I need to know the functions of debt consolidation

This is how it worked for us... it may be different with different consolidation agencies. They called me and I spoke with a very nice rep. He was so nice. He didn't act like I was a loser, degenerate or an idiot. He seemed to understand my predicament.(before I requested to be called, I had sat down with my bills and listed all creditors, amounts, account numbers and addresses in a notebook. I also had the most recent bill from each creditor.) He took down my information and then we discussed what we could afford per month, amounts of monthly payments ect. I also had to fax some additonal information to him.

Then the proposal process begins. It was very difficult for us, they recommend that you pay your creditors and the consolidation co. the first month. We couldn't do that, so we got alot of calls. But the creditors did seem pretty understanding that we had entered into a consolidation program. Of course, they still asked for money - after all, that is their job! lol All of our creditors agreed to the amount our consolidation company submitted, except one - they wanted $1.50 more each month! Then they agreed. We now get NO calls from creditors and they are paid promptly. Our interest rates were also lowered from 24.9% - 29.9% to 5% - 15%. All over the limit fees were also waived.

Each month on the first (you get to choose the day)the predetermined amount is withdrawn directly from my checking account. Each creditor is then paid an agreed upon amount.

Will it hurt your credit? In the long run no, but it does show you are in a consolidation program for the duration of the program. Of course this is also a sign to your creditors, current and future, that you are serious about paying your bills.

Hi Ambs

Welcome to the board!

Thanks ttthayden for explaining this program by giving it a personal and individual touch. I appreciate it.

Ambs, the consolidation program functions exactly the way ttthayden said. In addition to all your bills getting combined into one loan amount, your debt amount is reduced eliminating the financial and late charges.

Once your payments are complete with the creditors, your scores will increase and you will be viewed more favorable by your lenders. Actually, the process of viewing you favorably begins right from the day your creditors start receiving payments through the consolidation program.

Don't worry, your credit report will shape up nicely being in the program. This does not put a negative impact on your file like the bankruptcy, foreclosure or bills in collections, charged off debts do.

Though it might stay in your file as long as you are in the program, but it will disappear after your payments are complete.

Take a free discussion and let the consultant explain it even better. :D

Regards
Roxette