Gather Little by Little

We decided to visit the fair last night. In the arena section of the fair, there is what I call a “vendor” section that is full of tables and displays for local politicians, government agencies and businesses. As we were walking by, a large green sign caught my attention. It read:

Get out of Debt
Eliminate all of your debt instantly!!
Everyone qualifies nobody turned down

I thought for a second about walking over and inquiring about the company just to do a little “heckling”, but decided I didn’t want to ruin the wonderful evening we had.

Let’s be clear on a few things:

• A company cannot get you out of debt instantly – The reality is, while you can get into debt instantly, unless you have a large pile of cash laying around or some company is going to give you money for free you can’t get out of debt instantly. It takes time, discipline, sacrifice and hard work. Anyone who tells you otherwise is lying and either has not clue what they are talking about or they are trying to sell you something.
• All of these companies are generally offering one of two things: 1) A debt consolidation loan or 2) An offer to negotiate with your creditors for a fee.
• Debt Consolidation Loan – These can sometimes be a good option if the interest rate is lower than the rates on your current debt, you pay them off aggressively and you stop going further into debt. Many people make the mistake of consolidating their debt into a single loan with a reduced monthly payment only to turn around and use that “extra” money to go further in debt. The only advantage a debt consolidation loan can offer is a reduction on interest rate. If you are considering going for any other option, just say no.
• Creditor Negotiation – There are in fact legitimate companies that do this. I’m not convinced they can do anything you couldn’t do yourself, but if you aren’t comfortable with doing this than they might be a good option. The problem is they charge you a fee, generally fairly high to perform this service for you. You also need to be aware that there is a lot of fraudulent companies that will take your money and do nothing for you. If you don’t believe me, just listen to some of the callers on the Dave Ramsey show that have been scammed.

I believe in the old saying “If it seems to good to be true, in probably is“. Don’t be fooled by companies that advertise such claims. Do your research, make smart decisions and don’t look for the quick way out.

Proverbs 28:22 says “A greedy person tries to get rich quick, but it only leads to poverty“. While you may not be trying to get rich quick, by using some of these services you are trying to get out of debt quick. Don’t make this mistake as it may only lead you into a worse financial situation.

Don’t try to get out of your debts as that isn’t honest. Romans 13:8 says “Pay all of your debts“. Incurring debt may not be a sin, but failing to repay what you owe is.

I would recommend you read over my article Get Out of Debt for a proven method of getting control of your finances and getting out of debt.