Free Non Profit Debt Consolidation – Do Such Companies Exist?
November 6, 2009 by Henry D Wilkins
Filed under Debt Consolidation
In a country where the average debt per Mastercard is over $4000 and close to 1 / 4 of US citizens admitted to maxing out one Visa card, it is smart that folks are on the lookout for simple answers to ease their burden of debt. A non profit debt consolidation company can seem to be the solution to a prayer.
Many north Americans have numerous mastercards, all with substantial balances and high rates and regular payments. A non profit debt consolidation company barters with each creditor to reduce IRs and regular payments. After getting the hottest deal possible for the buyer, the non profit debt consolidation company totals the regular debts, so the consumer only has to pen one check to the non profit debt consolidation company. The company then distributes the payments to the different creditors.
The good non profit debt consolidation corporations also offer monetary analysis and help with budgeting so the shopper doesn’t find him or herself right back in the hole. Sadly , though , as with any other kind of business, there are good firms and bad ones. The coolest ones will help you to get and stay clear of debt.
The bad ones will pocket your regular payments to fill their own coffers. Your understandably outraged creditors won’t see a cent of the money, or if they do, they are going to receive a lot less than the concluded on amount. The creditors will then take out their hate on your with badgering telephone calls, negative reports to credit agencies, for example.
The Fed. Trade Commission internet site offers fantastic info on separating the wolves from the lambs. Generally be cautious of any company that uses high pressure sales strategies or charges exorbitant “up front” charges or donations.
Debt consolidation is not for everyone. Before starting you on a debt consolidation plan, the company should offer you credit counseling to get a full picture of your income, spending habits, financial strengths and weaknesses, etc. Any company that automatically wants to place you on a debt consolidation plan is suspect. Ask the company upfront if they will keep a percentage of your monthly payment and what that percentage is for. Ideally all the money you pay monthly should go to your creditors.
Finally, just because the business advertises itself as non profit does not necessarily mean it is honest. Many illegitimate “non profits” charge exorbitant “donations” to use their services. Getting in with the wrong debt consolidation company can cost you your credit rating and your peace of mind. Do your research carefully to make sure the company you are working with has your best interests at heart.
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