If you’re searching for a debt relief program around the Internet you my have come across debt company called Debtmerica Relief. However one of the big rumors going around the web is that these sites are being considered nothing more than a scam, such as the Debtmerica Relief scam.
However when your talking about debt relief companies I’m going show you why they are not a scam. Don’t get me wrong some debt companies are a scam but then their are some that a perfectly legit but then their are some that fall in that grey area and in this article I’m going to cover a few of those grey area tactics companies like Debtmerica may be using this way you don’t end up finding out the hard way.
The Hardship Rule
If you’re looking at using Debtmerica to help you get out of debt you need to understand that they will not accept you unless you are facing some sort of hardship. However some companies don’t abide by this rule and accept almost everyone.
The problem with accepting everyone is that if you are not facing a financial hardship you will more than likely have at minimum decent credit. When you enter a debt negotiation program such as Debtmerica Relief your credit will more than likely be ruined but if your facing a hardship and your credit is already to the point of no return than it doesn’t matter anyways.
The Unsecured Debt Rule
Another rule that Debtmerica enforces is that they will not deal with any other debt other than unsecured debt. This may seem like a scam since this will not in effect solve your entire debt problem.
For example if you have a home mortgage or a car loan or any debt backed by an asset of some sort these debts won’t be allowed in the program. The reason for this is that unsecured debts are only backed by the value of your credit, such as a credit card. However if you have a car loan and the debt negotiation company fails to make a payment on that loan for a period of time the lender could be forced to reposes the car.
The Fees And How They Charge Them
Finally, the last thing Debtmerica will do is charge a fee for the program. With Debtmerica Relief the normal fee is around 17% of the total amount of debt placed in the program. So if you have $10,000 of debt in the program they will charge a fee of $1700 for the program.
However this fee isn’t usually paid up front but instead is paid along with the installment payments that pay off your debt balance. However their is one big issue with this, when the debt company gets the payment a lot of times the first payments made will go towards paying he fee that is owed with the debt company and the debts that are owed toward your creditors my go on hold till fee paid up.
The reason for this is because their is a high drop out rate with these kinds of programs and these companies want to get their money first before this happens. In fact this process kind or works like a mortgage does. With a mortgage in most cases you will pay mostly interest and very little principle but over time you will pay less and less interest and more and more principle, however when a debt company does this it could end up costing you more because they are neglecting to pay your creditors which could ruin your credit.
So is their a Debtmerica Scam or not, share your thoughts below.