subject: Are non-profit debt consolidators really non-profit? [print this page] Those who are debt ridden and cannot handle the payments anymore, may find a solution in debt consolidation. This concept of consolidating your debt into one monthly payment to only one party instead of several different creditors seems like an exceptionally good idea in times of distress. However, there will be fees associated with such services, but if you opt for non-profit debt consolidators, you may be able to save up on that amount to some extent.
How do non-profit debt consolidators work?
Many consolidators, who say they work not for profit, do not actually mean charity. They simply list their expenses as exemptions on taxes and use the non-profit tag to lure millions to use their service. You will find fees charged by most of these companies are no less than what other consolidation companies would charge. You may or may not find any significant differences between a profit and non-profit company.
Non-profit companies have a different way of working. These debt consolidators work with the help of government grants, creditors as well as donations. The trick lies in being able to choose the right non-profit debt consolidation firm.
How to choose the right non-profit debt consolidator?
Here is how you may do it:
Ask for proof: If a debt consolidator claims to be non-profit, ask them to show you proof. They must show you a non-profit (501(c)(3)) status before you begin working with them.
Religious affiliations: Some companies use religious affiliations just to lure you to use their services. While there are companies who actually, follow the religious ways but it may be difficult to tell the genuine from the false. In such a case you may have to rely more on the service and choose a company that offers the service you need.
Fees: Companies that are really not-for-profit may have a minimum set-up and monthly fee since not all non-profit consolidators are free. If you see that a company is being vague about its fee structure, or is forcing you to pay a fee, you may seek help from another company. Remember, the money you pay on the first month may go to the consolidator instead of your creditor.
Check with the Better Business Bureau (BBB): The BBB should be able to produce records on companies. You can find out if there have been complaints against any debt consolidators and choose a firm that has a satisfactory rating with the Better Business Bureau.
No matter whether you are working with a non-profit or for-profit firm, it will still take quite some years to wipe out your debt. If any firm promises it will get you out of debt quickly, do not believe them. Have a little patience and make the right choice after having done a good research on your part.
Are non-profit debt consolidators really non-profit?
