How Does The Bad Credit Debt Consolidation Agency Get Paid

Category: Finance, Credit.

Debt consolidation counselors are standing by to help you get out of debt by working with your creditors to lower your monthly payments and reduce or eliminate your interest and penalties! How many times have you seen that commercial on television or heard it on the radio while you were sitting in rush hour traffic on the interstate?

Call Now! Bad credit is big business for an ever increasing number of companies across the United States and while they promise you the world, you should know exactly what they can and can not do before signing on the dotted line. Here s a quick rundown of how they operate: The debt consolidation counselor evaluates your existing financial situation including your credit history, existing debt and even your income. The prevailing majority of bad credit debt consolidation companies are profit making organizations and as such they are" in it for the money" . When you enter into an agreement with the company, they will begin speaking with your creditors directly on your behalf, explaining who they are and working with them to lower your interest rates and stop penalties for past due balances and late payments. NOTE: You will still receive your monthly credit card statements, and you should always check them carefully to ensure that your debt consolidators are paying them the right amount and that no additional fees are being accrued. You will send a monthly payment to your debt consolidation company who in turn will pay each of the creditors.

How does the bad credit debt consolidation agency get paid? This fee will vary depending on the company you work with, but it can be as much as ten percent( 10% ) or more. In most cases a percentage of your monthly payment is taken off the top as the agency s fee. Do I Have A Choice? Even if your situation makes you feel as though using a debt consolidation agency is your only option, let me assure you that you do have a choice, no matter what a salesperson may tell you to the contrary. It is easy to feel helpless and defeated when the bills start to pile up and you just can t see the light at the end of the proverbial financial tunnel. There are non profit credit counseling agencies whose sole purpose is to help people who are having money issues.

A non profit counseling agency will evaluate your overall financial picture and offer suggestions for ways to improve the situation. In some ways they work much the same as a for profit debt consolidation company but with a few major differences. They will help you to understand how you got in to the position you are in and then assist you with creating a budget that you can live with. For example, my credit counselor years ago suggested that I purchase a$ 12 coffee maker instead of spending two or three dollars a day on coffee during the course of a day. In some cases they might suggest ways for you to reduce your monthly expenses. She showed me how at that rate I would pay for the coffee maker in the first week, and have an extra$ 45 at the end of the month.

The final decision is yours to make, but be sure to avail yourself of all of the information before you choose. At times they may refer you to resources in your community that may be able to help.

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