.

Moreover, there are advertisements encouraging people to enroll in debt consolidation programs stating that the U.S. Government passed a credit card bailout which requires credit card companies (via debt consolidation companies) to “clean their books” by offering settlements to people with credit card debt. THERE IS NO CREDIT CARD BAILOUT PROGRAM! This is simply a lie. These companies should be ashamed of themselves.

What About Working With My Credit Card Company To Lower My Debt?

For the most part, Credit Card Companies (who as stated above usually have a division in house known as a credit card debt consolidation company) have the best scam going. Before you try dealing directly with your Credit Card Company to consolidate your debt, know this about Credit Card Companies:

1) There is no cap on the amount of interest a Credit Card can charge you. That’s right, your Credit Card Company can charge you 1000% interest a day if they want to. Debt consolidation companies love this since this means longer repayment periods which they receive a percentage of.

2) Your current interest rate can change with 45 days notice! When you read the fine print of your contract (and try to find all the other text it makes reference to) you will discover a brutal, deceptive and sleazy truth. The terms of your credit card (including interest) can be changed with 45 days notice which normally comes in that fine print document which accompanies your monthly statement. So if you think you have a 4% interest rate on your credit card for as long as you have the card, think again! Credit card companies use this as an added benefit to entice you to consider Debt Consolidation programs. Remember, theses Credit Card Debt Consolidation programs receive a percentage of your monthly debt consolidation payment.

3) If a creditor cancels some of your debt, you have to pay taxes on that amount! Cancellation of debt is a taxable event which requires you to pay taxes for that money. This is yet reason to stay away from debt consolidation programs since the credit card debt consolidation companies will never tell you this directly. The Credit Card Debt Consolidation companies will usually bury this information in the fine print of the documents they have you sign.

This does not apply if a person receives a discharge in Bankruptcy. Click here to see how the Internal Revenue Service treats cancelled debt. Remember, Credit Card Debt Consolidation usually leads to cancelled debt which leads to tax debt.

Click here to see the Frontline Video on the Credit Card Industry. It is an eye opening experience! Please note that the Frontline Video was aired before the passage of the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009. Although this act was a significant advancement for the protections of consumers, there are still many abuses by the credit card industry especially in the area of credit card debt consolidation. This webpage illustrates just a few of the abuses by the credit card industry and the debt consolidation industry.

Special Note About Debt Consolidation

While it may seem we are bashing Debt Consolidation companies for their many abuses, let me set the record straight. WE ARE BASHING DEBT CONSOLIDATION COMPANIES! The overwhelming majority are crooks. If Debt Consolidation is right for you should only be determined by an experienced Debt Consolidation attorney who has reviewed your entire financial situation taking into account all your assets, debts and earning potential. If Debt Consolidation is in your best interest, then we will negotiate on your behalf to find a Debt Consolidation plan that is right for you. If Debt Consolidation is not in your best interest, then we will discuss all of your non Debt Consolidation options with you. We encourage you to contact this office to see if Debt Consolidation is right for you.

If Credit Card Debt Consolidation Does Not Work, What Is The Alternative?

Consider Ordering Fight Back! The Ultimate DVD Guide to Eliminate Credit Card Debt. For less than what most lawyers will charge you for an hour of their time, I designed this product to help good people eliminate credit card debt on their own and without the need of a costly lawyer. I strongly suggest you order this product before spending thousands of dollars in the never ending cycle of living in debt slavery.

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If you want a fast solution to your debt problems, consider Bankruptcy. The Bankruptcy process can help repair credit and eliminate the need to deal with credit card debt consolidation companies all together. A collection attorney will not be able to call you once a petition has been filed (limitations apply). We are Board Certified in Consumer Bankruptcy Law by the American Board of Certification. Click here to learn more about Bankruptcy.

The Law Office of Neil E. Colmenares, P.C. are attorneys who concentrate in the complex area of Bankruptcy Law. Our Bankruptcy Lawyers explain why Credit Counseling, Credit Repair and Credit Card Debt Consolidation does not work. We are Queens, Nassau & New York Credit Counseling, Credit Repair and Credit Card Debt Consolidation Attorneys. Payment plans are available!

Click here to Contact Attorney Colmenares

For additional information about Bankruptcy, click here to read recent articles by Mr. Colmenares.