Debt consolidation is the process of combining all the debts accumulated by a person and consolidating them into a single payment. Interest rates are usually low, as are monthly payments. Some non-profit organizations have come forward to provide resources to consolidate debt for those who are overburdened and need financial assistance. They can consolidate various debts such as home mortgages, credit card debts, student loan debts, and auto loans into a single entity and pay them to creditors on a monthly basis.
A common misconception about non-profit debt consolidation companies is that state or federal governments set up these companies to help debtors easily repay their debts. However, any debt consolidation company can obtain the status of a non-profit organization by reporting as much as possible on the property tax return. In fact, most non-profit debt consolidation companies actually make a lot of profits and then pay most of their profits as wages to employees. So at the end of the year, they have no real profit to show that they can maintain their non-profit status. Undoubtedly, the debtor has a lot of cautious advice when dealing with non-profit debt merger companies. Many of them are addicted to fraud. They may retain a portion of the monthly consolidated payments, thereby tarnishing the debtor's image in the eyes of creditors. Some of them may transfer funds to other mortgages and delay payments. In a critical situation, this practice will certainly undermine the debtor's credit rating.
However, a true non-profit debt consolidation company does provide the necessary services to the debtor. They can negotiate with creditors to lower interest rates or promote simpler repayment plans. Most importantly, the debtor does not have to deal with creditors. As repayments become easier, it is much more convenient to repay debt. In extreme cases, bankruptcy can be avoided.
Orignal From: Non-profit organization debt consolidation
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