Debt Consolidation Companies: Are They The Saviors?
Published on: Fri, Sep 25, 2009
Classified as: Debt Consolidation
For those overburdened with debts, debt consolidation companies offer themselves to be the savior of such people. But, till how far are these companies true to what they offer? Are they really the saviors they suggest themselves to be? Lets find out.
Kristy Welsh, famed author of the book “ Good Credit Is Sexy
The companies may be putting up an ad of non profit services, but the fact is that they collect revenue from the customer’s money, without the client knowing about it. Its only at a later stage that some people see that their debts do not at all decrease. Even worse is credit ratings are destroyed due to the late payments of the companies. The money thus earned from the clients are spent into the salaries of executives which could range up to $300,000 a year.
Now, there is a simple solution to this problem, and that is customers should negotiate, they should work hard to get a better deal rather than to think of the company as a magic pill. As Kristy says, “As in weight loss, people want a magic pill to take instead of having to diet and exercise. Similarly, people just want to hear that they can hire a company to miraculously reduce their debt and make it go away.”
So here is a few tips that is bound to help customers know how to deal with the company them selves and avoid any problems future on.
1). Try to pay less than for what you owe, to your credit card company. The percentages could be lowered from 50 – 75% . Once this is done, you will have a chance to rebuild your credit, even while settling for the debts.
2). Negotiate the company to convert your credit report to a positive listing and you will pay creditors, only if your conditions to this are agreed.
3). If conditions are not agreed to, then the best way is to avoid paying your debts at all. Though this may cause some severe impacts, it could be better off than bankruptcy. If you wait long enough, within 7 years negative accounts will be dropped off.
For a better understanding of all this, it is recommended you pick Kristy Welsh’s book and give it a good read.
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