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American Debt Foundation
Debt Consolidation FAQ
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Debt Consolidation
FAQ
Do you find yourself buried by too much debt?
Do you think sending the minimum will take you anywhere?
Q:
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.
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.
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 Free Debt Quote 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
Debt Consolidation FAQ
American Debt Foundation
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