“Do you owe money to credit card companies?” You’ve likely seen the advertisements on TV promising to reduce what you owe to the credit card company. Some of these ads even suggest there’s a new government program to bail people out. However, there isn’t. If a client with debt asks for your advice, what should you do?
Let’s take a moment to consider the real problem. Many people spend money they don’t have without any idea of how they will repay it in the future. Credit card statements say how many years it would take to pay off the balance by making minimum payments and suggest paying it off in fewer years with larger payments, but many clients need to learn about budgeting. Often, however, they choose to keep spending. Here are some debt-reduction questions and tips to consider:
Beware of scams. Your client likely wouldn’t lend money to a dodgy family member, borrow money from a loan shark or fall for an internet scam requesting money. However, they might be tempted by an ad for debt relief that sounds too good to be true if they are in serious debt. Why? Because the language in these ads is incredibly persuasive. In fact, the Federal Trade Commission has been going after these operations for years. A clue that the offer is a scam is that it promises to get creditors off your client’s back yet requires a large upfront fee or a series of regular payments.
How do the legitimate programs work? There is no hidden federal program for…