What is the best consolidation company?

You're looking to consolidate your debts. You've had enough. Your credit cards, medical bills, personal loans, and mortgage are overwhelming. Most of your friends and family aren't dealing with this nonsense and you just want to be out from under this mess. Thankfully, you have many options when it comes to debt consolidation. However, there are a few things that you should consider when trying to find the best consolidation company for you.

It Should Be Backed By Lawyers

You can never underestimate the benefits of having real lawyers working for you. The best debt consolidation firms are either an extension of a law firm, or they are affiliated with one in some way. Lawyers add a layer of legitimacy to the company, and they provide real benefits. The fact of the matter is that contract lawyers, and lawyers that specialize in debt negotiation, settlement, and bankruptcy, are often also very knowledgeable when it comes to loan consolidation and how best to deal with creditors under the Fair Debt Collection Practices Act.


Non Profit Status

Non profit companies are often (but not always) cheaper to work with than for-profit companies. This seems pretty intuitive, but many non-profits have programs for those who can't afford paid services. Debt consolidation companies typically don't work for free, so it's important to specifically ask whether the company is non-profit. If it is, keep this in mind if you think you can't afford the services of a for- profit company.

Credit Counseling and Debtor Education

Some of the best debt consolidation companies are credit counseling organizations. Along with getting loan consolidation, you often have the opportunity to enroll in credit counseling and debtor education courses. These courses are low cost and sometimes free. Many credit counseling organizations are not for profit or have non-profit status. They can waive fees if you can't afford them, and they will help educate you about money matters.

You'll learn how to make a budget and better manage credit and debt. This way, you can avoid needing the services of a debt consolidation company in the future. By getting credit counseling, you also qualify for bankruptcy if you need it. That's obviously a terrible last resort, but sometimes it's necessary if the loan consolidation doesn't work out.

If you do work with a credit counseling organization, make sure it is a U.S. Trustee-approved company. An approved company is recognized by the U.S. Justice Department as having met certain minimum standards set forth by the government. It is also a requirement that you get a certificate from the credit counselor of an approved organization if you ever do need to file for bankruptcy.

Questions To Ask

Don't walk into any agreement blind. Not all debt consolidation companies are the same. You should interview your company before you do business with them.

A few questions to ask include:

  1. What services, specifically do you offer?
  2. How much do you charge?
  3. How long will this process take?
  4. How are your employees compensated?
  5. How does your company differ from other companies?
  6. Are they a non-profit organization?
  7. Do you have any option for fee waivers?
  8. Can I see an itemized list of fees and services you offer?

If the company can't give you a straight answer to any of these questions, move on to another company. If you don't feel comfortable with any of the answers the company does give, move on. There are many debt consolidation companies out there. Finding the best one is often just a matter of weeding out the undesirables.