There are many myths about Missouri debt relief agencies that are passing off as truth. To be able to choose the best plan and the best debt relief agency, you need to know the truth and eliminate all the myths from your mind. Check out 5 of the top myths about debt relief and find out the truth:
Myth 1: Debt Consolidation Loan Is Among The Greatest Options Available for Homeowners
As with all myths, there is a tiny seed of truth around this myth. Yes, the debt consolidation loan could be a great option for house owners because it would be available in no time and it would indeed provide enough money to clear most if not all the outstanding debts. However, it is also true that it puts at risk the only worthy asset you have – your home.
If you have debt problems big enough to not be able to pay your bills, an equity loan would more often than not have you lose your home rather than bail you out of trouble. You need to be very careful when you are choosing this option, lest you jump from the frying pan into the fire.
Myth 2: All Agencies That Offer Debt Relief In Missouri Are More Or Less Similar
Nothing can be further from the truth. The debt relief agencies – even if they all are designed to help you get out of debt – are as different as different can be. Some are not-for-profit, some charge fees for their services and some – and these types are what you should watch out for – are fraud. Many companies are out to make a fast buck out of your troubles.
Hence, be very careful when you sign up with any Missouri debt relief agency. Do your homework before you go looking for help. Watch out for telltale signs that the company is false and do not be afraid to ask questions and verify everything and anything that you would feel does not “fall well” with you. Alertness and caution would ensure that you are not duped out of your hard earned money by these unscrupulous and fraud agencies.
Myth 3: Debt Settlement And Debt Consolidation Is One And The Same
No, these two options are NOT the same. They may sound similar but are very different from one another. While debt settlement involves paying one pre-negotiated and agreed amount as one and final payment to the creditor, debt consolidation is a plan of pooling all debts together and having the agency that looks after your debt relief in Missouri pay them monthly with one consolidated installment.
Each plan comes with its own advantages and disadvantages, but according to the most, debt consolidation is a better deal than debt settlement as the latter will have a long term effect on your credit report.
Myth 4: Bankruptcy Is A Great Option Out Of Debt When You Are Totally Backed Into The Wall
Bankruptcy should be an option to choose only when you have exhausted all other available avenues. Not only would this option have long terms impact on your credit report, but also raise the rates of interest on all loans to about double the regular rates.