these companies negotiate with unsecured debt creditors to lower interest rates & lower the total amount due to the creditor. Then your monthly payment is also lowered. You would then pay that lowered amount to just one creditor at a time until they are paid off then you start paying to the next. The creditors that are waiting to be paid show up every month on your credit report as 30,60,90,etc days past due.
2007-01-25 06:00:39 · 6 answers · asked by mac 1 in Business & Finance ➔ Credit
First these companies do not pay to only 1 company at a time. They pay to every company you owe. Then when one is paid off they take that money and pay more on the others. So for the entire length of the program you will pay the same amount each month. In time everyone gets paid. Once you start on a program all of your creditors will start to report you as current, this may take 30-60 days for it to get all through the system. In the mean time if you get calls just let them know you are on a program and they will stop calling.
If the companies you are looking at only pay 1 at a time then MOVE ON, this is not how it should be done.
In most cases don't really lower the amount you actually owe. They may remove all of the extra fees and lower the intrest rate, but the base amount you owed is what you will end up paying. However, because it is a lower interest rate(Some even go down to %0) it gets paid down sooner.
Be sure you are going to one that is a Non-Profit company, these tend to work a bit better and the fees are lower than the For-Profit companies. For fees some will charge you a set fee per month, others will charge you a set dollar amount for each account you have on their program.
It takes time, but in the end if you can do it this is the way to go rather than declaring bankruptsy or just ignoring the debt.
2007-01-25 06:34:06 · answer #1 · answered by OC1999 7 · 0⤊ 0⤋
I am a mortgage consultant, do not do this. Credit Counseling stinks. They take forever to pay off charge you a lot of money in the long run. What they also do not tell you is that is shows up on your credit report that you are in a counseling service and mortgage lender look at that like it is a Chapter 13 bankruptcy. If you have a lot of debt that needs to be paid off and you have some equity in your home the best thing is to refinance them into your mortgage at that low rate and one payment every month. It looks a lot better on your credit, and is a lot cheaper in the long run.
2007-01-25 07:20:43 · answer #2 · answered by Anthony P 2 · 0⤊ 0⤋
They do help you pay your bills - but what they don't always tell you is even if the companies you owe money to make an agreement to a payment plan they still report to the credit agency's that you paid late every month
2007-01-25 06:07:58 · answer #3 · answered by Silly Mouse 3 · 0⤊ 0⤋
they are probably charging you a fee to do that. Try negotiating a payment plan with the creditors and use those fees to pay down your debt
2007-01-25 06:08:48 · answer #4 · answered by nj2pa2nc 7 · 0⤊ 0⤋
They all suck and make things twice as bad as they were before...
They get you out of immediate danger and make things worse than they were before just over a longer period of time!
2007-01-25 06:07:59 · answer #5 · answered by Anonymous · 0⤊ 0⤋
i recommend going to this page and filling out the form - act now and get rid of your debt today! dragging it on will only make it worse..
2007-01-25 07:34:45 · answer #6 · answered by big x 1 · 0⤊ 0⤋