Debt Consolidation Companies - A Few Thoughts
Debt consolidation companies are available to individuals and families who are having serious financial problems. Money is really tight for many of us these days and we often hear about businesses closing or laying off a large portion of their workforce. When people lose their source of income they aren't able to pay their mortgages, student loans or credit card bills. To make matters worse they often have to start depending on their credit cards just to put food on the table and pay for the necessities.
I just read an article about the number of Americans who are now under-employed. These people are working in jobs that pay significantly less than they were earning or they now hold a lower position than before. Fortunately they are able to pay for the necessities of life but they have to figure out what to do about their debt. In situations like this many people turn to debt consolidation companies for assistance.
Debt consolidation companies assist people by negotiating with their creditors. Some companies will negotiate to actually reduce your total debt. Others simply work to reduce or erase your late fees and accrued interest. Typically these types of companies will also be able to reduce your interest rates. You make one payment to the company you are working with, often less than you would pay if you paid each creditor individually, and the company then becomes responsible for making your monthly payments to your creditors.
Some debt consolidation companies are non-profit and work free of charge while others may charge a fee. Chapter 13 bankruptcy also includes some degree of debt consolidation since this type of bankruptcy doesn't eliminate your debt; it is a repayment plan.
When you make the decision to work with a debt consolidation company do your research first. You will want to make sure that the company of your choice doesn't have a long list of unresolved complaints with the Better Business Bureau. One of things I always check before doing business with any company is look up reviews online. This has proven to be an excellent practice for me and has kept me from dealing with an unscrupulous business.
Before you work with a debt consolidation service you will also want to ask some additional questions. Obviously, you will want to know how much, if anything, they are going to charge you. Make sure there are no hidden fees. Find out if there is any penalty for prepayment. If you find yourself in the situation where you can pay off your debt in its entirety, you don't want to have to pay a penalty to be able to do it. What if you miss a payment? What will the penalty be for that?
Debt consolidation is a big commitment but you will feel such a sense of relief to be free of the burden of debt. It will be such a relief to be able to answer the phone again and not to be afraid of opening your mail.
I just read an article about the number of Americans who are now under-employed. These people are working in jobs that pay significantly less than they were earning or they now hold a lower position than before. Fortunately they are able to pay for the necessities of life but they have to figure out what to do about their debt. In situations like this many people turn to debt consolidation companies for assistance.
Debt consolidation companies assist people by negotiating with their creditors. Some companies will negotiate to actually reduce your total debt. Others simply work to reduce or erase your late fees and accrued interest. Typically these types of companies will also be able to reduce your interest rates. You make one payment to the company you are working with, often less than you would pay if you paid each creditor individually, and the company then becomes responsible for making your monthly payments to your creditors.
Some debt consolidation companies are non-profit and work free of charge while others may charge a fee. Chapter 13 bankruptcy also includes some degree of debt consolidation since this type of bankruptcy doesn't eliminate your debt; it is a repayment plan.
When you make the decision to work with a debt consolidation company do your research first. You will want to make sure that the company of your choice doesn't have a long list of unresolved complaints with the Better Business Bureau. One of things I always check before doing business with any company is look up reviews online. This has proven to be an excellent practice for me and has kept me from dealing with an unscrupulous business.
Before you work with a debt consolidation service you will also want to ask some additional questions. Obviously, you will want to know how much, if anything, they are going to charge you. Make sure there are no hidden fees. Find out if there is any penalty for prepayment. If you find yourself in the situation where you can pay off your debt in its entirety, you don't want to have to pay a penalty to be able to do it. What if you miss a payment? What will the penalty be for that?
Debt consolidation is a big commitment but you will feel such a sense of relief to be free of the burden of debt. It will be such a relief to be able to answer the phone again and not to be afraid of opening your mail.
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