Free Non Profit Debt Consolidation – Are They Really Free Or Will I Pay Hidden Charges?
In a country where the average debt per credit card is over $4000 and close to a quarter of Americans admitted to maxing out at least one credit card, it makes sense that people are looking for easy answers to ease their burden of debt. A non profit debt consolidation company can seem like the answer to a prayer.
Many north Americans have many 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 firms also offer fiscal support and help with budgeting so the customer doesn’t find him or herself right back in the hole. Sadly , though , as with any other sort 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 site offers wonderful info on separating the wolves from the lambs. Generally be cautious of any company that uses high pressure sales systems or charges exorbitant “up front” costs 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.
Eventually , because the business publicizes itself as non profit doesn’t actually mean it is fair. Many illegitimate “non profits” charge preposterous “donations” to use their services. Getting in with the incorrect debt consolidation company can cost your credit record and your assurance. Do your analysis scrupulously to ensure the company you are working with has your own interests at heart.
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