Free Personal Debt Consolidation?

There are several personal debt consolidation scams and they are seen everywhere. From commercials on television to the Internet, how do you know if it is a scam or not? And, is it really “free” as advertised? There are several articles and websites discussing “free” personal debt consolidation, but you know there has to be catch - right?

Well, the truth is that there is a catch. Most companies do offer “free” services. They may send you free information and do free consultations, but when you get down to the meat of things everything involved with personal debt consolidation has a price.

Free information and consultations are everywhere. There are several debt consolidation companies that use these tactics to get people into their program and get you hooked with promises of low interest rates, low payments and no more worries. It sounds too good to be true, but for those who are at their wits end and desperate, they believe they have no other choice. Even non-profit credit counseling firms may charge a flat monthly fee.

Before deciding on anything and committing yourself and your debt to anything, you should get all the facts on the program and what they will do with your debt. There are several personal debt consolidation firms that will ruin your credit rating because they collect your monthly payment and don't pay your creditors until they give up. Then they take ten percent of your money for themselves and then negotiate to pay off your debt at a reduce rate. Most creditors are so relieved to finally get paid that they will negotiate. The company you were paying gets to keep the rest of the money that you gave them. These tactics can put you into situations that are worse than would you began the process. In addition, they may charge you hefty fees anytime you are late with a payment.

A fact in life is that everything comes with a price. The price you pay may be a destroyed credit rating and even more money in fees and interest. There are many companies that offer debt negotiation, but many of these companies use illegal tactics and you are the one that takes the fall for it. Never trust that anything is completely “free,” most people aren't helping individuals out of debt without getting something in return, otherwise they wouldn't be in business.

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