Ultimate Money Lessons
IS DEBT CONSOLIDATION RIGHT FOR YOU?
If you are hopelessly behind in your credit card payments and you see no way out, it can be tempting to sign up with a debt consolidation firm that promises to make everything better. But you need to stand in the truth: signing up with a debt consolidation firm will likely make your financial life even worse.
The Difference Between Debt Consolidation Companies and Debt Management Programs:
DEBT MANAGEMENT PROGRAM - AN ORGANIZATION LIKE CCCS (CONSUMER CREDIT COUNSELING SERVICE):
- Suze - APPROVED
- A non-profit corporation that looks at your financial situation, provides classes to educate you and puts you on a debt management program where you pay them and they pay your creditors.
- The fee is usually $5-$15/month.
- It will not hurt your FICO score.
DEBT CONSOLIDATION COMPANY:
- Suze - DENIED
- Tells you to stop paying your credit cards.
- Affects your FICO score.
- Creditor usually agrees to settle for a fraction of what you owe.
- You will be asked to pay up front, as well as monthly fees and likely even a percentage of the discount they negotiated.
Video: Watch Suze answers Cosby’s debt consolidation question.
Money Lesson: Click here to Find out what money has taught Suze about her own personal power.
Published on February 06, 2012