How do debt consolidation companies make money?
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?
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?
Tags: Debt Consolidation Companies, Money, Radio
December 31st, 2009 at 12:14 pm
by pretty much bilking people further?
January 3rd, 2010 at 3:44 am
They charge a fee
January 5th, 2010 at 8:29 pm
Its fake…..they pay them to stop the debt and then they make you pay them back like twice as much.
January 8th, 2010 at 12:49 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%!