Being in debt is a situation that can put anyone in a difficult spot. When fighting debts, non-profit debt relief options serve as the light at the end of the tunnel. Here is all that you need to know about some free debt relief options available today.
Credit counseling and debt management
There are a number of credit counseling agencies that operate on a not-for-profit mode and offer free debt relief programs. These agencies are viable options for someone seeking non-profit debt relief programs. Apart from the Internet, you can reach out to such agencies through parsons at churches and community centers in your area. Such organizations are either funded by the government or are supported by charitable organizations.
These non-profit credit counseling agencies employ financial specialists with professional competence in finance management, budgeting and financial planning. The counselors zero in on the root of your financial scenario and develop a strategically planned budget that focuses on paying the maximum to your debts.
The credit counseling agencies also negotiate with your creditors on easing out repayment options by lowering the interest rates, or waiving off certain fees and charges that apply to your case. Negotiations may also take place on the tenure of the payback period. Once the negotiations are through, a payment plan is chalked out with the negotiated terms and conditions. Each creditor has an amount designated to him in the payment plan, better known as debt management plan (DMP).
You pay this amount to the credit counseling agency, which forwards the same to your creditors as specified in the debt management plan. Remember that DMPs are applicable to unsecured debts only.
Just like non-profit credit counseling agencies, there exist organizations that offer debt consolidation services on a not-for-profit basis. Once again, the Internet, local authorities, community centers and churches are a good source to help locate such organizations.
As a non-profit debt relief program, debt consolidation merges all of your debts into one and makes use of a consolidated loan taken up specifically to pay out theses debts. This rolls out the advantage of doing away with the nuance of handling multiple loans and their interests. As consolidation loans are significantly cheaper, you stand to save a lot on what you would have paid for unconsolidated debts. However, these loans need collateral against them and hence convert unsecured debts into secured ones.
Free credit card debt relief services are offered by a number of credit card companies that offer free of cost balance transfers. These companies allow transfer of balances from multiple credit cards onto a single card. A credit counseling agency may guide you to such companies, information about which is anyways available through the Internet. Such transfers not only consolidate all your balances onto a single credit card, but also help to save on the interest that would have gone towards each of the unconsolidated balance.
There are a number of companies that offer free debt settlement services. In the process, these companies set up negotiations with creditors and mutually settle for an amount significantly lower than original debt. The debts are deemed to be settled at amounts much lower than what was originally due.
Debt settlement should be pursued when the debts are relatively high and it is virtually impossible for a debtor to pay them. Debt settlement comes with a slight disadvantage in the sense that they have a bad effect on credit scores.
Although there are a number of organizations offering reliable non-profit debt relief services, scams and counterfeits can’t be ruled out. Watch out for claims too good to be true. Verify the credentials of the company through designated agencies. Also be sure to read the terms and conditions carefully before opting for services of any agency.
Non-profit debt relief surely absolves debt blues and puts you on the road to recovery. However, being judicious in choosing the right program and an honest company is what is required.