Non-Profit Debt Consolidation - Is It Right For Me
Non-Profit Debt Consolidation - Is It Right For Me?
Despite our best intentions to stay within a budget, sometimes the unexpected happens and an interruption of our income could cause us to fall behind on our payments and financial commitments. Things like accidents or getting sick can result in financial setbacks. An injury to you or the primary bread winner of your family could keep you from working and escalate medical expenses you haven't budgeted for.
This kind of setback may be more for you to overcome on your own. If your financial prospects seem bleak and you don't see hope for financial recovery, paying your debts and restoring your credit credit, you might want to consider using a non-profit credit counselor.
Credit counseling isn't for everyone, but credit counseling shouldn't be overlooked as a solution to mounting debt as a result of late fees, high interest rates and associated fees and penalties, whether it was caused by illness or unemployment. Some non-profit credit counseling services require that you have a minimum level of debt before they're willing to work with you.
Here's what to expect if you decide to use the services of a non-profit credit counseling service.
After you contact a credit counseling service, you'll talk with a certified credit counselor that will assess your financial situation by asking you questions about your monthly bills, your monthly income and other financial obligations. In some cases, a credit counselor may request to make a personal visit to your house to talk to you privately about your financial future.
After talking with you in depth about these things, he or she can ascertain your financial situation, your capacity to repay and whether or not you qualify for credit counseling services. At this point the non-profit credit counseling can fabricate a plan to repay your creditors in a timely fashion.
If you qualify and decide to follow through with credit counseling, the representative you're working with will contact your creditors to negotiate, eliminate or reduce the amount of late fees and/or interest rates. In many cases, credit counselors can lower your outstanding debt by fifty to eighty percent.
After the credit counselor crunches the numbers, he can determine how much you'll need to pay monthly to significantly reduce or eliminate your debt. As part of the counseling process, you might be required to cut up or cancel your credit cards so that you don't run your debt up again. All of the details, such as your payment amount, payment date and other terms should be clearly disclosed and understood before you sign an agreement with a credit counseling service.
It's worth noting that just because a credit counseling service advertises itself as being 'non-profit' doesn't necessarily mean it is free of charge. Usually these firms charge you a fee for their services. This fee is normally built in to the monthly amount you agree to pay them. Again, be sure that you understand the terms of the agreement you're signing so there aren't any surprises later. Clarify the amount you're required to pay, your due date and when the company will be issuing payments to your creditors, since they will assume the debt and make payments on your behalf from then on. Also inquire if it's possible to pay the consolidation loan off early, should your fortunes change.
If you have questions concerning your debt consolidation your credit counselor should be available to you until your debt consolidation reaches a successful completion. Often credit counselors offer advice and teaching tools to help you revise your financial strategies, and address spending and debt habits to help you establish a workable budget.
A workable budget can help you quickly gain sound financial footing and reduce past and present debt. As part of the consolidation process, both creditors and the debt consolidation firm will send you a monthly statement that breaks down the disbursements to your various accounts so you can see how your debt is being eliminated.