What is the best debt consolidation compnay to work with?
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I am unsure where Californian99 obtained his information, but debt consolidation companies are actually a very good way for individuals drowning in debt to get some breathing space. It is true than when debt consolidation companies were unregulated, many of the smaller ones took advantage of people's desperate situations, but this is NO LONGER the case. There are many larger companies now that are endorsed by regulation agencies and the one that I worked for even had a contract with the Defense Department in order to refer financially struggling soldiers for counseling. In fact a year or so back, when you heard all that news about the changing rules of Bankruptcy filings, one of the big changes was that individuals were to try to appease their debts through debt consolidation counseling before they were allowed to file. I admit that I am currently on the program, and it has helped me tremendously. Here's the basics on how they work:
1) You have lots of high interest debt. Perhaps you fell behind on some credit cards or private loans, and the late fees and high interest rates are making it very difficult for you to make any progress. With my case, I was always on time, but I wanted to make a change in my life and rid myself of my high interest debt.
2) you call a credit couneling company. I can't speak for all companies, but at the one I worked for we were trained to counsel the clients. To show care and compassion because they were in some difficult situations. This is sometimes all someone needs. Someone to just listen to, but if the counselor finds that a debt consolidation WILL help, then they will walk you step by step through the program.
3) Okay so you qualify now what? You enroll your high interest debt into the program and the company will begin contacting your creditors to negotiate lower interest rates on most of your accounts. This is a tremendous help because interest consumes most of your monthly payment anyways. Another important thing that you have to remember is that the creditors also CLOSE your accounts. This is to further help you along in paying off your debts.
4) You stay in contact with your consolidation company and creditors. But you only make ONE payment to the consolidation company, who in turn forward it to your creditors.
5) Sit back and watch your debt slowly disappear!
I think that the reason the person before felt so strongly against it is because he has never done it himself and has heard it from a friend of a friend. Also I found many consumers just left the accounts alone thinking the company was taking care of business. But you have to remember when you consolidate with a reputable company, they will encourage you to monitor your statements and call them if you see a fee that shouldn't be there.
So if you are interested in the company I worked for, it is http://www.incharge.org . If you are interested in the company I have an account with, it is http://www.careonecredit.org/ . Both of these companies are registered with the BBB and have outstanding reputations. The good part is they are also non-profit. They do ask for a monthly donation with your payment, which goes to paying for the counselor's salaries, but you can always decline it if you are really in a bind. I pay it greatfully because they have helped me so much. Anyways, good luck with your research!
Debt consolidation is a HUGE scam. You'll basically be paying an enormous amount of money to some bonehead company to make your monthly payments fo you. Here are some tips to help you get out of debt:
1) Obtain a credit report to see where you stand. I strongly reccommend myFICO.com
2) Formulate a budget and stick with it
3) Pay off high interest credit cards first, even if they have the highest balance
4) Change your spending habits
Free info available on debt matters I found useful at: http://www.debtmanagementresources.com...
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