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Why Most Programs
Have a 75% Failure Rate
Debt consolidation, home
equity loans, credit counseling, debt management plans, even Chapter 13
bankruptcy -- it doesn't matter which of these debt programs you're talking
about. They all suffer from one fatal flaw, the number one problem that causes
most people to fail at eliminating their debts through these techniques. Can you
guess the problem?
It's probably not what you're
thinking. It's not the fees, interest rates, or the quality of the companies
behind these debt solutions. No, the number one problem with most debt programs
is that they require FIXED monthly payments without exception. This major flaw
is the main reason that very few people make it through a credit counseling
program or a Chapter 13 bankruptcy plan.
Do you make exactly the same
amount of money each and every month? If you are like most people, the answer is
probably NO. It's easy to understand why. Salespeople, for instance, often
experience ups and downs based on how much commission they earn from one month
to the next. Seasonal workers experience boom and bust times depending on the
time of the year (think retail workers getting lots of overtime around the
holidays). Overtime hours come and go depending on company workloads. Part-time
jobs may offer hours that vary widely from week to week. And so on.
Now, what about your
expenses? Do you spend exactly the same amount of money each and every month?
Sure, your mortgage or rent and your car payments are a set amount each month.
But doesn't your utility bill go up and down depending on the weather? What
about your phone bill? How much will you spend on car repairs over the next 6
months? Medical bills? Dental bills? Can you predict such variable expenses with
any accuracy?
If you have lots of room in
your budget, with money left over at the end of the month, then fluctuating
income and expenses are probably not a major issue for you. However, if you are
struggling to make ends meet, living from one paycheck to the next, then an
unexpected expense can destroy your monthly budget.
People enter debt relief
programs with the best of intentions. Take credit counseling, for example. You
enter a program to get some help in bringing your credit card debts under
control. The monthly payment of $500 sounds good. You're humming along just fine
for a few months, then wham! The water heater blows up. Time to shell out $800
for a new one. Unless you like cold showers, you'll need to skip the $500
payment to the agency this month, and part of next month's payment as well.
Where does that leave you with the credit counseling program? Back on the
street, that's where. You simply CANNOT miss payments into that type of plan and
expect anything but failure.
Or look at Chapter 13
bankruptcy, where the court requires you to pay a set monthly amount to your
creditors over a 3-5 year period. Even before the drastic new law went into
effect, 2 out of every 3 people failed at Chapter 13 bankruptcy. It will get
much worse under the new law, because the court will set your monthly budget for
you, based on what the IRS says it should be for your state and county. This is
simply unrealistic, and once people realize how bad the new law is, they will
run in the other direction from Chapter 13. (Forget about Chapter 7, where you
wipe the debts away. The new law will make it very difficult to qualify for the
old Chapter 7 fresh start.)
Again, the big problem with
most debt relief programs is lack of flexibility. You cannot call your loan
officer, the credit counseling agency, or the court trustee and say, "Hey, my
kid broke his leg and I had to pay the hospital $500 to cover my insurance
deductible, so I'll need to skip my debt payment this month." If you could, then
these plans might have a chance of working. But such inflexible programs simply
do not reflect the unpredictable nature of the average household budget.
So is there any debt program
that does provide this flexibility? Yes. It's called debt settlement, or debt
negotiation. It's certainly not for everyone. Debt settlement is an alternative
to bankruptcy. It's not for people who can pay their bills in full without
hardship. But it can be a real blessing for those seeking relief from a crushing
debt burden.
The reason debt settlement
is so flexible is simply because YOU control the cash. You build up money in
a separate savings account until you have enough to make a reasonable offer to
one or more of your creditors. Like any debt program, debt settlement has its
downside and its risks, but no other debt program provides this level of flexibility.
Because the monthly payment is going into a negotiation fund that you set up and
control, a bad month simply means you have less money to settle with. If you can
make it up later, that's great. If not, that's life. When you have enough to
settle ONE account, then you make an offer. If your creditor takes the deal,
then you start building up funds to knock out the next debt, and so on. Debt
settlement is the
only program out there that recognizes a basic reality: Your budget should set
the pace for your debt settlement program. Not the other way around! Debt
settlement works!
Again, debt settlement is not
a magic bullet. It won't cure every debt problem. But if you need to skip a
month, or adjust up or down a little to reflect what's going on in the real
world, it doesn't mean the end of the debt settlement program. It's truly a shame that the
financial "experts" who have set up the bankruptcy rules, consolidation loan
terms, credit counseling plans, and debt management programs haven't figured
this out yet. If they would just recognize this fundamental problem, then the
success rate on their programs would increase dramatically and they could stop
misleading the public about what works and what doesn't in the world of debt
relief.
United Communications Debt Settlement Program can make all the difference in surviving and overcoming your
financial struggle.
You and your family will take comfort in the fact that you are paying off your
debt in a manageable way. And, you won’t even have to take out a loan!
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