Are non-profit debt consolidation companies really non-profit?

The IRS or the Internal Revenue Service grants certain debt consolidation companies the status of non profit. This means that the company will negotiate your debts with the creditor but again this does not at all mean that these companies offer debt consolidation services for free. They only help you by negotiating with the credit companies if there are payments that you cannot afford to pay.

The responsibility of a debt consolidation non-profit company and a for-profit company is just the same – help you consolidate your debt. With a debt consolidation program you can get your monthly payments lowered. You debt consolidator will negotiate with your creditor to lower the interest rate that he charges and also to do away with or lessen any late fees fine that he might charge.

A great advantage of these debt management companies is that they ask you to make a single monthly payment and then that money gets disbursed among the creditors. If you want to find out whether a debt settlement company is non profit or not, you may check their ‘about us’ page. Such a company will try to negotiate with your creditor to reduce or do away with any late payment charges.

Consumers make donations to these debt settlement companies and these funds are used for the functioning of such companies.  However, it is absolutely up to you to decide whether you want to trust a particular company. You must be aware that a portion of the money that you pay to these companies goes to the company itself. Many individuals are not aware of this. However, if you have made a payment to the debt consolidation company, you must also cross check with your creditor if he has received payments.

Experts point out that very well do without the services of these debt consolidation companies. You can consolidate your own loan, after all it all about your negotiation skills. If you are a good negotiator you can convince your creditor for a good deal. But remember not paying is a bad option. There are no magic potions to eliminate your debt quickly. It will take time and remember nothing is available for free. So, hold on to your patience while you get your debt settled.