For many consumers enmeshed in a debt trap, debt management may seem to be the convenient solution to wipe out financial obligations over the long haul. However, setting aside budget to pay for the services of a debt management company can be taxing for those who are really having a difficult time making their monthly payments for their financial obligations. This makes a non profit debt management company attractive.
What Is In It For Non Profit Debt Management Firms
As the name suggests, the primary goal of non profit debt management organizations is not to earn profits and because of that they are not taxed by the government. Hence, they can afford to charge only minimal fees, or nothing at all. Many of them are really maintained by creditors and their main goal is to help debtors pay credit card companies. Sometimes it cannot be avoided that debt management companies of this nature tend to have a bias for the creditors at the expense of their clients.
Most non profit debt management companies do not charge set up fees, unlike most for-profit groups. However, not-for-profit outfits may exact a certain percentage from the monthly amount you send to them for payment to your creditors. This should be minimal. Some unscrupulous companies bury this condition in the fine print, so make sure to read it.
Some debt management companies set up under the not-for-profit status in compliance to laws in certain states. But the companies that you should steer clear from are those that use the non profit stature as a marketing gimmick to attract unsuspecting consumers.
The Services of Non Profit Debt Management
Just like for-profit debt counseling firms, nonprofit debt management companies offer services to help debt-stressed consumers cope with their situation, such as credit counseling, debt management plans, debt consolidation, etc. Some companies offer these services for free, while others may charge a small amount. If a company charges a hefty sum, it may not be a not-for-profit outfit. Beware of companies that offer free counseling services, usually over the phone, and and end up compelling you to sign up for a debt management plan. You may not be aware of it, but you may just have been sold one of their products even if it is not the best for your situation.
To protect yourself from scheming non profit debt management firms, study them warily and choose one which has been in the business for quite some time already so that you can see their track record. You can also ask a relative or friend who has been helped by a particular non profit debt solution provider for referral.