| July 11, 2014

Debt Settlement Companies Continue to Damage Consumers’ Credit

The Center for Responsible Lending (CRL) reports using a debt settlement program can be hazardous to your financial health.

A debt settlement program is not a miracle worker when it comes to paying off your debt. In fact, these programs break your creditors golden rule. Consumers are asked to stop paying on their debt as they join the program. The reason? The debt settlement company believes it gives your creditors incentive to work with them in order to get their money back. However, this strategy can easily backfire on the consumer.

 

“The implications of defaulting on debt are not to be taken lightly,” said Leslie Parrish, co-author of the report and deputy research director at CRL. “When a consumer stops making payments on a debt, not only is she vulnerable to fees and an increased interest rate, the reporting of this delinquency to credit bureaus can impact her credit score for years; she also may be sued by her creditor.”

How to avoid a scam

The Credit Repair Organization Act, which is managed by The Federal Trade Commission demands that credit repair companies make clear certain aspects of their programs, including:

  • Your rights in a contract that features the services they’ll execute
  • A statement expressing your right to cancel within three days without paying a fee
  • The time it will take the program to work
  • The total amount of money it will cost you

If you come in contact with a company that does not make these points clear, don’t do business with them. There are other methods to reduce your debt and brighten your financial future.

Want to pay down your debt safely?

If a debt settlement program seems too risky, Gary Herman, President of Consolidated Credit has a few other options that might seem more agreeable to you.

  • Negotiate with your creditors: Contact your creditors and let them know you are serious about paying back your debt but you’d like to create another payment plan or lower your interest rates so you can consistently pay each month.
  • Unsecured debt consolidation loan: You’ll need a good score to qualify for this loan, but it’s one way to lower your interest rates and pay only one monthly payment.
  • Home equity loan: This is an option, but it’s not recommended. Since it’s a secured loan, you usually have to put up your home as collateral. If you default on the loan, your creditor can take your home.
  • Balance transfer: You can transfer your multiple balances to one low rate card. This way you save on interest and only have one payment per month. But again, you’ll need a good credit score. Also, you cannot continue to charge on the other zero balance credit cards or you’ll be worse off than before.
  • Debt management program: You won’t need good credit to qualify for a debt management program. You simply contact a reputable credit counseling agency and speak with a certified credit counselor for details.

A credit counselor is waiting to speak with you

If you don’t feel comfortable getting out of debt on your own, feel free to contact a certified credit counselor at Consolidated Credit. They will offer you a free debt evaluation and make recommendations on the best possible ways for you to get rid of your debt.

"We are really proud to recommend Consolidated Credit" Kathleen Cannon, President & CEO of United Way of Broward County. Consolidated Credit Counseling Services, Inc. is pleased to announce our partnership with the United Way as a United Way Chairman’s Circle Organization.

"We are really proud to recommend Consolidated Credit" Kathleen Cannon, President & CEO of United Way of Broward County. Consolidated Credit Counseling Services, Inc. is pleased to announce our partnership with the United Way as a United Way Chairman’s Circle Organization.

All Consolidated Credit counselors are certified personal financial counselors (CFC) We've helped 5 million people get out of debt! Call us today and see what we can do for you.

Consolidated Credit is honored to receive the 2012 Excellence in Financial Literacy Education (EIFLE) Nonprofit Organization of the Year award. The EIFLE awards acknowledge innovation, dedication and the commitment of organizations that support financial literacy education worldwide. See what Consolidated Credit can do for you.

Consolidated Credit is honored to receive the 2012 Excellence in Financial Literacy Education (EIFLE) Nonprofit Organization of the Year award. The EIFLE awards acknowledge innovation, dedication and the commitment of organizations that support financial literacy education worldwide. See what Consolidated Credit can do for you.

The National Industry Standards for Homeownership Education and Counseling are a set of guidelines for quality homeownership and counseling services. Industry professionals who adopt these standards can be trusted to provide consistent, high quality advice.
Click here to learn more.

Consolidated Credit Consulting Services, Inc. has been verified as the owner or operator of the Web site located at www.consolidatedcredit.org. Official records confirm Consolidated Credit Consulting Services, Inc. as a valid business. Call us today and see what we can do for you.

Consolidated Credit is a Certified ISO 9001 company, as verified through Bureau Veritas Certification.

Time tested and customer trusted. Consolidated Credit Counseling Services has been a BBB Accredited Business since 1998 and has a current A+ rating. Call us today and see what we can do for you.

View the Consolidatedcredit.org review status

Time tested and customer trusted. Consolidated Credit Counseling Services has been a BBB Accredited Business since 1998 and has a current A+ rating. Call us today and see what we can do for you.

View the Consolidatedcredit.org review status

Consolidated Credit is proud to be an ANAB accredited member. Accreditation by a recognized and respected body such as ANAB ensures the impartiality and competence of our company. To see what we can do for you, give us a call.

U.S. Department of Housing and Urban Development - HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. Consolidated Credit is proud to be a member of HUD and also part of the Hope Now Alliance.

You can save!

With this amount of debt, you'd pay around $xx.xx on a DMP.

FREE Debt Consultation
VE Interactive