Posted on February 10, 2010 at 5:21 am Where to get real facts on debt consolidation? - Here, of course, @ destroydebt.com, but firstwhat his debt consolidation? Debt consolidation can be credit counseling or debt settlement program.Not to be confused with a debt consolidation loan.

Posted on February 10, 2010 at 5:23 am Where to get real facts on debt consolidation (credit counseling) - I agree, here! & speaking of what it is and how it works - Credit Counseling operates by sending credit card companies proposal letters to persuade them to agree on a payment plan that the consumer can afford. Once it gets approved, the consumer sends the credit counselors payment checks or electronic funds, which then gets transferred to credit card companies.  Following this, the credit card companies pay the credit counseling service companies a percentage of what the consumer has paid.  This "creditor-and-credit counseling services" relationship has received a lot of criticisms because it does not seem to be looking out for the benefit of the consumer but themselves instead. Another practice that concerns the federal and state regulators involves certain organizations that seek tax-exempt status to get around consumer protection laws.

Posted on February 10, 2010 at 5:31 am Speaking of real facts about debt consolidation - there are scam entities out there - so how can the consumerprotect themselves from those?

Posted on February 10, 2010 at 5:38 am A good question! & according to the BBB: -Before you select a credit counseling agency ask for information on the following:-Are the agency services confidential?-Will they devise a plan tailored to fit your needs?-Are the counselors certified?-Are budget and credit education opportunities offered?-Will your funds be protected? How?-Is the agency accredited?-Aside from BBB membership (www.bbb.org) the consumer should also check its affiliation with the National Foundation for Credit Counseling  http://www.nfcc.org.

Posted on February 10, 2010 at 5:41 am Does it cost? What are it's disadvantages?

Posted on February 10, 2010 at 5:43 am There is a nominal monthly fee that the members of the National Foundation for Consumer Credit charge but mostly credit counseling is free. The Debt Management Plan though costs $25/mo after a time set up fee.

Posted on February 10, 2010 at 5:47 am The disadvantages? 1) Many creditors don't like to work with cc agencies. So that means thatthe consumer could be paying that $25/mo fee with no positive result to show for it. 2) if the consumer miss a payment, the agency reserves the right to kick him/her out of the program.

Posted on February 10, 2010 at 5:48 am You say that credit counseling is free and the DMP is not - how would the consumer know if he/she should sign up for the DMP?

Posted on February 10, 2010 at 5:50 am Very well asked The Question! To answer, if the consumer finds himself in the ff, situation he /she needs to sign up for the DMP:

I always pay the rent/mortgage on time.

I pay minimum on my credit cards

use cash for small purchases Less than 15% of my income is being used to pay my credit cards

I almost never use my savings to pay my bills

Posted on February 10, 2010 at 5:54 am To elaborate on The Count's post - if the consumer's accounts are current but he/she is findingit harder and harder to keep up with the payments because of high interest rates - thenDebt Management Plan is a perfect solution (it negotiates the interest rates) - especiallyif the consumer has a steady stream of income for 3-5 years.