CAll Us: (800) 544-0231 Live Chat   Login
Menu
Are There Risks Involved With Debt Consolidation Services?

Are There Risks Involved With Debt Consolidation Services?

Are you currently carrying a massive debt load? Do you wonder if it’s another bill collector every time your telephone rings? Do you wake up at night wondering if you’ve forgotten to pay something? If so you may want to consider seeking the help of debt consolidation services.

And if you choose a debt consolidation services that do not charge a fee, one that is already subsidized by many of the creditors that they aim to help repay, you could benefit even more because they will be putting the entire amount that you pay towards your outstanding debts instead of keeping part of it as their payment.

However, non-profit debt consolidation services offer many other services than just debt consolidation and repayment. They also offer consumers advice on keeping their finances on target, developing workable monthly budgets, and how to repair a poor credit rating.

Getting your finances straighten out is of course the first step. The debt consolidation services will help you make a list of all your outstanding unsecured debts, how much you owe to each of them, and what the total amount you should be paying every month is.

The next step is to work out what your monthly expenses are. These include your mortgage or rent, your utility bills, child care expenses, and any other mandatory payments you must make, especially if they are guaranteed by your property. Once your budget is done you can decide how much you can spend each month to pay towards your debt consolidation.

Once you know how much you can actually afford to spend each month in repaying your debts, the debt consolidation services will contact each of your creditors and ask them to agree on a lower repayment amount each month. Sometimes they can even get your creditors to lower their interest rates or eliminate some of the fees that they have been charging you for being late or over your credit limit. Most creditors will want to work with you because they realize that if they don’t negotiate a lower payment, they are unlikely to receive any money for the outstanding debt.

Now let’s talk about what risks are involved in using a debt consolidation service. Basically, the only risk is if you use a debt consolidation service that is not legitimate or professional. Do some research and even ask your creditors if there is a specific company they work with regularly that they can recommend.

Beyond that, there really is no downside. And the upside is that you will have peace of mind in knowing that your bills are being paid on time every month.

Consider Consumer Counseling To Help With Debt

Consider Consumer Counseling To Help With Debt

It can be a challenge today to not spending money when others around you are driving expensive cars and living in your dream home. A result of this due to the availability of credit today is that individuals forget amidst their spending that the money they borrow on credit just be repaid, and with interest. If you are struggling to get out of debt, one of the best ways to consider a consumer counseling service.

It is not impossible for even rational individuals to be optimistic about their future ability to repay a loan. Believing that the monthly payments associated with a loan will not be a burden to repay, they take out the loan. Later, however, it may become obvious that the payments and money owing is outside their financial budget and possibilities. When the time comes that bill collectors to be calling, consumer counseling may be a good choice to assist with credit card debt settlement. Should you find yourself unable to repay your debt and handle settle debt yourself, here is some advice in choosing a good consumer counseling service.

Start your search either online or in a phone book but beware of possible scams. If the organization claims they can repair your credit in a very short time, you are dealing with a concerning company and you continue your search.

Reputable and trustworthy consumer counseling services will test you with some prerequisites before accepting you as a client. The perquisites may be different for each company, but the general requirements are a source of income and a minimum amount of unsecured debt. If you have trouble with secured debt such as a car loan or mortgage, it may be difficult for them to help you.

When you first meet with your credit counselor, be sure to have copies of all statements from your current loan or credit accounts. They will need to know the specifics of your financial situation, such as the amount owed to the creditors, the current monthly payments, and interest rates.

Thereafter, it is in the hands of the counselor. They will contact your creditors and negotiate a new monthly payment and lower interest rate. You can decide if you want to handle and submit the payments yourself or make a lump sum payment to the counseling service. If the latter is chosen, the counselor will make the payments to your creditors. Once an action plan is determined, the counselor will help you improve your general financial situation by creating a budget. A budget will help you avoid future debt and another financial situation. Today, there are even software programs to assist you in following and managing your budget. Of course, you can seek the advice of your counselor when you need it.

One last note, do not count on using your credit cards during the consumer counseling process. The service will require you to sometimes cancel the cards or stop using them until you have repaid your debt and repaired your credit.