Debt Consolidation Debt Settlement

Be Wary of Many Companies in the Debt Consolidation and Debt Settlement Business

In the wake of investigations by various agencies and a lot of bad press, many companies billing themselves as credit counseling agencies now use names such as debt consolidation and debt settlement, among others. In many cases, they are still trying to squeeze some cash out of you before you totally crash and declare bankruptcy. If you're in financial trouble and seeking help, be very careful about where you look.

This site will help you find a qualified, ethical and trustworthy debt consolidation and debt settlement specialists who can aid you in developing a personal debt solution. Simply complete and submit the form found on this page as a first step toward building a healthy financial future.

Debt consolidation is a process by which you roll all of your unsecured debts into one lump sum and make monthly payments. If you have equity in an asset such as a house or car, you can elect to secure your debts, making your asset subject to loss if you default, but likely reducing your interest rate and fees.

Some individuals qualify for a loan from a bank or other lender for their unsecured debt, but usually by the time you're in over your head, it's hard to qualify from a traditional lender. Enter the agencies that specialize in taking advantage of your woes. They will help you consolidate your debts by negotiating with your creditors for lower interest rates and a longer time to pay. The debt consolidation agency will usually ask for one monthly payment from you and they'll in turn send it on. The problems with this service usually include:

• Extra charges that are often hard to find without digging into the fine print;
• You have minimal control of when the payments are sent;
• If the agency sends them late, your credit report looks even worse;
• Using an a company that is unethically claiming non-profit status;
• Putting you even more deeply in debt

The best advice to follow when considering these services is Do the Math!

Debt settlement is usually handled by the same type of agency. They will offer to negotiate with your creditors and get them to settle for a portion of what you owe…for instance sixty cents on the dollar. To the consumer in a panic, such a deal may sound wonderful. Unfortunately, once again they may be being taken advantage of. Tips to consider:

• You can try negotiating with creditors on your own…they're your bills after all and you know what you can afford;
• The debt settlement firm will likely charge you additional fees for their services;
• You're paying someone for a service that may not completely solve your debt problems

In summary, be very cautious when seeking outside help for debt consolidation or debt settlement. If you have no other options, consult your state's consumer protection division, and the Better Business Bureau in the home state of the service.

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