Debt Consolidation FAQ:
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Debt Consolidation
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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 principal
balances instead of just paying
finance charges each month, reducing
your total payout term to 3 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.
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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,.
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: Yes. By using our program you
restructure your debt. Your credit
rating will 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 credit rating.
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.
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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, etc.
A secured loan has something
physical attached, that protects the
loan in case of default, such as a
House or a car.
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: 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 24 to
48 hours
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