I saw a headline in the paper this morning as I was riding the train in to work. It said, “Battered Traders Tired of Hearing Recession Is Over”. And the meaning is clear: For weeks now the talk on the news has been of economists chiming in unison, “The recession is officially over” – but that hasn’t been felt by the average American.
Wall Street has gotten billions in taxpayer money to help prop itself up, but people on Main Street have hardly received a thing. Cash for clunkers? Big deal. People have been buying cars they couldn’t afford in the first place. It’s more of a cash for suckers type of program. Sorry to be so blunt. I call it like I see it.
The most that the average American has seen in the form of aid during the great recession has been the measly unemployment check that goes out to laid off workers. Let’s be perfectly honest here, if you were someone in a decent job or a very high-paid job and went from your previous salary to receiving barely over $200 a week – would you look at this as a bailout?
In any case, during these troubled times many are those who have sought to take advantage of those in need. Enter the (cough, shark) bankruptcy lawyer and debt consolidation people. They are experts in the field of honing in like vultures over the vulnerable.
The debt consolidation people are really something else. They would have people believe that there is some benefit to enrolling in a debt consolidation plan or worse – signing up for a debt consolidation home equity loan. But the facts speak for themselves.
Most people sign up for a debt consolidation loan when they are strapped with large amounts of credit card debt and are finding it hard to make ends meet. But consider this: when signing up for a debt consolidation home equity loan, the consumer is exchanging unsecured credit card debt for secured debt – debt that is secured with the consumer’s home. This is risky, risky, Risky.
If the consumer were to sign up for a debt consolidation home equity loan and then be unable to make their monthly payments at some time in the future – they could absolutely have their home seized. This is not the strategy for consumers in debt to go with.
Rather than debt consolidation and bankruptcy, consumers should consider bankruptcy alternatives such as debt settlement. Even consumer credit counseling can be effective for many. These provide a better measure of debt relief for those who are struggling in the great recession.
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