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You have a lot of debt and you get a phone call about debt consolidation? Is is too good to be true?
If it was that easy, companies would offer to do it for free! Debt consolidation is not easy. It is very complicated. If you had the time, knowledge and skill to negotiate with the creditors yourself, you could do it yourself.
What you want to believe debt consolidation companies will do for you…
What they want you to believe is that the whole process will be a bed of roses and everything is going to be just great.
In 2002, I got divorced, taking all the debt. I knew if I left any debt for my ex he would have filed for bankruptcy, leaving me no choice. I called a company by the name of Take Charge America. At the time it was a non profit organization that gathered my info, negotiated down my pay offs, took money from me twice a month and in two and a half years, my debt was paid. They may have taken a little money, but the process was fast and complete. I was very satisfied.
Ten years later, I was getting my second divorce. I called the same company to attempt the same experience. The phone number connected me with a different debt consolidation company. They had me so turned around half way through the consultation phone call I was too anxious to give them any more personal information or permission to look into anything.
The new debt consolidation company wanted to know:
- All my creditors
- All my income
- All my monthly expenses
- My bank account information
- Any property I owned.
- My children’s names
- My parents names
Their explanation was that they would:
- Negotiate on my behalf with my creditors.
- Collect all income each month that wasn’t budgeted for my household bill.
- Hold the funds in a savings account until it equaled enough to pay off one debt at a time.
- Continue until all debts were paid off.
But… We will take our fees first… I’m not sure how much that will be… I’ll let you know after you’ve been approved!
My second ex-husband decided to go through with it anyway. Four months into his debt consolidation deal, they had negotiated with his creditors and started collecting his money… The first $2400 was apparently part of their fees.
If you decide to attempt debt consolidation, PLEASE discuss it with your account or lawyer first. The contracts you’ll provided by debt consolidation companies are not in your best interest.
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