If you are considering utilizing a debt consolidation company for settling or negotiating your debt, there are several important questions you should receive answers for prior to enrolling. We also suggest reading about the cons of debt consolidation.

What fees are involved for your services?
The FTC’s debt relief rules indicate that debt consolidation companies are not allowed to charge fees up-front after October 27, 2010. No fees can be charged until a debt has been settled. A good idea would be to request a disclosure of fees in writing.

How long has your company be involved in the debt consolidation industry and how much debt have you helped settle?
The age of a company should be secondary in your decision. Results are #1. If any company you are considering utilizing for debt consolidation can not or will not disclose how much debt they have settled then obviously do not even consider this company. Also, make sure that they are presenting overall results and not just a few of their best.

Are you able to put a stop to the constant calling being done by my creditors?
It is impossible to guarantee that all of your creditors are going to stop calling. If any debt consolidation company says they can stop 100% of call being made, they are lying.

Are you going to be making payments to my creditors on my behalf?
Debt consolidation companies never make payments to your creditors for you. You are responsible for making those payments.

Is it still possible for my creditors to sue me?
Yes, your creditors can still opt to sue you.

Will my enrollment in a debt consolidation company have a negative impact on my credit report and score?
Unfortunately, even though you are taking steps to help your financial situation, partaking in any type of debt relief program will have a negative effect on your credit report and score.

How long does it take for my first consolidation to be accomplished?
In general it should not take any longer than twelve months for your first debt to be settled. The debt consolidation company should be able to give a good idea as to how long it will take based on who your creditors are and how much debt is owed.

How much money will I save?
The amount of money you will save is calculated by adding the amount of debt that is going to be settled including all fees associated for utilizing the firm’s services. As mentioned above, it is a good idea to get a complete disclosure in writing of estimated savings.

How long is the entire process going to take and what will the final cost be?
No company is going to be able to give you an exact answer as to how long it is going to take to settle all of your debts. However, by law they are to provide you with an estimated amount of time and total amount expected to save.

Are there any tax penalties associated with debt consolidation?
Yes, the IRS calculates settled debt as taxable income. Learn more about these taxes associated with debt consolidation.

Who holds my funds while waiting for a consolidation?
Your money will be held in an insured escrow account with a third party. You are going to be in complete control of this account with the ability to pull your funds out and close the account at any time with zero penalties.

When I am going to hear from your company again?
You should be receiving updates regularly in regards to what the status is of all negotiations with all of your creditors.



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