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Non Profit Consolidation - Everything you need to know about non-profit debt consolidation services - The benefits of consolidation of debt with a non-profit organization

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Non-profit consolidation of debt is basically a debt consolidation service offered by a non-profit organization. It does not necessarily mean that the services are free, but it does mean that the organization has a non-profit status with the Internal Revenue Service.

The benefits of consolidation of debt with a non-profit organization

In some cases, debt consolidation with a non-profit organization may be a viable alternative to declaring bankruptcy. There are several things that happen when you do decide to seek non-profit consolidation of debts. First, you end up with just one monthly payment because all of your debts are combined into one loan. This also allows consumers to get rid of all those late payment penalties they experienced if they were behind on their bills. The non-profit organization will also begin to negotiate any over-the-limit charges that appeared on your credit card accounts, if any are involved.

In addition, consumers who decide to go with non-profit consolidation of debt will no longer have to deal with collection calls anymore. The organization will work with the debtor to set up a payment plan. Some companies also offer free debt counseling.

Problems with non-profit debt consolidation

Consumers who are considering consolidating their debts with a non-profit organization should do some investigation before they sign any papers. State attorneys general and the Better Business Bureau in several states say consumers have complained that their debts have not been reduced at all. Some consumers say they’ve paid into these non-profit debt consolidation services for a year, and the company had made no payments on any of their debts. Others say the non-profit consolidation ruined their credit because the company made late payments.

Things to consider before opting for non-profit consolidation of debts

Experts on debt consolidation say consumers should consider several things before opting for consolidation. The first thing is whether consolidating the debts will actually save the consumer money. Part of this consideration is researching the company the consumer is considering using the services from. Check with the Better Business Bureau to see if anyone has lodged any complaints against the company. Chances are, if the company doesn’t have any complaints against it, then it is probably up to par. The next step is determining if the consolidation company will actually be able to save the consumer money through negotiation. If the interest rate offered by the company results in more money paid by the time the consolidation loan is over, then it’s probably not worth the time and effort to consolidate.

Another important consideration is whether the consumer can actually afford the payments. If consolidating the debts won’t result in payments the consumer can actually afford, then declaring bankruptcy is probably a better option.

Every financial situation is just a little bit different than the one before, so you should talk to a financial expert before you do anything if you just aren’t sure.

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