Beware of ‘easy ways’ out of credit card debt

Picture that scary in-between financial moment, a kind of knife-edge living, when you have too much high-interest debt to pay off in any reasonable amount of time, but not so much debt that bankruptcy is necessary or inevitable. What do you do?

A friend of mine, who would like to be known just as D, received an offer in the mail from Americor Financial Services, promising a new $27,000 line of credit.

D pays all his debt on time, but it’s expensive. He anticipates additional expenditures in the months to come. D would like more available credit. D called Americor to learn more about that line. After offering up details over the phone on his financial situation, including how much debt he currently pays on, the representative described a plan. Begin paying Americor monthly, approximately $500 less than he currently pays, and cease paying on the rest of his high-interest credit cards.

After 4 to 6 months, the representative told him, Americor will be able to negotiate from a position of strength with his banks. The representative practically guaranteed that the banks would accept a negotiated settlement for 50 percent of what D owed.

Perhaps the most intriguing part of the Americor representative’s pitch to my friend is that Americor promised that his credit rating – which is currently strong — would only temporarily dip, for about six months. After that, it would bounce back quickly. In addition, the debts

MICHAEL TAYLOR