The most *reliable* debt consolidation program would be available
through your bank or credit union. This typically entails getting a
consolidation loan for the amount of your total debts, after which the
bank or credit union will make out the checks to each of your
creditors. After the checks have been received, you request a copy of
your credit report, and follow the dispute procedures to have each of
your accounts marked as paid in full. Make timely payments on your
loan, and your credit will start to shape up in just a few months -
your old accounts are all marked paid in full, and you have an open
line being paid on time each month.
The drawback here is that sometimes the interest rates are high, and
if you fall behind in your payments, you can end up right where you
started. This sort of program is best if you have $5,000 of debt or
less.
There are other programs available that operate differently, and
typically cater to those with a higher debt load. These services
negotiate a payment with each of your individual creditors to lower
your monthly payment and occasionally your interest rate as well.
Under these programs, you send one check each month to the service,
which then divides your payment among your creditors based on
agreements they have made with each creditor. Most creditors who work
with such services will mark your accounts as "current" after you have
made a few payments to the service, even if they aren't receiving the
full minimum payment usually due. Others will continue to mark your
account delinquent as long as they are receiving the reduced payments.
This is up to the individual creditor, so be certain to ask your
credit counselor.
Many programs tout themselves as "Free" debt consolidation, but the
"free" actually only applies to getting a quote from the program.
Enrollment fees are disclosed with the quote, and seem to be dependent
upon the amount of debt you want to consolidate and the number of
creditors you have.
The most widely known of these services is the Consumer Credit
Counseling Services Organization of America. They have offices
scattered throughout the country, and offer online services as well,
to connect you with certified credit counselors. They've been in
business since the late '70s, and are highly regarded in the industry.
Many creditors recommend CCCS to debtors who ask for payment
arrangements when they have fallen behind.
[http://www.consumercreditcounseling.org]
Federal Debt Consolidation Services claims to be able to help reduce
payments and interest charges, and eliminate finance charges. They
offer both telephone and online applications.
[http://www.securecertificate.net/federal-debt-consolidation-services/google/index.html]
Free Debt Consolidation Services claims to be able to help cut your
monthly payments by 60%. They offer a free quote, but like other
services of this nature, bury any mention of fees in the FAQ.
[http://www.free-debt-consolidation-services.com/index.html]
ICR's Financial Freedom Service offers debt consolidation with a twist
- they say that the fee they charge may be applied to later payments
or refunded entirely at the conclusion of the repayment program.
[http://www.icrservices.net/web/mcarbajo/services/freedom.jsp]
Consumer Debt Service offers a free quote, and states upfront that
they charge a minimal fee for their services.
[http://www.consumerdebtservice.com/]
The only way to really know which agency is the best for your
situation is to get a quote from each one. Debt Consolidation Online
has a program checklist to help you decide
[http://debt-consolidation-online.com/agencychek.htm], as well as a
host of other debt consolidation resources, including links to the
Fair Debt Collection Practices Act (to help you understand your rights
as a debtor), how to read your credit report and where to get it and
more.
[http://debt-consolidation-online.com/index.htm]
Good luck! |
