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How to Find
the Honest Debt Consolidation Programs
Debt consolidation programs claim to help families and individuals avoid
bankruptcy by consolidating debts into one monthly installment. Some programs
offer first-time free counseling, which includes debt information and
information on how to reduce or eliminate interest rates on credit cards. These
programs will assess your needs carefully,
claiming to search for the best plan for you.
After your information is analyzed thoroughly by a qualified representative,
they will then begin to develop a strategy to help you budget your income so
that you can payoff your bills and increase your income. These organizations
will help you keep records of your spending, learn how to prepare for
emergencies, and at the same time, help you to manage your debts.
Furthermore, the companies that help you organize may see a need to refer you to
qualifying debt management programs that offer counseling. These counselors will
contact creditors on your behalf, including business creditors, legal creditors
to negotiate, and arrange lower monthly fees, including rates of interest.
The programs may even ask for waiver on fees for late charges, and will ask for
elimination of accounts past the seven-year guideline. Once the plans are set in
motion, they may require you to send one monthly installment to the debt
consolidation agency, which then will then be broken down into payments and sent
in the arranged amounts to each creditor.
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As you can see the plans seem amicable; however this is not
always the case: some programs will charge up to $70 per month, plus interest
for helping you get out of debt. This means if your plan is to repay $500 per
month, then only $430 of that amount will apply to your debts after and/if the
programs charge interest rates and also after the rates of interest are deducted.
In this event, maybe only $400 is giving to the creditors, which means you are
paying out $100 each month simply for debt servicing.
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