Non Profit Debt Relief
Consumers that have taken the time to learn about their debt settlement or relief options have probably come across dozens of different agencies and services that feature ‘non-profit’ relief of some kind. Since the 50s when credit counseling became such a popular industry, there has always been a large domination by the non-profit companies. There are many different reasons that these companies are so popular, and each one offers a glimpse into what many credit counseling services are really like.
Non-profit settlement groups and for-profit settlements operate the same basic way. The non-profit group provides free debt counseling and prepares an income analysis. This analysis is the first step to becoming debt free. It will help you establish a budget and recognize areas where you are spending too much. Using this information the non-profit group negotiates with your creditors to work out a lower interest rate, or even a lower settlement amount. They then handle the settlement process. This is done through monthly payments that accumulate in an account. Once there is enough in the account to pay of one creditor, the money is withdrawn and the process is started over again with the next creditor. In these ways, profit and non-profit are the same.
How Do These Companies Work?
A credit control company combines all your bills into one huge debt. This means you no longer have to make three different monthly payments. Instead, you will have to make a single payment to the finance management firm. The company, in turn, will use this single monthly payment to pay off your multiple credit card dues.
First, you can go to your priest or your pastor and find out if there is someone in your church that has volunteered to give other members of the church financial help. If there is not someone usually the priest or pastor can help you considering that they run the churches finances.
This is probably the first option you should try because it will not cost you a cent. When people are helping you with your finances and there is nothing in it for them except seeing you in a better place you will get the best advice possible. They will help you get out of debt and counsel you so that you don’t go back into debt.
The person looking for debt solutions may not realize that some of these non-profit groups do not directly assist you in getting out of debt. They are simply information gathering services who then sell your information to profit oriented debt settlement groups. This is legal. They offer you free help in finding someone that can help you. These second agency groups sometimes charge fees to start a debt settlement program. Some of the non-profit organizations get more compensation for referring customers to a specific group, and the person assisting from the non-profit group may get bonuses for signing you up with them. These non-profit groups do not ask for money directly from the customer, they get their money from the debt relief group that you end up working with.
The most common violation of non-profit regulations among these types of debt relief companies is in the form of earnings. The companies are not supposed to be profit-driven, and yet many directors were earning nearly half a million dollars annually as a salary. There are for-profit companies with directors that don’t earn that much. The companies could charge steep fees, take a large portion of payments to creditors for their own services, and work with other companies to get kick-backs when they referred customers to a certain program or company for debt relief or credit assistance.
It is much to the advantage of consumers where the companies handle the loans by consolidating them through negotiations with the creditors, set a lower interest rate, and opt the payment through the refinancing by the mortgage, a secure source of cash. This goes back to the principle objective of the companies being the keepers of the conscience of the consumers, to safeguard their financial status and keep them from having to declare bankruptcy for not paying their debts. Much credit is given to them as they are non-profit and help their consumers who are in need of help to manage their finance by giving them the best option of getting the best cash source possible to pay for their debts.