CBS’s article “How to prepare for credit card debt forgiveness this April” constitutes a serious disservice to its readers.
It touts those debt foregivess programs who prey on the desire of most people to pay their debts to the extent they can, offering a supposed path out of debt that’s largely illusory. At bottom, the article is little more than an advertisement for its “partners”, the listed debt relief companies.
The misdirection
The easy criticisms first.
- there’s no “season” for debt forgiveness, in April or any other month
- consumers “qualify” if they’ll sign up and pay
- the promised forgiveness solves only a part of the credit card debt
Only at the bottom of the article does the author disclose that getting some debt forgiveness
- may take a year or two,
- cost 25% of the debt involved in fees to the company, and
- relieve the consumer of only 30-50% of the debt.
One of the listed debt relief “partners” assures readers that applying to work with the company doesn’t affect your credit score. Utter silence about what happens to your credit score when you enroll and stop paying. Hint: it isn’t pretty.
And, the article fails to mention at all that you may owe taxes on the amount of debt forgiven.
Missing the big picture
The artcle’s bigger failing is that the supposed debt forgiveness addresses only one kind of debt.
The average new car costs north of $50K, beyond the means of 2/3rds of American households. https://bit.ly/4hTcZP9
Credit card debt may be only a fraction of a family’s financial challenges. Car loans, housing costs, SBA debt, back taxes, and medical bills also impact a family’s budget. Debt forgivness isn’t offered for those sorts of bills, outside of bankruptcy.
Commercial debt forgiveness outfits have no obligation or interest in assessing the big picture. Is it actually feasible for this person to attempt to get forgivness of this debt? Are the credit cards really the most important kind of debt to address? Do thesacrifices necessary to fund the plan put the family at risk if there’s even a small unexpected expense?
The elephant in the room is the rate at which debt forgivness plans fail, after paying for a while.
CBC does its audience a disservice when its content is so shallow and one-sided.
