 |
Bill consolidation is a general term and many debt relief services claim they will "consolidate" your bills. Consolidating your bills simply means you have taken many bills and either by using a loan, or by joining a debt relief program you are now just making one payment that is then paying all your bills.
Say you have 6 bills like various credit cards, medical bills and an old utility bill. You may take out a loan and pay off all of those bills, leaving only the loan to pay each month. In this sense you have consolidated all of your debts into the loan. Your debts of course did not go away you still owe the money to the lender. Detailed over view of Debt Consolidation Loans
In this two part service the credit counseling dept will evaluate your finances and attempt to help you create a budget to meet your monthly debt obligations without having to use a debt relief service. If however your debts are too large for the income you have, they may recommend (and they often do) that you join their debt management program.
In a the service has pre-arranged concessions with many creditors. These concessions consist of lowering interest rates, dropping late and over-the-limit fees, extending the term of a loan and more. All of these things are done to bring your monthly bill payments down to a level you can afford. These programs do not reduce your principal debt, they simply help stop the bleeding so you can catch back up. One of the most comforting benefits of a debt management program is that since the service is working directly with your creditors your collection calls should stop entirely. After you accept the terms of the debt management program, you will make one payment to the debt management service and they in turn will pay each of your bills for you according to the terms of your program. This is how you have "consolidated" your debts.
If you have had a financial hardship such as the loss of income due to job loss, sickness, injury divorce, or any unexpected life event, you could qualify to have your debts significantly reduced. In financial hardship cases where the debt is unsecured, the creditor is at risk the consumer will file for bankruptcy. In bankruptcy court unsecured debts are the LAST debts to be paid off with any money that may be left over from secured creditors, like a home, car, federal student loans and more. Bottom line, is that there is rarely anything left to pay off the credit card debts. This is why unsecured creditors charge such high interest rates, but also why they want to avoid bankruptcy court.
In the case of a legitimate financial hardship the creditors would rather verify that you have a hardship and if you do, they may negotiate with you to reduce your debt down to a level that you are able to pay off. In this case you reduce your debts, become debt free at a fraction of what you owe and your creditor receives at least a small portion of what is due to them. Both parties avoid the unpleasant and expensive process of bankruptcy court.
Even better news for consumers is that settlement programs to reduce your debts charge absolutely NOTHING up-front or during the course of your program. Credit counseling, Debt Management and some lawyer based debt settlement programs will charge up-front fees to start up with them and monthly fees to administer your account. These fees can total thousands of dollars and they are not applied to your debt. This puts you in a risky position, if you can imagine what would happen if your debts are not reduced yet you have paid for the debt relief service? What if you are not happy with the settlement they offer? Too bad you have paid in advance and you have no leverage.
In Success Settlement programs you are in control. Once you are fully qualified, which is free, you do not pay any up-front fee and there are no monthly fees! These programs can only earn money if and when your debts are reduced! So you can join a program, have the service work on your behalf and if they reduce your debts only then would you pay a service fee. Simply put, if they are not successful in reducing your debts you do not pay a dime.
If a debt is reduced the service fee is normally a flat fee that is agreed or it is a percentage of the debt reduction. In example: if you had a debt of $20,000 and that debt is reduced by $10,000 dollars, the service would charge a fee of 25% equaling $2,500. - This is an EXAMPLE to demonstrate the fee model only, not an actual reduction amount or fee percentage. In this example, you would be paying back a total of $12,500 for your $20,000 debt. You will have saved $7,500 dollars!
Like all debt relief programs there are financial and legal considerations.
If you would like to learn about the details of a success settlement, see if you're qualified and have your questions answered simply complete the request below. There is no cost and nor obligation, just pure information.
|
| Website Tools |
Change Text Size   |
| |
|
| |
| |
| |
|
|
|
No Up Front Fee Debt Relief Service
|
|
|
|
|
No Special Software Necessary
|
|
|
|
|
|
|
