Debt Consolidation Services Help You Negotiate With Your Creditors |
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If you are considering using debt
consolidation services,
credit counseling or a debt negotiation company to help you get out of debt faster and 'cheaper', then I encourage you to try and understand as much as you can about these types of companies before you sign up. A little knowledge of debt consolidation services now could save you time, money, stress and aggravation down the road. But let me assure you that by seeking help with debt consolidation services and educating yourself about your options, you have taken the first vital step toward eliminating your debts and the stresses that they bring. So congratulations, you are already ahead of the game. Now, where to turn for help? Many people just like you feel preyed on by the myriad of debt help companies out there proclaiming that they can help you with your debt situation. The question is, Can these debt consolidation services, credit counseling and/or debt negotiation companies really help you, or are they just out to take advantage of your delicate situation? A good starting place is to take a closer look at exactly how these debt elimination services really work, learn the differences between the services and decipher all of the promises that they make. There is a common misconception that debt consolidation services programs involve the consolidating of your debts, which is just not true. What are consolidated are your payments, allowing you to make just one payment each month to the debt consolidation services firm that is handling your account. This company would then turn around and pay each of your creditors on your behalf. But let's back up just a bit and take a bigger picture view of debt consolidation services programs, how they work, and the pros and cons. What exactly do debt consolidation services companies do for you? When you sign up for a debt consolidation services program, you are assigned a debt counselor that works closely with you and your creditors. One of the first things that will happen is that all of your creditors will be contacted and made aware that you are working with debt consolidation services or credit counseling company. Your creditors will be advised that all future contact regarding your accounts is to be directed to your debt counselor, not you. This alone should take a huge amount of stress off of you. No more dealing with angry creditors and wincing when the phone rings wondering if it is someone calling to collect a debt. The next likely thing to happen is that the debt consolidation services or credit counseling company begins negotiating with your creditors to lower your interest rates, remove late fees from your accounts and arrive at a monthly payment that fits your budget. Debt consolidators can often get your creditors to reduce interest rates by 50%, and sometimes by 100%. In other words you would not be paying any interest, and all of your payments go directly toward paying down your debt. Now, the truth is that most major credit card companies have set interest rates that they offer to customers working with debt consolidation services, credit counseling and debt management companies. For example, Bank of America eliminates all interest charges for consumers who are working with debt consolidators. Yes, a 100% reduction. On the flip side there are creditors that will not reduce interest rates at all. Bottom line? It varies from creditor to creditor. But overall, a good debt consolidation services or credit counseling firm can dramatically reduce the amount of interest you are paying every month. It is important to keep in mind that all debt consolidators are not the same. Like any industry there are good and bad companies out there. A company we like to recommend to our visitors works in association with a non-profit organization and offers a free, no-obligation debt plan. They handle debt consolidation services, credit counseling and debt negotiation so they will be able to advise you in all three areas. (We will talk further about credit counseling and debt negotiation later). You can visit their site here and receive your free debt plan. |
