WHY DO BANKS OWN CREDIT COUNSELING SERVICES COMPANIES?

WHY DO BANKS OWN CREDIT COUNSELING SERVICES COMPANIES?

If you’re considering filing for bankruptcy, you may wonder why banks seem to own every credit counseling service company out there – companies that will charge you fees to help reduce your debt. It turns out that this is more than just a coincidence, and in fact, there are some very strategic reasons behind banks owning these companies. Find out more by reading this article on why do banks own credit counseling services companies?

HOW DEBT CONSOLIDATION WORKS

A lot of people think that their credit counseling service is working for them when really, it’s working for the bank. That’s because most credit counseling services are owned by banks. The way debt consolidation works is that you make one payment to the credit counseling service, which then pays your creditors on your behalf. This can be a good way to get out of debt, but you need to be careful.

A free credit report may also be beneficial so you can have an idea of what other options might be available for you in the future. Furthermore, if you’re married, then your spouse should get involved in the process as well since it’s not just about you but about the two of you. Lastly, don’t stop saving money now or spend more than necessary because that could lead to more financial woes down the road.

AVOID THIS COMMON MISTAKE

Many people are surprised to learn that banks own credit counseling services companies. The reason for this is that banks profit from the highinterest rates that these companies charge. Credit counseling services companies typically charge very high-interest rates, which can make it difficult for consumers to get out of debt. If you’re considering using a credit counseling service, be sure to do your research and choose a reputable company.

You should never have to pay an upfront fee or sign any contract without reading the fine print first. You should also be aware that if you use a credit counseling service, they may negotiate with your creditors on your behalf to lower what you owe them or even stop certain types of collection activity against you.

HOW DOES DEBT SETTLEMENT WORK?

Debt settlement is a process where you negotiate with your creditors to pay off your debt for less than what you originally owed. This can be a good option if you’re unable to make your minimum payments or you’re facing foreclosure. However, it’s important to know that debt settlement will hurt your credit score. It will typically lower your score by up to 200 points and may take up to seven years before it has any positive effects on your credit report.

THE TOP 3 THINGS DEBT SETTLEMENT CAN SOLVE

1. If you have unmanageable debt, are struggling to make minimum payments, and fear you may default on your obligations, debt settlement can help.

2. If you are being harassed by creditors or collection agencies, debt settlement can put an end to the harassment.

3. If your credit score has been damaged by late payments, missed payments, or charge-offs, debt settlement can help improve your credit score.

IT CHEAPER TO FILE BANKRUPTCY?

Filing for bankruptcy is a process that allows individuals or businesses to eliminate some or all of their debts. The decision to file for bankruptcy should not be made lightly, as it will have a significant impact on your credit score and ability to obtain future loans. However, in some cases, it may be the best option available. If you’re considering bankruptcy, you may be wondering if it’s cheaper to file for bankruptcy than to continue making payments on your debts. In many cases, it can be. That said, several factors determine how much each scenario costs.

To determine which is better for you, consider these factors:

1) Are there fees associated with filing for bankruptcy?

2) How long will it take before you begin seeing positive effects on your credit report from filing for bankruptcy?

3) Will filing for bankruptcy put a dent in your assets and income now, but improve them later down the line when you qualify for new loans?

4) How much debt do you have relative to income?

5) What is the interest rate on your debts? 6) What sort of legal consequences might be involved in filing for bankruptcy versus continuing to make payments on your debt?

7) How much would it cost you (in both time and money) to make higher monthly payments towards your debt while looking into other options like restructuring, borrowing money from family members, etc.?

WHICH IS BETTER FOR YOUR SITUATION, DEBT SETTLEMENT OR BANKRUPTCY?

It’s no secret that many people are struggling with debt. The question is, what can you do about it? You may have heard of debt settlement and bankruptcy, but which one is better for your situation?

Bankruptcy allows the debtor to keep their property, while debt settlement results in a lump sum payment to creditors. Bankruptcy tends to be more expensive than a debt settlement plan because the debtor has to file a petition in court, find an attorney, pay the fees up front, and then wait six months or more before they get any relief from their creditors. Debt settlement usually involves the debtor making payments to a third party over time, who negotiates a lump sum payment with creditors on behalf of the debtor. Debt settlements often result in lower monthly payments for years compared to bankruptcy.