How do debt consolidation companies make money?
Feb.04, 2009 in
Debt Consolidation
Eric F asked:
I wonder I always hear on the radio claims that company A reduced my debt from 40,000 to 10,000
How is that possible? And how do these companies make their money?
Get Paid At Home
I wonder I always hear on the radio claims that company A reduced my debt from 40,000 to 10,000
How is that possible? And how do these companies make their money?
Get Paid At Home
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February 15th, 2009 at 9:51 am
by pretty much bilking people further?
February 17th, 2009 at 7:17 am
They charge a fee
February 19th, 2009 at 7:31 am
Its fake…..they pay them to stop the debt and then they make you pay them back like twice as much.
February 21st, 2009 at 3:29 pm
They charge you a fee to handle your situation. That’s how they make their money. Sometimes they work their fees into your monthly payment and the total still comes out less than if you were trying to pay all the bills separately.
Nobody legally reduces their debt from $40K to $10K without filing bankruptcy. Beware of those exaggerated claims.
If you are really behind in payments and the creditors think you are a heartbeat from filing bankruptcy, they will negotiate to reduce the amount you owe by about 30-35%. That’s how the consolidator gets your debt reduced, but not by 75%!