Debt consolidation is one of the largest growing industries in the nation. The economy is difficult. People are losing their jobs and their homes. The cost of living is increasing. And this means that some people are finding themselves in the difficult position of not being able to pay their bills. Debt consolidation can often be the answer for many people. But you still need to be wary. As the debt consolidation industry has grown, so have the number of scams.
If you are in economic distress, with debt mounting and seemingly no way out, debt consolidation could be the right solution to your problems. Youll need to take a few steps to protect yourself from fraud.
Generally, the first thing you will do as you are beginning to investigate your options is get quotes from a few companies. It is very important to keep your personal information private at this point. A debt consolidator only needs a list of your creditors, your outstanding balances with these creditors, and the current interest rates you are being charged. At this stage, they do not need your social security number, or any account numbers or other private information. If they ask for this, move on to the next company on your list. By providing this information at this point, you are potentially setting yourself up for identity theft, an even worse nightmare than the credit problems you are experiencing. You will need to provide your private information when you are signing up with a company in order for them to be able to contact your creditors. But for the purposes of a quote, it is not necessary. Another thing to remember about quotes, they should be free. Move on to another company if the one you are talking to is looking to charge you for a quote.
Debt consolidation programs tend to get similar deals from creditors. If you are offered a lower monthly payment from one company over another, you are most likely being charged a higher interest rate. This will wind up costing more over the long term. You should also look to see what fees you are being charged. Is there a fee built into your monthly payment? Is there an upfront fee? Are there hidden fees which will be incurred long after youve signed the contract? Make yourself aware of the terms of the contract, including any cancellation fees. Look to see how fees are refunded to you in the event you wish to cancel your contract. You also want to be aware of the settlement guarantee, it should be specified, in writing, what percentage of the settlement is guaranteed.
Dont let yourself be pressured into signing up immediately. Often employees at debt consolidation services are taught to heighten your fears in order to close the sale. Make sure to take some time to really evaluate your options before deciding to go with one company over another. Do your homework first. You didnt get into this situation overnight; you can take a little time to logically determine your options.
After youve gotten quotes and reviewed contracts, it is imperative that you research the companies you are considering. Contact your states Attorney Generals Office. Check with the Federal Trade Commission. These agencies can provide you with useful information. Check the Better Business Bureau to see what types of complaints, and how many, have been filed against your list of companies. If the company is not reputable, you are very likely to be able to make that determination from these three sources, but it certainly doesnt hurt to take the additional step of doing an internet search. Enter the name of the company you are researching into the search engine of your choice. This will give you an idea of how the general public feels about each company.
Just remember to take a deep breath and step back from the situation. Evaluate things as if you were doing it for a friend of yours. If you jump at the first high pressure sales pitch you are offered, you may very well wind up in a worse situation than you started. Read through everything carefully before signing, and if things are too confusing, seek the advice of a financial expert, someone not affiliated with the debt consolidation industry. - 15790
If you are in economic distress, with debt mounting and seemingly no way out, debt consolidation could be the right solution to your problems. Youll need to take a few steps to protect yourself from fraud.
Generally, the first thing you will do as you are beginning to investigate your options is get quotes from a few companies. It is very important to keep your personal information private at this point. A debt consolidator only needs a list of your creditors, your outstanding balances with these creditors, and the current interest rates you are being charged. At this stage, they do not need your social security number, or any account numbers or other private information. If they ask for this, move on to the next company on your list. By providing this information at this point, you are potentially setting yourself up for identity theft, an even worse nightmare than the credit problems you are experiencing. You will need to provide your private information when you are signing up with a company in order for them to be able to contact your creditors. But for the purposes of a quote, it is not necessary. Another thing to remember about quotes, they should be free. Move on to another company if the one you are talking to is looking to charge you for a quote.
Debt consolidation programs tend to get similar deals from creditors. If you are offered a lower monthly payment from one company over another, you are most likely being charged a higher interest rate. This will wind up costing more over the long term. You should also look to see what fees you are being charged. Is there a fee built into your monthly payment? Is there an upfront fee? Are there hidden fees which will be incurred long after youve signed the contract? Make yourself aware of the terms of the contract, including any cancellation fees. Look to see how fees are refunded to you in the event you wish to cancel your contract. You also want to be aware of the settlement guarantee, it should be specified, in writing, what percentage of the settlement is guaranteed.
Dont let yourself be pressured into signing up immediately. Often employees at debt consolidation services are taught to heighten your fears in order to close the sale. Make sure to take some time to really evaluate your options before deciding to go with one company over another. Do your homework first. You didnt get into this situation overnight; you can take a little time to logically determine your options.
After youve gotten quotes and reviewed contracts, it is imperative that you research the companies you are considering. Contact your states Attorney Generals Office. Check with the Federal Trade Commission. These agencies can provide you with useful information. Check the Better Business Bureau to see what types of complaints, and how many, have been filed against your list of companies. If the company is not reputable, you are very likely to be able to make that determination from these three sources, but it certainly doesnt hurt to take the additional step of doing an internet search. Enter the name of the company you are researching into the search engine of your choice. This will give you an idea of how the general public feels about each company.
Just remember to take a deep breath and step back from the situation. Evaluate things as if you were doing it for a friend of yours. If you jump at the first high pressure sales pitch you are offered, you may very well wind up in a worse situation than you started. Read through everything carefully before signing, and if things are too confusing, seek the advice of a financial expert, someone not affiliated with the debt consolidation industry. - 15790
About the Author:
Harold Throope, who has been writing about personal financial matters for more than three decades, has written a easy to understand debt consolidation program. You can obtain this free guide, along with other valuable information about loan modification programs, on his site.