Debt Dilemma - choosing a debt
consolidation company
I don't want to get caught up with the wrong kind of debt consolidation
company. What should I look for before I choose one?
Before you look for a debt consolidation company, first determine if that's
the service you need. According to Mike Kidwell, vice president and co-founder
of the Rockville, Maryland-based comprehensive financial crisis center
Myvesta.org (www.myvesta.org), debt management programs are for people
who are behind on their bills. He says, "It's not a program that
you can join for added convenience or just to attain a lower monthly payment
or reduced interest rate."
That said, Kevin Thomas, president of American Debt Consolidation Inc.,
a nonprofit credit counseling agency in Fort Lauderdale, Florida, suggests
that you choose a nonprofit company because "creditors tend to offer
nonprofits better terms than for-profit corporations." Also, ensure
that the debt consolidator deals with the type of creditors you owe. Some
firms, for example, won't handle secured debt, such as mortgages or auto
loans. In this case, they can only negotiate with holders of, your unsecured
debt: the IRS, credit card firms, hospitals, or banks.
As with any consumer transaction, you should find out how many years the
company has been in business and check it out with your state's Better
Business Bureau (www.bbb.org). For a full list of questions to ask your
credit counseling agency, go online to (www.myvesta.org/resources/rs_
questions.htm)
--Monique R. Brown
Mail your consumer questions to Ask Your Advocate, BLACK ENTERPRISE, 130
Fifth Ave., New York, NY 10011, or send an e-mail to brownmr@blackenterprise.com.
COPYRIGHT 2001 Earl G. Graves Publishing Co., Inc.
COPYRIGHT 2001 Gale Group
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