Debt Elimination Group

A debt elimination group is designed to assist people whose borrowed monies are causing them great trouble and whose spending habits need to be brought under control. Debt elimination groups have been very successful in helping many people face brighter financial futures through their programs. One of the first things required of the borrower when signing on to work with a debt elimination group is to stop needless spending. In most cases the borrower is required to surrender credit cards since unsecured borrowing is the most destructive to a borrower's financial integrity. Next, the groups will work as negotiators on the borrower's behalf. They contact the creditors and work out a deal so that future payments, finance charges and the overall balances are significantly reduced. Since creditors are often more interested in getting at least a portion from their debtors (as opposed to nothing which would be the case through bankruptcy), most often they are willing to go along with the arrangements from these negotiations.

Among the best advantages to working with these organizations is the fact that they will handle all of the hassle for the debtor. The borrower does not need to talk to the creditors themself. Also, once the negotiators have settled the debt, the borrower will no longer get any of those irritating collection phone calls or letters from creditors. Also, some debt elimination groups offer money management and budgeting counseling as part of their services. This is certainly advantageous, especially if spending habits got the borrower into such a desperate financial situation in the first place. Learn how to budget wisely so that the family doesn't end up in the same situation again. "As a dog returneth to his vomit, so a fool returneth to his folly" (Proverbs 26:11).

There are some drawbacks to these recovery plans. Among the biggest drawbacks is the fact that the borrower's credit rating will probably suffer. Although the debt elimination group will not communicate with the credit bureaus to report the changes to the accounts, the credit card companies likely will. Although the accounts will show as having been "settled," future lenders (banks, mortgage companies, auto financing agencies, etc.) may be leery of taking a risk on future lending. Therefore, the borrower will likely pay higher interest rates on loans in the future. However, if already damaging the credit score through late and missed payments, working with a financial assistance service may be more helpful in the long run and certainly couldn't hurt to try.

Although the name of these lenders sounds like a promise to instant financial freedom, the process does not work overnight. Debt elimination groups work with clients over a course of time to relieve financial bondage and help them manage money more effectively. In fact, any debt elimination group that promises to make debt "go away" with little effort or consequence on the borrower's part is probably operating illegally, unethically, and without the borrower's best interests in mind. Research potential assistance organizations carefully before choosing one to help fix money troubles. Read the fine print, understand exactly what is being agreed to, and ask questions.

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