Be Wary Of Debt Relief Ads

Debt got you down? You're not alone. Consumer debt is at an all-time high. Whether your debt dilemma is the result of an illness, unemployment, or simply overspending, it can seem overwhelming. In your effort to get solvent, be on the alert for advertisements that offer seemingly quick fixes. While the ads pitch the promise of debt relief, they rarely say relief may be spelled b-a-n-k-r-u-p-t-c-y. And although bankruptcy is one option to deal with financial problems, it's generally considered the option of last resort. The reason: its long-term negative impact on your creditworthiness. A bankruptcy stays on your credit report for 10 years, and can hinder your ability to get credit, a job, insurance, or even a place to live.

Read between the lines when faced with ads in newspapers, magazines or even telephone directories that say: 

"Consolidate your bills into one monthly payment without borrowing." 

"STOP credit harassment, foreclosures, repossessions, tax levies and garnishments...Keep Your Property."

"Wipe out your debts! Consolidate your bills! How? By using the protection and assistance provided by federal law. For once, let the law work for you!"

You'll find out later that such phrases often involve bankruptcy proceedings, which can hurt your credit and cost you attorneys' fees. 

If you're having trouble paying your bills, consider these possibilities before considering filing for bankruptcy: 

• Talk with your creditors. 
  They may be willing to work out a modified payment plan. 

• Carefully consider a second mortgage or home equity line of credit.
  While these loans may allow you to consolidate your debt, they also require your home as collateral.