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Don't Trust Everyone With Your Debt?

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Anonymous

14y ago
Updated: 9/16/2019

Debt consolidation services are often recommended by financial advisors as an alternative to bankruptcy. Reputable services work by negotiating reduced payments with creditors, and combining all payments due into one monthly payment that is then split and transferred to each creditor. A reliable debt consolidation service is often a non-profit organization, and in any case it will not take exorbitant fees up-front or promise elimination of debt or any other service that it cannot deliver legally and honestly. While some debt can be reduced because of a consolidation agreement, and further interest payments are often stopped, it is rare that debt consolidation agreements can wipe out the full amount of any balance due.

On the other hand, beware of any debt consolidation service that does promise elimination of debt. What these services actually do is either illegally attempt to set up debtors with a new tax ID, or they enter into agreements that are not recognized by or even presented to debtors, so that payments are just kept by the service. This does not reduce any debt.

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Wiki User

14y ago

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