Best Debt Consolidation Companies For You

Debt consolidation is a method of regaining control over what you owe. It will be crucial to employ the help of a debt consolidation service you have faith in and one that inspires your confidence too. How can you locate the best debt consolidation agency for yourself, and for your personal finances? What are the factors that ought to be considered in evaluating different services? Certain decisions are more personal, while others are strictly business.

Don’t make the mistake of selecting the very first debt consolidation company you come across; rather, do some research and allow yourself to make an educated comparison between several debt consolidation organizations. The same search strategies that you would use to locate a mortgage company or a financial advisor should be used when you undertake this research. Be meticulous in your methods and precise in what you want. Jot down the different services you are contemplating, and research with the BBB in your area to find if they have any complaints filed against them. With techniques like this one, it is possible to ascertain whether the company’s service will be to your satisfaction.

On a more personal basis, initiate conversations with the experts at each company and jot down your reactions. Assess whether you have a sense of faith in those you talked with, and just as critically, whether they seem to know what they’re doing. Debt consolidation is a serious issue, and the top debt consolidation services possess expertise and confidence to assist you in devising a plan that suits you.

Incidentally, by investigating and comparing the top debt consolidation firms in the industry, it is possible to decide which one best suits your circumstances and offers the most affordable rates of interest. Still, it is wise to use a reliable and honest debt advisor prior to your decision-making, since their expert advice can help you get results quicker.

Debt Consolidation Companies FAQ

Question: Do debt consolidation companies pay off credit cards that are already in the hands of a law firm/collector?
Chase filed a law suit against my husband for a delinquent credit card. He never had to go to court but they (the law firm) wanted $300/mt until the card was paid off. We’re still paying on it and it’s a huge budget buster! We only have a few other outstanding/low amount bills. I was wondering if debt consolidation companies would consolidate this Chase bill as well so we can get these people out of our lives!

Answer: The truth is: no.

You have 2 options: First, a loan (either a personal loan or refinance a mortgage if you are a home-owner) and you will not qualify based on credit in your situation.

Second, a debt resolution program like credit counseling or debt settlement. Neither would be ideal since you don’t have a lump sum contribution to settle and the account is already in a stipulated judgment status.

You are best off just calling the law firm and negotiating for a one time settlement directly with them. Assume it will be somewhere between 80%-100% of what you owe.

Question: Has anyone actually had success using those debt consolidation companies?
I’m wondering if anyone has had any success using those debt consolidation companies and if so, what’s the process of it? How does it work and will it really work at lowering your interest rate/debt owed? And what company(ies) did you use?

Answer: Don’t do it! I know a ton of people who used those so called “debt consolidation” companies who went further into debt over them. No matter what, you will always owe what you did not pay.. .often they promise to remove things from your credit…..don’t fall into this, you can dispute inaccurate things yourself. In the long run, you may end up owing the debt consolidation company itself….which could be worse!

Question: Credit card debt consolidation companies, Anyone know of a good one?
I’ve become over whelmed with my credit card debt and I’m getting those phone calls because I’m missing payments and such. Anyway I’m looking for a credit card debt consolidation company that doesn’t screw people over, anyone know of any from experience or just know a good one?

Answer: Most of these places are scams. Call your credit card companies and tell them that you are in danger of bankruptcy and you would like to work out an alternate payment plan. The regular customer service people usually can’t do this, ask for loss prevention. They will probably freeze your account so that you can’t use it anymore and then set up a payment plan. They want to avoid you being pushed into bankruptcy because then they lose their money.

Question: How do debt consolidation companies make money?
I wonder I always hear on the radio claims that company A reduced my debt from 40,000 to 10,000
How is that possible? And how do these companies make their money?

Answer: They charge you a fee to handle your situation. That’s how they make their money. Sometimes they work their fees into your monthly payment and the total still comes out less than if you were trying to pay all the bills separately.

Nobody legally reduces their debt from $40K to $10K without filing bankruptcy. Beware of those exaggerated claims.

If you are really behind in payments and the creditors think you are a heartbeat from filing bankruptcy, they will negotiate to reduce the amount you owe by about 30-35%. That’s how the consolidator gets your debt reduced, but not by 75%!

Question: What are some good debt consolidation companies?
I just recently pulled my credit report and have some charge off’s that I would really like to pay off in order to increase my credit score. I am very concerned with companies that try to scam you and you end up paying more in the end.

Answer: The easiest method of getting a debt consolidation loan is to utilize the equity of your home. Equity of your home is calculated and determined by the difference in the amount you have paid and the amount you owe. If the amount you have paid is more than the amount due, you can use it as collateral. This allows you to borrow money on lower interest rates. Besides, you also get tax benefit on this type of loan. Consult your tax advisor before opting for this loan.

Question: Do debt consolidation companies really help that much?
My husband and I are WAY in debt and I have been trying to talk him into doing debt consolidation cause at the rate we are going, we won’t be able to buy a house until our kids are all out of the house!! The thing is, he doesn’t believe they actually help all that much and that we would be better off paying it off ourselves. Is it true that they can work with credit card companies to reduce or even remove APR from the debt amount and can give you an estimate of when you can be debt free? We have four credit cards that equal about $25,000 and we’ve got to the point where we are making payments just so we can get food and gas. Any debt consolidation advice is greatly appreciated!

Answer: I highly recommend debt consolidation, but only through a bank. If you continue to keep paying the minimums on the cards, you will never be debt free. I went to my bank, explained my situation honestly and asked for help. They paid off all of my credit cards and bills and put it all into one payment. It freed up a great deal of money each month, as I only had one payment. Then they gave me a visa with a lower limit that I agreed to pay off each month. It’s the smartest move I ever made, believe me, you will never get out of debt the way you are going….you need your bank’s help, and if they won’t do it, find someone who will. You will have the money to purchase a home much quicker than you think if you ask them to help you come up with a savings plan….also if the bank knows you will get your mortgage through them, they will be more willing to help you.

Question: Is it worth to use those debt consolidation companies for tax relief?
I want to get all my financials squared away with the IRS– anyone know the average rate those “tax relief” companies charge? Are they worth it??

Answer: Debt consolidation companies may be able to help with other creditors but can’t get you any relief from taxes because IRS will demand payment ahead of unsecured creditors. You or someone authorized to represent taxpayers would have to handle that job. The tax relief companies that advertise on TV seem to promise that they can get you a pennies on the dollar deal and sometimes can but can never guarantee it. For a typical tax delinquency you are probably looking at fees in the $4,000 range, plus or minus a thousand depending on how much you owe. I cringe at those rates since they are about three times or more what I charge my clients.

Question: How does the debt consolidation companies work?
i heard that i will have to file for Bankruptcies.

Answer: Debt consolidation means combining all your debt into one big sum, paying off all your credit cards, etc. and then paying it back over a longer period. The debt doesn’t disappear: you still have to pay it back, but you make one payment to one lender rather than lots of smaller payments to credit cards.

It doesn’t mean bankruptcy if you keep to the loan agreement. The trick is to use debt consolidation to get out of debt – don’t use it as an excuse to keep on spending!