Frequency Asked Questions With Debt Consolidation

By | April 14, 2011

Will I get a loan?
No. Debt consolidation is not a loan. Our debt consolidation service is a managed program that allows you to pay back your debts with good credit management. Refinancing and second mortgages can put you at risk to lose your home.

Does your credit management program charge a fee?
We do include a small monthly fee with our services. This low monthly fee will not change regardless of the amount of creditors you have. Even with this fee included, your monthly bill may be considerably lower that what you currently pay. You end up saving in reduced interest charges and other reduces fees. Plus, you end up paying your debt off years quicker, possibly saving you thousands of dollars.

What is debt consolidation?
Debt consolidation is the process of working with a Debt Repayment Representative who will negotiate your debts into a single, lower monthly bill. We negotiate lower interest rates and reduced charges so that your new payments are lower than what you currently pay. With debt consolidation, you don’t receive a loan – you get a set plan for repaying your creditors years faster than you could on your own.

Are you a collection agency?
No. We negotiate with your creditors to end collection calls and to assist you in paying off your debts. In most cases, creditor harassment stops when you enter the program. Some creditors require several payments before retracting collection agencies to make sure you are committed to the repayment plan. In either case, we are not here to harass you, we are here to help.

Can you repair my credit?
Yes, we have a section on that called the Credit Report Series, When you enroll in a debt consolidation program, you are helping yourself to improve your credit. Your credit history stays on your credit report for seven years, so only a positive history and time will mend your credit unless you take some steps to improve it. Debt consolidation makes it possible for you to reduce your payments so you can pay off your bills years quicker than paying on your own. Up to date accounts will reflect on your credit report and begin to restore your credit.

What can I consolidate?
You can only consolidate unsecured debt, meaning debt that is not backed or underwritten by an asset. Generally, this means credit card debt for most people. Other types of unsecured debt that can generally be consolidated are department store credit, medical bills, bank and finance companies, unsecured personal loans, and gas and oil credit cards. Bills that cannot be consolidated include mortgages, auto loans, and co-signed loans.

Why shouldn’t I choose bankruptcy?
Bankruptcy is usually a last resort because it has long term negative implications. First, bankruptcy remains on your credit report for 10 years. Bankruptcy also means that you will not repay your creditors. This looks especially bad on your credit report. Instead, your assets are sold off to repay your debts. You can lose many of your possessions and your credit can be so damaged that you may have a very difficult time regaining them.

Can you stop collection agency calls?
Once we inform your creditors that you are in our program, collection agencies should stop calling you. Some agencies require several months’ worth of payment to recognize your commitment. Since you will be up to date on your bills and making steps to pay off your debt, collection agencies will have no need to contact you.

How long does the program take?
The length of time you are in the program varies depending on your amount of debt and the amount you are able to pay each month towards your balances. However, the average length of time a person is usually enrolled in debt management program is 32 months. This is considerably less than the 15-45 years it can take to pay down your debts by making the minimum payments.

How are creditors paid?
You will have one, predetermined monthly bill that you will pay to us. We will then take that money and disburse it to your creditors for you. This way, you only have to pay one bill each month. Also, the amount of your bill will be less than the sum of all of your old bills put together. This allows you to pay off your debt more quickly.

Can I pay more if I have more money?
If you would like to change the amount of money you are paying each month, simply contact us and we will change your payment structure. You can always pay out more money towards paying off your debts!

 

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