Contributed article from someone who came across my blog.
Debt consolidation companies have gained increased prominence owing to the fact that they have helped many debtors to become debt free. Debt consolidation is undoubtedly a good debt solution but you have to play your part too. Once you enroll for a debt consolidation program, it is important to take the process to completion and not leave it midway.
You seek professional assistance only when you are in a financial mess. There are times when you don’t mess up your finances but your circumstances force you to. Under such circumstances you can take help of a credit counselor who can suggest ways to regain financial stability again.
When you consolidate your multiple debts into one with the help of a debt consolidation company, the firm you are hiring will take care of your debts. The company will negotiate with your creditors on your behalf and convince them to reduce rate of interest. If the interest rate is reduced, the amount you are paying each month is also lowered. You will also get a repayment schedule that will enable you to keep track of your payments and your payments become more organized and structured.
The debt consolidation companies may be for-profit or non-profit making firms. Once you enroll for a debt consolidation program, make sure you don’t miss your payments again. This can be very troubling and can land you in serious trouble. Studies reveal that approximately 30% to 60% debtors in United States don’t repay their debts.
However, lately there are many debt consolidation companies that have come under the spotlight. And this time due to the wrong reasons. The Federal Trade Commission, state regulators and attorney generals have received several complaints from the consumers that there are few debt consolidation companies that are taking debtors for a ride. These debt help firms promise you that they will be able to help you get out of debt but in reality they fail to live up to their promises.
In majority of the cases, it has been observed that debt consolidation firms charge very high upfront fees; they make verbal promises and avoid writing down their services in paper. The incidence of debtors dropping out of the program isn’t uncommon and when they do so, debtors lose all their cash.
However, not all debt consolidation companies operate illegally and if you intend to hire the services of a debt consolidation company, make sure you check the Reliability report of the Better Business Bureau.
