Question : What are the advantages and disadvantages of having one of those debt consolidation companies help you?
If anyone has any experiences with good or bad in dealing with a debt consolidation company let me know. Would it be a good idea to have one help me if I have about 4,000 dollars in debt?
- asked by hotsing1
All Answers:
Answer #1
They usually wont do much for you unless you have$10,000 in debt.They essentially call up all yourcreditors and tell them that you will probably gointo bankrupcy and not pay them unless you canwork something out. They then negotiate areduction in your interest rate, a reduction inyour debt, and a new lower payment. That is thegood part.The bad part is that the lender is thentaking a loss after lending you money. Like thefriend that always mooches and doen't pay theirshare, it makes other lenders less likely to lendto you. This will lower your credit score for awhile and the credit negotiation will be noted onyour credit report.Your $4,000 may beuncomfortable, but it is definately manageable. Do what you can to work this out without goingthrough the counseling. Try getting a second cardand transferring the balance - thry will oftengive you a low transfer rate for a few months. This will give you a chance to get ahead in yourpayments (keep paying as much as you can eventhough the minimum payment is less). Remember, agood reputation is invaluable. You need toprotect it and build it up. Just because you canborrow money doesn't mean you should.
- answered by sdmike
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measure and fulfill your financial needs
