Welcome to Debt Guide
Free Debt Counseling Article
. For a permanent link or to bookmark this article for further reading, click here.
The Costs, Risks and Dangers of Debt settlement
Debt settlement companies usually offer a lot of promises.
There are ads that promise to free you of all debts in less than a year. Some promise to chop off more than half of your current debt. This makes people assume that debt settlement is a miracle cure. This is not the case. If you’re already in a lot of debt, you would do well to learn about debt settlement first. You don’t want to get yourself into even more trouble.
Typically, people hire companies to help them with the debt settlement process.
Debt Settlement: The Process
Debt settlement seems like an easy process. You begin it by calling up a debt settlement company. In the call, you tell them about your debts. You can also inform them about why you’re finding it difficult to meet the payments as well as other information related to your financial capabilities. Lastly, you should give the debt settlement company a list of all the creditors to which you owe money, along with the exact amount of each debt.
The debt settlement company will respond with an estimate of how much your debt can be reduced. The company will also tell you that you have to pay the company a certain amount each month. They will offer a monthly payment that is much lower than your current monthly debt payments. To end the call, the company will inform you that they will settle all your debts so you no longer need to make payments to your creditors.
When you start making the monthly payments, the money goes directly to the company. The first four payments will be considered as your payment for the company’s efforts in processing your case. The rest of the payments will simply go to your account and accumulate in time.
Once your account reaches a certain amount, the company contacts your creditors. This is the beginning of the negotiation between your creditor and your debt settlement company.
Disadvantages of Debt settlement Companies
The problem with debt settlement companies is that while you are paying to them, they do not contact your creditors at all. Debt settlement companies wait for at least six months. The companies wait for the accounts to be charged off.
Since your creditors would rather have a little money than let you off the hook, they’d be more than willing to negotiate. While the debt settlement companies wait for your account to be charged off, your missed payments will still be reported to credit bureaus.
Even when the debt settlement company has paid your debts, the records of your delinquent payments will remain on your credit report. The account will also be marked as ‘Paid-Settled’ and not as ‘Paid on Full’.
Because of the negative entries on your credit report, it may take a few months or even years before credit companies will consider giving you another loan.
Free Debt Counseling Specific links
Free Debt Counseling News
American Consumer Credit Counseling Provides Free Budgeting Education as Part ... - PR Web (press release)
American Consumer Credit Counseling Provides Free Budgeting Education as Part ... PR Web (press release) American Consumer Credit Counseling was in Fall River this past Saturday providing consumers with important information on developing smart spending habits. The Newton based non-profit served as one of several key community organizations who ... |
GreenPath Debt Solutions Takes Part In Government Housing Counseling Study - MarketWatch (press release)
GreenPath Debt Solutions Takes Part In Government Housing Counseling Study MarketWatch (press release) But they're not surprising, because we see first-hand the benefits that our clients receive when they speak with one of our counselors." Briggs-Kelly went on to say that the results further validate the value of free housing counseling and the need for ... |
ClearPoint Alliance with Housing Opportunities Collaborative Helps Bring Vital ... - Virtual-Strategy Magazine
ClearPoint Alliance with Housing Opportunities Collaborative Helps Bring Vital ... Virtual-Strategy Magazine ClearPoint Credit Counseling Solutions (CCCS) is proud to announce a partnership with Housing Opportunities Collaborative (HOC) to jointly promote access to housing services and education throughout the region. To celebrate this occasion, ... |
Credit Counseling Can Help Keep Debt under Control - MarketWatch (press release)
Credit Counseling Can Help Keep Debt under Control MarketWatch (press release) Finding yourself deep in debt can happen quickly without a plan, so before considering any credit card purchases, sign up for a free budget and debt counseling session with a reputable nonprofit credit counseling agency. Nonprofit credit counselors' ... |
Financial advice: Start your financial planning with these money strategies to ... - Newsolio
 Newsolio | Financial advice: Start your financial planning with these money strategies to ... Newsolio You can contact your local consumer credit counseling service for free budgeting information. There are many organizations on the internet which offer free services about budgeting, and learning how to really budget. While many people think that ... |