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My wife <@U07961BNPK8> saw an ad in Ami Magazine f...
# credit
c
My wife @jolly-army-45541 saw an ad in Ami Magazine for a “debt consolidation gemach” … I didn’t see the ad, but if I understand correctly, the idea is that a generous benefactor (or Nigerian prince?) is offering an interest-free gemach loan to help frum families pay off interest-bearing loans. Anyone <!here> heard of this (or anything like this)?
m
Gemach chasdei Yosef? If it's them I'd stay far away.
Also please don't use the at here tag in the future thanks!
c
Whoops 🙈 (And thank you 🙏 )
m
The way these fake gemachs work is they close your credit cards and restructure the debt with low interest and slap on a very high fee as part of your new lower monthly charge to pay the "gemach"
c
Oh wow. Yes, that’s the one… got it. Will steer clear. Are there any actual legitimate gemachs out there that do this?
m
Frum finance will help you do your own debt consolation!
Free
j
Thank you! How would you recommend getting started?
m
https://frum.finance/start/ is a great place to get started and shoot me a DM after you're acclimated
🙌 1
c
The way these fake gemachs work is they close your credit cards and restructure the debt with low interest and slap on a very high fee as part of your new lower monthly charge to pay the "gemach"
That sounds like ribbis
m
They aren’t the one loaning the money. The credit cards companies are.
The high fee is for negotiating with the credit card companies on your behalf.
b
Are these frum people running this "gemach"? Not that I'd be surprised if they were but it would be nice to hear they're not frum
m
Yes.
All frum.
To be clear, with their product you will absolutely be paying a LOWER minimum monthly payment and get out of debt QUICKER, with ALL other variables being left unchanged.
b
So what's the catch?
m
closing your credit cards which is a big hit to your credit score, plus their fee which is pricey.
b
OK that makes sense
So you take out a CC to pay their fee and they close it right after? (Sort of joking but not totally)
m
People who need / use the service most likely aren’t opening up credit cards
b
OK I see
m
Great warning article from CFPB regarding debt consolidation: https://www.consumerfinance.gov/ask-cfpb/what-is-a-debt-relief-program-and-how-do-i-know-if-i-should-use-one-en-1457/ I read many of these companies pray on you "paying into" the debt consolidation fund and bailing before completing the program and they get to keep all the exorbitant fees. There's also tax consequences for debt forgiveness, where the forgiven amount is taxed.
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