When paying off debt is a priority, investigate every option claiming to provide help. Companies are available to assist you with the process of paying off your debt, but finding legitimate debt consolidation help can be tricky. With so many consolidation options from which to choose, it is not always easy to know which companies offer real assistance and which companies just want to profit from your financial hardships.
Researching Debt Consolidation Companies
After you get referrals from friends and financial professionals or complete a search of debt consolidation companies in your area, it's time to learn more about each company. Start by looking for information on the company with your state's Attorney General and the Better Business Bureau. Although an absence of complaints on file doesn't guarantee a legitimate company, it does help you eliminate companies with poor service records from your list.
What to Look for in a Credit Counselor
Ideally, you want to work with trained credit counseling professionals to ensure success. Your financial institution may provide debt consolidation training its lending staff, but you can also find a professional through other means. Contact the United States Trustee Program for a list of approved bankruptcy counselors. Even though bankruptcy may not be a current consideration, working with an approved counselor provides added peace of mind.
Comparing Debt Consolidation Services
Before you make a decision, find out what services each company offers. While your primary objective is consolidating your debt, a company that can help you change the habits that caused the debt is more useful than a company only interested in the consolidation. Remember that either company will charge a fee for the program, so you may as well get as much for your money as possible.
Learn the difference between a debt consolidation services and debt negotiation services. Many legitimate credit counselors will negotiate lower interest rates and fee reductions with your creditors as part of their programs, but be wary of anyone who charges an additional fee to perform this service. It may not be your favorite thing to do, but you can call your creditors directly to negotiate interest rates and payment plans without paying a dime to anyone.
Determine if the consolidator's terms are reasonable. Do they charge higher debt consolidation service fees than other companies? Does he tell you he can take care of everything or erase your debts without offering details about how he does it? The bottom line is that no one can make your debts go away. If a consolidator makes promises that sound like a miracle, it's probably a scam, or at best extremely misleading.
The way your credit counselor treats you during the consultation is every bit as important as the terms she offers. A legitimate debt consolidator will take the time to review your financial situation and make recommendations based on her analysis. If, on the other hand, she offers you a high interest loan to pay your debt or starts selling you her debt management plan without looking at your finances, it's a blinking neon sign not to do business with this company.
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