10 Debt Consolidation Myths #2: Your Monthly Payment Can Be Cut In Half

Contributed by mm | August 28, 2006 1:17 AM PST

Bankrate has an excellent review of common misconceptions of debt management. Here is the next installment: Credit Counselors Can Cut Your Monthly Payments In Half..

Those who seek credit counseling and debt consolidation should have the right expection: there is no free lunch and don't count on your debt suddenly disappearing after you talk to the counselor.

From Bankrate:

No such luck. This is a numbers fudging claim that holds true only in the narrowest of circumstances. For instance, if you miss two $200 payments on a $10,000 balance, the third month's bill will make it $600 that you owe. DMP personnel re-age that bill, knocking your payment amount back to $200. You haven't escaped anything -- the missing money was merely tacked back onto the total owed.

And most folks who walk through his doors haven't missed payments, says Greenberg. These harried souls will see a bit of relief from an interest reduction, but by no means will they magically owe only half their bills.

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