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Dear Ken: I saw an ad on TV last night and also on the Internet that there is a government bailout program for people with credit card debt of more than $10,000. It would allow us to pay off our debts
for 60 percent of what we owe. What do you know about this program?

A: There is no bailout for consumers with credit card debt of any amount. What you saw is a scam known as debt settlement and it will ruin your credit score.

Last week, I worked with two different individuals who paid thousands of dollars to one of these groups. The groups provided absolutely no service and the individuals are ending up in the legal system with judgments being filed against them.

The “credit card bailout” ads are very careful not to say they are government programs. The ads only imply there is help. In many cases, the numbers you call are referral services that put you in touch with

If you read these conditions, would you agree to them? Here is some of the fine print of one of the Internet companies, Credit Card Bailout (I have italicized some of the key words):

“Credit Card Bailout is not providing legal, financial, investing, credit repair, tax, counseling or any other professional advice. Although we believe the content on this Web site to be accurate, it is general

in nature and does not fully describe the complex details of every debt situation or program you may decide to use. It is recommended that you always contact a licensed professional in the appropriate
field for advice before making any final decision.

“Credit Card Bailout … does not endorse nor are we responsible for the actions taken or services provided by any particular company that may be found by using the Website.

“Credit Card Bailout is not the end provider of debt relief service thus we do not guarantee any debt reduction amount, nor do we estimate fees; this information will be estimated by the debt relief company you consult with and or choose to use.

  1. “Late fees, penalties, and interest will continue to accrue on the consumer’s debt until the consumer’s creditors accept and receive a settlement;
  2. “A consumer’s creditors may still sue to collect on the debts and garnish the consumer’s wages;
  3. “Interest rates applicable to the consumer’s debt may increase;
  4. “Any money a consumer saves in negotiating a settlement with a creditor must be treated as income for tax purposes;
  5. “A debt settled for less than the full amount owed may result in a negative notation on the consumer’s credit report;

“ is not liable for any loss resulting from a business relationship formed by you the consumer and an end service provider.”