Are you in debt, and striving for a little bit of help? Don't you wish that someone would simply swoop in and lift the entirety of your burden of debt off your shoulders? You've heard about several consumer debt reduction programs, for sure. But which one should you trust?
Can these companies really help you?
Can it be true that there are people out there who are ready to help you with your personal debt consolidation needs? Is it even possible for your debts to be consolidated into one low monthly payment, with all of your late fees eliminated? Can this company really polish my credit report of any stains I have picked up along the way? All of these are questions you have probably asked yourself.
The fact of the matter is that there are consumer debt reduction organizations in existence that are truly there to help. There are people that have giving hearts, and are truly in the business to serve their customers in the best way possible. However, there are an inevitable amount of organizations that are only out there to put you even further in debt. They see that you've been victimized by debt once before, and they're out to do it again. To them, you're an easy target. Finding a legitimate organization is crucial to your recovery from debt.
The types of organizations that you may want to avoid are ones that pay their employees on a commission basis. If employees of a debt consolidation company have their sights set on a big paycheck and slick bonuses, that company is going to hound you, almost to the point of begging for your business. That is where a red flag should appear in your mind's eye, and you should walk out the door without hesitation.
Legitimate debt reduction companies will work with your creditors to tidy up your monthly bills. It is worth noting, however, that while each creditor works differently with each individual consolidation company, they typically offer the same benefits to each consumer debt reduction company. In other words, one consolidation company will not be able to lower your interest rate any more than another one would. Don't sacrifice quality for convenience, though. Don't go with the first debt consolidation company that contacts you just because they can't do a worse job than any other company.
A big issue with debt consolidation is the extremely competitive nature of the market. Companies, especially the ones you should be skeptical of, will come at you harder and harder until they gain your business. Once they get it, the pressure that was once on them to make a sale is now on you to catch all of their hidden fees. And, much to your dismay, you might find that the wonderful things that they advertised as part of their service to you are not quite as freely available as they might have seemed.
Letters in the Mail
If you fall for a suspicious company, you may one day get a letter in the mail that you are guaranteed not to be happy. Sometimes referred to as "bump up" letters, these documents happily inform you that according to your debt consolidation company, your creditors changed their policies and now you must pay a greater amount per month to compensate. You may decide to shrug off the first letter you get, but be prepared to receive many more in the months to come. That attractively low offer that your consumer debt reduction company gave you to begin with just might become even more expensive than if you were not to consolidate your debt in the first place.
Debt consolidation organizations will try to reduce the rate of interest that you must pay back, but in reality it all depends on the types of debt you owe. The organizations typically get creditors to budge quite a bit, but they rarely are able to lower your interest rate to the amount that they advertised. Always remember this as a rule of thumb when dealing with debt consolidation companies: if it looks too good to be true, it probably is.
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