Frequently Asked
Questions From People Wanting Help With Debt Consolidation.
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We Recommend Shopping Around And Getting Free Quotes From These
Three Quality Debt Management Companies: |
| CuraDebt is a member of the BBB and Chamber of Commerce |
| CreditAndDebt.com |
| DebtAdvocates |
How Does Debt Consolidation Work?
A debt consolidation company or service will work with your creditors and get you lower interest rates so you end up paying a lot less money.
Where you might have been paying over 18% interest on your money before, now you only pay about 8%. This can help you pay off your debts much quicker.
You make one payment to the debt consolidation company and they distribute the money to your creditors.
What Are The Fees For Debt Consolidation?
A typical debit consolidation company will make you give your first payment to them and then the rest are sent to your creditors.
There is also usually an administration fee which can range from a flat monthly fee anywhere from $10-$40, or others charge a per creditor fee of $5.
Either way, you're paying about $30 per month that doesn't go toward your debt.
What Are The Pros And Cons Of Debt Consolidation?
Pros:
If you can make the new monthly payment, this will stop the creditors from
calling you and keep the satisfied for the interim.
Sometimes your debts can be paid off years earlier with the lower interest rate.
Simplicity of one "smaller" payment to one company for all of your unsecured debt.
Cons:
Most Debt Consolidations plans make you cancel any and all cards you include in the program.
You may wish to exclude a card for emergencies, depending upon the company's policies. This may prevent further
debts in the future.
The payments are usually setup to last 4-8 years. It's not a quick fix, but it is a fix.
What is Debt Negotiation?
Debt Negotiation (sometimes called Debt Settlement or Debt Elimination) is mostly offered to
people who can't make the minimum payment of a debt consolidation program.
Many people who enter a debt negotiation are $20,000 or more in debt and haven't paid
the past 3 months.
Sometimes these are people who have been laid off or injured.
Once you sign up for a debt negotation program you stop making payments to your
creditors (if you were making payments).
The debt negotiation company then either takes monthly payments from you which it
stores up in a holding account, or it has you store up the money in your own account.
During this process of accumulation, the debt negotation company is handling
your creditor calls and negotiating with your creditors for a lower payoff amount,
typically around the 40-50% range.
Once a settlement is reached with your creditors, a lump sum payment is made to them.
What Are The Pros And Cons Of Debt Negotiation?
Pros:
Most debt negotiation companies also require the creditor mark the credit report as
"paid in full" so it doesn't show up negative on your report once it is settled.
Cons:
Your credit may be bad while you're in the program
If the creditor never agrees to settle (which is very rare) then you end
up with bad credit, and in worse shape than where you were before.
Some settlement companies offer a credit repair service (which you pay for, of course)
which will remove the negative items which were caused by the program.
How Do I Know I Am Working With A Good Debit Consolidation Company?
Check (or ask) how many years they have been in business.
Are they located in the US? It is easier to complain to the authorities about a US company then one that is overseas.
Check to see if they have a physical address (in the US) listed. If a business only lists a P.O. Box, maybe they have something to hide.
You can check with the BBB to see if they have a bad record. Here is a link to the BBB.
Where can I find a good debt consolidation or negotiation company that I can trust?
For debt consolidation, right now we
recommend you fill out free quote forms from a few different reputable
companies to shop around and get the best deal.
There is no charge or obligation when you fill out the free quote forms
or when you speak with the assistants who will call you to discuss your situation.
The three companies we recommend you get free information from are:
CuraDebt is a member of the BBB and Chamber of Commerce. Fill out their form if your
debts are $10,000 or more.
They work with a few different debt consoldation companies and two different
debt negotiation companies and
analyze your situation to see which would be best for you.
DebtAdvocates is part of the Intermark Media family of web sites. Intermark Media
has been providing debt services online for over 4 years.
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