We’ve all seen commercials and ads for debt consolidation services. In an era where debt is a way of life for many Americans, a variety of debt consolidation services have developed.  As there are in every industry, some are non-profit organizations, others are for hire, and still others are looking to swindle you. Typically, these programs will contact your creditors to renegotiate the debt you currently hold.

Non-profit organizations are the most beneficial.  These services are especially helpful for those contemplating filing bankruptcy.  You won‘t take on any extra debt, as they aren‘t charging you for their services, which means you, and ultimately your creditors, only stand to make gains.  Keep in mind, though, that while your debt is being consolidated and paid down, your credit cards will be frozen.

Make sure you have the information necessary to go through with the process; you should have your bills and the minimum payments due available to you.  Make a list of all of the account numbers, as well.  Providing documents for each credit company will likely be required.  This may seem like a hassle, but these companies know what they’re doing, and they do it well.  Debt consolidation services can negotiate with these companies in a way that you would be unable to, making their services invaluable.

Things to Watch for

There are some debt consolidation companies that are legitimately looking out for the best interests of the consumer.  That doesn‘t mean there aren‘t some bad apples.  When a customer goes to a debt consolidation business, these bad apples will explain all of the wonderful things they can accomplish that non-profits cannot.  After you’ve paid and left, though, the problem begins. The money you thought would go to your creditors has done no such thing.  Collections agencies resume the phone calls, and the consumer is left in a worse situation than before.

Just be sure that if you do not use a non-profit service that you thoroughly vet the company you‘ve selected.  Non-profit organizations ARE the best option, though. 

 

Here are some more debt consolidation services resources...