All Debt Consolidators Are Not Created Equal
In recent years many
horror stories have surfaced where so-called Debt Consolidators
agencies have swindled consumers out of large amounts of money.
This should not
be a reflection of all credit counseling services for much good
can be accomplished
when the right agency is paired with the right consumer.
But finding the
right agency can be as difficult as solving debt help problems on
There are literally
thousands of debt consolidation agencies out there offering what
seems to be the same service.
So how do you find the "jewels" among the "rotten apples?"
But don't kid
yourself. Much of the information contained on
this page) is not readily available, simply because the rotten
apples will not publish
this kind of information.
FREE DEBT CONSOLIDATORS PROGRAM
Debt Consolidation Management program can help you:
- Reduce your
monthly payment amounts
- Reduce or
- Improve or
- One lower
- No home
ownership or credit check
- No obligation
- Path to becoming
to fill out a short form for free consultation.
Make The Mistake That Can Cost You Dearly
We took a survey
from a thousand consumers seeking debt help and presented them
with one simple question.
When shopping around for Debt Consolidators, what are you
primarily looking for?
Almost 99% answered
"I'm shopping for the lowest monthly payment"
Big mistake! There
is no lowest monthly payment in debt consolidation. By seeking
lowest quote from an agency, consumers are often lured into
signing up with one of the
so called "Rotten Apples." Let me explain:
An established Debt Consolidation agency obtains agreements with
major creditors. For credit repair see us.
The monthly payment is determined by the percentage of debt that
creditor is looking for every month to qualify the consumer for
the program. There are
also guideline set for consumer loans and all other
types of debt that qualify for a debt
These guidelines are
set forth by the creditors and apply to all reputable Debt
Consolidators management agencies that have those agreements in
If a creditor changes their guidelines (and they sometimes do),
all Debt Consolidators
that have the agreements are notified.
So if a consumer
receives monthly quotes from several reputable agencies, the
should be about the same and may only differ by $1 to about $20
per month, depending
on the agencies fees. The payout to the creditors are always the
unless the consumer has extra funds that they want to disburse
and get out of debt
So Why Do
Certain Debt Help Agencies Offer A Significantly Lower
Let's say a consumer
receives a quote from 4 different agencies, 3 of which quote the
consumer about a $350 monthly payment based on their debts and
the other quotes a
$200 payment for the same debts.
How can this be possible? After all, we are talking about the
same creditors with the
same amount of debt owed.
This is not
possible, and a consumer red flag should be flying high!
skills are better than the rest" claims the low quote agency.
What negotiations can possibly take place if the creditor
guidelines are the same for
all Debt Consolidators?
In reality, there
are no negotiations that take place, other than the agency
the acceptance of the consumer into the consolidation program,
which is achieved with
a standard letter of proposal.
So why do some
agencies offer a much lower quote? Several reasons:
This tactic is used to lure the consumer into signing up
and paying set up fees.
In turn, the agency will pay the creditors less then they
require. Now, if the
creditors do not receive their minimum requirement, they
will charge penalties
to the account and the consumers debt is now increasing
rather then decreasing.
After a few months the creditors will start sending payment
increase letters and
demanding to be paid according to their guidelines.
The agency will then tell the consumer that the creditors
want more money or
they will discontinue the program. Now the consumer is stuck
with a larger
payment that they usually can't afford and end up
quitting the program.
The agency keeps their set up fees and the consumer ends up
in a worse
situation than before.
This is when a consumer tells the agency that they can
not afford the monthly
payment and the agency recalculates with a lower quote. The
agency will place
the consumer into a hardship program where the tactics are
to low balling the creditors.
When a consumer tells an
agency that they cannot
afford the amount quoted,
a reputable company will advise
them to look for
Settlement In Disguise
debt settlement can be very advantageous, it becomes a
when a consumer (who is concerned about their credit) is
tricked into it.
occurs when the consumer is quoted a monthly payment
that is half or less,
than any other debt consolidation agency provides.
In short, the consumers payment is not disbursed to the
creditors at all.
The payment is kept until all accounts are turned over to
collections. Then the
agency settles the amount of debt usually 25 cents on the
dollar and keeps all
the remaining payments and fees made by the consumer. There
are other tactic
variations with debt settlement used by different companies, but
non of them
good or beneficial to the consumer who want to be debt free
a good credit rating.
Settling a debt is as adverse to your credit as bankruptcy.
In both cases the debt is
not satisfied like in debt consolidation.
So it makes no difference whether it states on the consumers
"Settlement" or "Bankruptcy". The negative effect is
virtually identical because the
consumer did not pay back what they originally owed.
Debt settlement can be advantageous if done properly by a
To learn more, see our report on
How to use Debt Settlement to your
With a little common sense, these type of tactics can be
Especially when the monthly quote, multiplied by the months
quoted, is less
than the debt owed.
tactics use by the so called rotten apples in the debt help
industry that are
described here are a general overview of what sometimes goes on.
There are many other
inventive ways to trap a consumer in need of help.
The goal of this report is to simply make everyone in need of
help aware, so that they are
get the help they deserve.
If you are in need
of help with debts and unsure of where to go, we can provide you
a free analysis of your situation and an accurate monthly quote
if you decide that
Debt Consolidation is right for you.
click here to fill out a short
form. Your consultation will be provided at
no cost or obligation and all your information is strictly
Of Fees Should One Expect To Pay Debt Consolidators
There are usually
two type of fees involved when signing up with Debt
Even non profit agencies incur substantial cost when
setting up an account for
consolidation. Most will charge a
$299 one time
set up fee.
This is normal and should be expected.
Certain agencies will ask for a set up fee that is equal to
the monthly quote and
refund it upon completion of the program. That's even
better. Just make sure you
are provided with a refund certificate in writing. Anything
above $299 that's
refundable is too much and should be avoided.
The monthly quote should always include the monthly
Some agencies charge a set fee (should not be more than
about $39 to $49) while
others will charge a per creditor (usually no more than $8)
Keep in mind that
if a consumer is signed up with a non profit organization,
paid to them are considered donations and are 100% tax deductible.
With this in mind, the program is free to the consumer.
Other Criteria To Look For
When Seeking Out Debt Consolidators
Make sure the
agency and/or part of the agency that deals directly with
many financial firms offering debt consolidation programs
Many of these companies are "for-profit", unregulated
businesses. If a company is
not being subsidized by the creditors, they must collect all
from the consumer. Many creditors will not work with
for-profit agencies or give the
same concessions to their clients.
A non profit agency has a stronger relationship with
creditors and is able to obtain
the lowest payment and interest rates without any
sure the agency does not report to Credit Bureaus
Certain agencies are structured in a way where they work
for the creditor and
consumer. In turn they report to credit bureaus.
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