Non-Profit Debt Management
In today's economy where so many Americans just like you are falling behind on credit card payments and other unpaid bills, many are looking for help from non-profit debt management companies. When people ask us what the best approach is to getting out of debt, we generally recommend getting educated on some of most popular debt relief options available, paying close attention to the services offered, how long the process takes, and the fees involved.
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One option that's proven to be effective for many consumers is a debt management program (DMP), which is a plan typically offered by either "for-profit" or "non-profit" credit counseling companies. Under a debt management program, your unsecured and credit card debts will typically be consolidated into one monthly payment every month that will be made to the credit counseling agency you have chosen to work with.
Then, that credit counseling agency will distribute payments on your behalf to your various creditors based on a repayment plan. This repayment plan, proposed by your credit counseling agency and approved by your creditors, will hopefully lower your interest rates to a more manageable amount as well as allow you to make a single, lower, and more affordable and easier payment.
Debt management services differ from debt settlement programs, where credit card companies may agree to "forgive or settle" your debt for a reduced amount than what you actually owed. Another option is to get a debt consolidation loan, which combines all your multiple, high-interest debts into a single, lower interest loan. Regardless of which debt relief option you choose, realize that all these services are offered by non profit and for-profit companies; making the decision to choose one type over the other shouldn't be taken lightly, and requires time on your part researching their services and the potential money-saving benefits they can offer.
Reputable Credit Counseling Agencies
Take note that there are a number of reputable credit counseling agencies that help consumers with their finances - many of them charging low fees for debt management plans and other services. Most of these agencies are members of the National Foundation of Credit Counseling (NFCC), the oldest network of non-profit debt management companies committed to providing free and affordable services to debt-riddled consumers.
Many non-profit credit counseling agencies offer free budget counseling, money management skills, and debt management plan services, while those that may charge fees (or request contributions) typically keep the rates low and affordable. Some of these agencies may also offer non-profit debt consolidation or even non-profit debt settlement services, if indeed those are the services that you are considering.
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When deciding between a for-profit versus a non-profit credit counseling agency, don't make the mistake of assuming a non-profit company always has your best interests at heart. For-profit and non-profit debt relief companies offer similar services to debt-riddled consumers; the biggest difference is that non-profit debt management companies don't pay taxes, but for-profit companies do. Credit card companies fund most non profit credit counseling agencies using grants as a way for them to recover money from consumers who cannot make their payments.
Keep in mind that while many non-profit credit counseling agencies do provide low-cost money management and debt-relief services, not all of them do. There are some non-profits that may charge high fees, while other companies may use a "non-profit" status simply as a marketing ploy and as a way of convincing consumers that their high fees are legitimate.
Choosing a Debt Relief Company
The main thing to remember is, don't let your guard down when you are deciding to work with any company who promises to help you manage and pay down your debts. Investigate a non-profit debt management company as you would a for-profit agency to make sure it is truly providing good, honest financial advice at little or no cost to you.
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