Debt Consolidation Services– What You Need To Ask

Many members of the Studenomics Syndicate are currently killing their debt. Congrats! Keep it up. Killing debt can be very exciting. Watching your balance go down will feel sweeter than a cold drink on a hot summer day. Being able to start putting money into your emergency fund, towards your retirement, or even that two week winter vacation, will feel tremendous.

There’s one common topic that most debt-killers will face. That is debt consolidation. I’ve covered the topic of consolidating student loans extensively here. Today I wanted to address debt consolidation services and companies that offer these services.

Before you walk into an office to seek debt consolidation services, please read this. I want you guys to be armed with powerful questions so that nobody tries to take advantage of you.

What is really free?

Will they simply see you for free? Will they offer you a free initial consultation? There’s usually a limit on the free consultation that you’ll receive. There’s also a limit on the free debt reduction help that you’ll receive. The first meeting is where you must find out what exactly will be free if you decide to move forward with the company. You don’t want any surprises a few months down the road.

What will I be charged?

You need to know how much money you’ll be charged. I almost lost my mind when an acquaintance was charged a ludicrous amount for a debt consultation. Your goal at the initial meeting should be to find out exactly what you’ll be charged so that you can decide whether you are comfortable going forward with the debt consolidation help.

What will I be charged for?

You need to know what you’re paying for. This is likely the first time in your life that you’re reaching out for this kind of help with your finances. The company is helping you out by consolidating all of your debt for you because they are simplifying your finances and in most costs, offering you a lower overall interest rate. However, this doesn’t mean that they can charge you whatever they would like to for no reason. You need to find out what it is exactly that you’ll be paying for.

Are you guys licensed for debt consolidation?

You need to ensure that you’re not being scammed. Any company can claim that they offer debt consolidation services. You need to double check their qualifications to be sure that they are properly licensed. If the company isn’t properly licensed or they’re not willing to show you the proper paperwork, this should immediately raise a red flag with you. You don’t want to be dealing with a company that is showing signs of shady business right at the beginning.

What is the education of your staff?

You want to work with an experienced consumer credit counselor that is experience and well educated in the field. This person is dealing with thousands of dollars of debt that you’re eager to pay off. You want to find out what qualifies the employees of the company to help you with your financial situation. This is no different than finding out the qualifications of many other professionals (i.e. financial advisors, lawyers, doctors, etc.).

Hopefully the debt consolidation companies that you speak with will be able to provide honest answers that make you feel a little bit more comfortable about the process. For anyone that has been through this process, could you please tell me if I missed something?

1 thought on “Debt Consolidation Services– What You Need To Ask”

  1. One thing to add is whether the company charges fees up front. Since October 27, 2010, it’s now illegal for debt consolidation companies to charge their fees in advance of the services they provide. There’s certain exemptions to this – non-profits ironically can charge 100% of their fees up front, for example – but in general, it’s best to avoid any company who charges a lot in advance.

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