Debt Consolidation Frequently Asked Questions
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Q: Why does the debt consolidation program work?
Q: Why is debt consolidation better than a loan?
Q: How will debt consolidation affect my credit?
Q: Is this like bankruptcy?
Q: Can my credit be repaired through debt consolidation?
Q: Can I quit the program?
Q: What are unsecured / secured debts?
Q: Is this a loan? Do the creditors get paid in full?
Q: Who needs our service?
Q: I have debts prior to marriage, Can I do this alone?
Q: Will creditors still call me?
Q: How is my payment determined?
Q: Are creditors willing to work with your program?
Q: What is the difference between non-profit and for profit
organizations?
Q: How do I get started on the program?
Q: Why does the debt consolidation program work?
A: Credit Cards are under a revolving credit payment plan. They are
designed to
keep you in debt, resulting in your paying an extraordinary amount
of interest while
trying to pay them off. Under these circumstances, most people will
end up paying
between 15 and 30 or more years. This means they will usually pay
out 5 to 6 times
what they originally borrowed.
By changing from a revolving to a fixed payment plan, along with a
lower interest rate,
most of the money is applied to your balances instead of the finance
charges each
month, reducing your total payout term to 4 to 6 years.
Q: Why is debt consolidation better than a loan?
A: Borrowing money to pay back borrowed money is economic suicide.
If you are able to qualify for an unsecured loan to pay off your
unsecured debt (most people do not) you are basically borrowing from
Peter to pay Paul. If you take out a secured loan such as a home
equity or second mortgage, you are attaching your current unsecured
debt to something of value such as your home. The average interest
rate in consolidation is 6 to 8 percent, which is usually less than
most loans today.
Q: How will debt consolidation affect my credit?
A: Our agency does not report to any Credit Bureaus.
If you are current with all your bills and have a good credit
rating, the creditors
policies stay virtually unchanged. As long as you make your monthly
payment on
time, the payments to your creditors are considered on time. On the
other
hand, if you are over extended and have a poor debt to income ratio,
paying off
your debts quickly will improve your credit worthiness.
If you are behind with your bills, the program can help bring them
current by
re-aging the account. With timely payments your payment record will
improve
as well as your debt to income ratio.
Q: Is this like bankruptcy?
A: No. This is the opposite of bankruptcy. Bankruptcy is when you
don't pay your
bills and you destroy your credit. In consolidation your debts are
being paid, and your
creditors are satisfied.
Q: Can my credit be repaired through debt consolidation?
A: By using our program you restructure your debt. Your credit
rating may improve
by showing a positive payment history. No one can erase your true
credit history,
but the longer you stay in the program, the closer you will be to
establishing a solid
financial footing.
Q: Can I quit the program?
A: Yes. However, if you do decide to quit the program, the interest
rates will go back
to what they were before you started.
Q: What are unsecured / secured debts?
A: An unsecured debt is an account or monies owed that has no
tangible property or
product attached to it. Examples: Credit Cards, Medical Bills,
Department Store
Cards, Signature or Installment Loans, Repossessions, etc.
A secured loan has something physical attached, that protects the
loan in case of default,
such as a mortgage or a car note.
Q: Is this a loan? - Do the creditors get paid in full?
A: No. This is not a personal loan to you. There is no cash in hand.
All your money is
disbursed directly to your creditors at a lower or zero interest
rate. The American Debt Foundation and its servicing agents are
hired by you to do three things.
1. To set up and establish a new payment plan with your creditors
that suspends your
original terms and will help you get out of debt by lowering or
eliminating your
current interest rates.
2. Handle all Creditor and Collection agency phone calls after you
have joined our
Debt Consolidation program.
3. Consolidate your bills into one monthly payment.
Q: Who needs our service?
A: Anyone who is experiencing problems keeping up with their bills
or seeking to rid
their life of financial burden.
Q: I have debts prior to marriage, Can I do this alone?
A: As long as you were the only signer on the debt and it's in your
name alone, you
can enroll in the program individually.
Q: Will creditors still call me?
A: If creditors call you after you enroll in the program, simply
direct them to our
service center. We will advise them that you are enrolled in our
consolidation
program, and there is no reason to contact you further.
Q: How is my payment determined?
A: Each creditor requires a minimum payment to qualify you for the
program.
All creditors have different requirements for acceptance. The
payment is
based on your particular mix of creditors and your balances.
Q: Are creditors willing to work with your program?
A: Absolutely. Your creditors want to be paid. They also understand
when a client
contacts a debt consolidation company, they may also be considering
bankruptcy.
Q: What is the difference between non-profit and for profit
organizations?
A: There are many financial firms offering a debt consolidation
program today.
Many of these companies are "for-profit", unregulated businesses. If
a company
is not being subsidized by the creditors, they must collect all
operating costs from
YOU the client. This results in much higher monthly service charges
that can
sometimes be very close to the interest they claim to be saving you.
Also many creditors will not work with for-profit companies or give
the same
concessions to their clients.
When you enroll with American Debt Foundation, your account is
handled by our
501C non-for-profit servicing agent establishing a strong
relationship with your
creditors and receiving the lowest payment and interest rates
without any negotiations.
Q: How do I get started on the program?
A: We offer an online creditor listing form for your convenience.
Just click on the
Free Quote link, fill out the requested information and submit it.
You will be
contacted by one of our Financial Consultants within 12 to 48 hours.
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Call Us Today!
(Toll Free)
1-866-411-DEBT
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Affiliated
501c3 Non-Profit Organization
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