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Debt Relief – Insolvency – Bankruptcy Information » Debt Consolidation and Refinancing, Featured Articles » Is debt consolidation a legal way to eliminate your debt?

Is debt consolidation a legal way to eliminate your debt?

Debt consolidation is a process where you can consolidate your multiple payments into a single monthly payment to make it affordable to pay off. In a debt consolidation program a proficient debt arbitrator negotiates with the creditors to lower the interest rate on the principal balance thereby lowering your monthly payment to make it unaffordable to pay off.

Here are some important points to consider about the debt consolidation process:

When you plan to hire the services of a debt consolidation company you are required to sign a written agreement with the consolidation company. But before you sign a contract with the consolidation company make sure that you read the terms and clauses thoroughly.

When you enroll in a debt consolidation program, your financial situation will be reviewed by the debt consolidators. They will negotiate with the creditors and design a repayment in accordance with your financial situation so that you can pay it off.

You make a single monthly payment to the company and it will disburse the amount among the creditors.

When you are under a debt consolidation program and working on paying off the debts, the threatening collection calls will be reduced or completely eliminated. A reputable and reliable debt consolidation company will manage the creditors although it does not have a legal right to stop collection calls.

Things that you should keep in mind while looking for a debt consolidation company:

  1. Before you hire the services of a debt consolidation company then you can short list some names of the company. You can check whether the companies are accredited by Better Business Bureau. A debt consolidation company is considered to be authentic if has National Foundation for Credit Counseling (NFCC) or Association of Independent Consumer Credit Counseling Agencies (AICCA) accreditation. Make sure the company you hire is associated with any one of the organizations.
  2. You can visit the company’s website and check the consumer feedback or testimonials of the past clients. If you find the consumers are happy with the services that the company provides then you can enroll in their program.
  3. Make sure that you review the fee structure and ensure that it follows the FTC guidelines of not charging upfront fee.
  4. You should check whether the debt consolidation company you have hired is licensed. You can verify whether the company is licensed from your state’s State Attorney General

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Filed under: Debt Consolidation and Refinancing, Featured Articles

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