Loading ...It may have felt good when all of those credit card approvals started appearing your mailbox and when the local department stores granted you one of their credit cards. It all seemed to come together right after you bought that new house and a second car and everything in your life seemed to be going on the right track. Perhaps it was a layoff due to a downturn in your industry or an illness that took a big chunk out of your income, but suddenly you find yourself unable to meet all the obligations that until recently were so easy to pay.
Before resting you chin on your chest and heading to a bankruptcy attorney you might want to the consider consumer credit card consolidation. While it is true that individuals can contact their creditors on their own and attempt to negotiate lower monthly payments, many of the companies that offer their services for consumer credit consolidation experience much better results in consolidating all of the monthly payments into one manageable bill every month.
Typically, companies will accept all of your bills for unsecured debt and work with your creditors to lower the monthly obligations. Since you are probably one-step away from bankruptcy, most creditors will be interested in working with them, with the companies being able to offer more assurances that they will be paid than they receive from a debtor that is already showing signs of having financial problems. These consumer credit consolidation services do not provide loans for people to help them consolidate their debts rather they receive your monthly payment and send out payments to all of your creditors.
State laws may vary slightly on the practices used by consumer credit consolidation services, but federal laws govern the amount of income one creditor can garnish every month. Most creditors are willing to work with debtors that are working on consumer credit consolidation to first insure they are paid what they are owed, as well as helping the debtor get out of a jam. By helping them over some rough spots, the debtor may come back once their financial position improves and be a continuing customer.
Do not be misled by claims of companies being able to wipe out debt as the only way they can legally keep the wolves from your door is by making the payments. Once deals have been negotiated with creditors you will have to make sure your payments to the company are tendered on time and, beyond that, the payments are actually being made to your creditors.
There have been companies that offered consumer credit consolidation services only to accept debtor’s payments and then disappear with the money. Make sure the service company has a good reputation by contacting your local better business bureau and even your state’s attorney general. If you have contracted for consumer credit consolidation services and then ignore your creditors, if the payments are not made, the phone calls as well as the potential for legal recourse to collect the debt will continue.
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