Some credit card debt consolidation companies are legitimate, but using such services can be risky. If you are thinking about debt consolidation, you might want to first consult a non-profit credit counselor. Many people get into debt because they can't afford to make monthly debt payments on top of paying for daily living expenses. If you're not sure of the best way to handle your debt, a credit counselor can also help you explore your options.
You can also reach out to your creditors to see if there are any ways you can lower your payments. Some creditors might be willing to accept lower minimum monthly payments or change your monthly due date because they would rather get paid less on a regular basis than not get paid at all.

Alternatives and Problems

You may see many advertisements for these debt consolidation options. Let me review some potential problems:

• Nonprofit Credit Counseling: While the term non-profit may seem to denote a charitable group, periodically someone will organize a non-profit but pay themselves or a family member. Check the company's background.
• Paying Back Your Debt Through a Debt Repayment Plan: This can make sense as long as the program is legitimate. Note that if you settle with a creditor and reduce the debt, they may hope you break the agreement so they can reinstate the original amount.

There are companies that advertise for debt consolidation services but act as debt settlement companies, and the terminology can be ambiguous. Debt settlement can present concerns:

• Not paying creditors will show up as a negative transaction on your credit report, making it harder for you to take out other credit.
• If you don't pay your debt, your creditors might hire debt collection agencies to collect your debt. This could lead to a lawsuit.
• Periodically, a company may not use all the funds to pay the debt.
• While you don't pay your debts under a debt settlement plan, interest and penalty fees will be added to the amount you owe. Even if your creditor (such as your credit card company) agrees to accept less than the full amount you owe, that amount might have grown anyway because of interest and penalty fees.

Call for a Free Consultation on Your Debt Consolidation Problem or Issue

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