Can a Nonprofit Debt Consolidation Firm Really Offer Free
Services?
The nonprofit debt consolidation firm
term may be a vague term to you. As the name implies, you probably guess
it is a nonprofit company that consolidates debts. But what exactly is a
not for profit debt consolidation company?
A non profit debt consolidation company bails out debtors who are deeply
in debt. They exist to help you save or repair your credit rating and
keep you from foreclosure or bankruptcy. These services range from
lengthening the pay-off term to reducing the rate of interest so that
you can reduce the amount you are paying to your creditors each month.
"Non profit" is not equal to free service. In addition to one monthly
payment to cover all of your debts you will have to pay them a monthly
service fee. They will see that all of your payments are made on time
and you will receive monthly statements from your creditors and a
monthly statement from the debt consolidation service.
Nonprofit Debt Consolidation Company Scams
While it is worth the fee to get out and stay out of debt, as with
any business you need to beware of scams. In recent years, the Federal
Trade Commission (FTC) has slapped fines on numerous fraudulent
companies masquerading as nonprofit debt consolidation organizations.
The following are claimed made by "nonprofit" consolidation
companies: nonprofit service, reduce debt, better than bankruptcy, and
no impact on credit rating. Those claimed oftentimes are only tempting
promises and customers, who fall for it, are in for a disappointment.
So, ponder carefully on the claims made by these companies. Do they
sound too good to be true? If so, they probably are. Just because they
are nonprofit doesn't mean they're not earning from their clients. These
companies can easily overstate their operating expenses to make their
financial report reflects illusionary break-even margins.
Legitimate Nonprofit Debt Consolidation Firms
Are there truly legitimate debt consolidation companies? Yes, but
they're rare.
If you want to find good agencies make sure you are
dealing with a reputable company that belongs to the Better Business
Bureau. This institution will be able to tell you whether a debt
consolidation company is for real or not by the number of consumer
complaints filed against the debt consolidation firm you plan to
contact.
When you approach a reputable company they will provide you with
qualified debt advisors, who will guide you appropriately. They offer
educational programs to teach you the way credit works and how you can
make it work for you. Only the nonprofit debt
consolidation firms that are equipped with the experts who know your
creditors will ultimately be beneficial to you.
