Articles Archive for December 2009
Choosing the right consolidation company is an important decision that you need to make during debt consolidation. There are both for-profit and non-profit debt consolidation companies operating in the market.
Debt consolidation in a non-profit way:
There are debt consolidation non profit firms that are certified by the IRS as charitable organizations that can help you in consolidating your debts. These companies have obtained 501(c)(3) charitable status from the IRS. Check the company’s ‘About us’ page to make sure that they are indeed a non profit organization.
How do they manage to work in non profit manner?
The word “non profit” may create an illusion in the mind of the customer. In this world where nothing comes for free, how can these companies survive as non profit? Well, the word non profit doesn’t necessarily mean that the service is free of cost rather it only means that there wouldn’t be any overall profit for the company at the end of the negotiation.
These debt consolidation non profit companies are normally funded by donation, and not a business cash advance, from the customers as well as creditors. Creditors would pay a percentage of the settled amount to the non profit organization for their services. Some companies may also charge nominal fees from the customer.
How would they help you?
The debt consolidation non profit companies don’t work very differently than the for-profit ones. You would be assigned to a case manager who would look into your debt situation and guide you accordingly.
You would then be presented with an agreement which would explain how your consolidation program would work and how much you would need to spend for it. Once you agree to the contract, the counselor would then negotiate with the creditors to lower your interest rates.
You are required to make monthly payments which then will be disbursed amongst your creditors to satisfy your debt obligation. The advantage of this program is that it will stop harassment from the creditors.
Anyway, even to do debt consolidation non profit way you must look at few companies before joining one since there can be many sham companies too. Hence, check out the past record as well the authenticity of the IRS certificate before joining their program.
This is a guest article by author Robin Williams.