Non Profit Debt Solution
When choosing to work with a non profit debt solution professional, a consumer should understand why an organization is considered non profit. The name would seem to imply that an organization is working for the good of the individual client and not for monetary gain. While this description might paint an altruistic picture, this is not always the case. Many of these agencies are not always providing pro bono work for clients who can't afford the service. Granted, most will negotiate with a client's creditors for some kind of consolidation of debts agreement, but many will receive payment from the creditors themselves. If the creditor is paying the bills, it's easy to see whose concerns will take top priority. That is not to say that a consumer cannot find answers to financial dilemmas through the work of these counselors. But the potential client should research an organization and ask pointed questions before agreeing to work with any agency. Some providers of non profit debt solution alternatives will also offer valuable advice on budgeting, planning, strategies for building a savings account, and developing sensible spending habits. If the organization is reputable, and many are, the aim will be to not only help the client retire their overwhelming debts. A good agency will also help a client to build lifetime habits that will insure that the client will never return to any prior bad financial behavior.
In general, a non profit debt solution provider will be regulated by the IRS and will not pay corporate income taxes. This not for profit status means that the organization must limit the fees that are charged to clients. Many legitimate organizations cater to lower income individuals who need help with financial issues. This help may come in the form of education and guidance. For some clients, this kind of educational help on such issues as budgeting and sensible spending habits is enough. For other individuals, the help that is needed may require a more proactive approach. To prevent the last resort of bankruptcy, many of these counseling agencies will attempt to come up with a debt management settlement that will involve a client's creditors. Negotiations with creditors can gain such benefits for clients as lower interest rates on credit card debts and waived fees and penalties. Of course, a potential client will need to check the credentials of any agency before moving forward. Many of these organizations have been known to abuse their position as non profit organizations. The fact that the funding for many of these organizations comes from the creditors of clients can, at the very least, impact the objectivity of counselors.
Most non profit debt solution providers will offer clients the opportunity to consolidate debts. This can be done in a variety of ways. A traditional loan consolidation might be a possibility for anyone with a solid credit rating. However, many individuals who turn to a non profit debt solution service do so because of a spotty credit history. Approval for a brand new loan is generally not possible for these individuals. When this is the case, most credit repair services will negotiate with creditors and work out a deal on behalf of the debtor. The debtor will then make one monthly payment to the financial agency that will be used to pay off the various creditors. Making a single payment, while benefiting from lower interest rates and waved fees, can be a life saver for many consumers and can even help to prevent bankruptcy. In addition, counselors will often negotiate on behalf of clients to prevent repossession of a home or an automobile. Once an agreement has been reached, education on drafting a budget and the wise use of credit can be provided. According to the Bible, there are special blessings for anyone who reaches out to help the poor. "He that hath a bountiful eye shall be blessed; for he giveth of his bread to the poor." (Proverbs 22:9)
A professional non profit debt solution provider that is on the up and up will offer many benefits to clients. Because of their tax free status, there are specific regulations that apply. Such IRS oversight can help to insure that a client's best interests are served. In addition, a client can expect considerably lower fees or perhaps no fees at all. Many, if not all services will be offered to the client free of charge. Educational materials and valuable reference resources may be provided as well. As with agencies that work on a for profit basis, counselors will negotiate with creditors to consolidate a client's various payments on unsecured debt into one monthly payment. This can make meeting expenses each month much more manageable for clients and their families. Avoiding bankruptcy is always a plus for any consumer. The damage to an individual's personal credit rating in the event of a bankruptcy can follow them for years and years.
Unfortunately, an unscrupulous non profit debt solution provider can taint the reputation of the industry as a whole. There has been a growth in organizations that are nationally based rather than local. These organizations will often prey on desperate families through heavy advertising on television. An aggressive Internet presence may be utilized as well. Promises that seem too good to be true should raise a red flag for any potential client. The idea that any non profit debt solution provider can eliminate a client's debt or reduce it to the point of paying mere pennies for each dollar of indebtedness is ludicrous to say the least.
Debt Cancellation InsurancePurchasing debt cancellation insurance can provide an added sense of security for many consumers. No one knows the future. Life can be filled with unexpected struggles that can turn a family's financial situation upside down. There are many debt solutions available that can address these financial struggles in a positive way. When a policy holder finds themselves without a source of income due to unemployment or disability, these policies will kick in, making monthly payments and covering up to eighty percent of an individual's financial liability. With most of these policies, there are limits as to the amount of debt that will be paid off. But for many consumers, the ability to make ends meet even when a source of income has either permanently or temporarily dried up is worth the cost of the service. Should an insured individual pass away, payment on indebtedness will continue after death until the agreed upon cap has been reached. Of course, there are limitations. Some policies will not pay if the insured is unemployed for reasons other than health related disabilities. Still other debt cancellation providers have created options that are geared toward paying off large amounts of indebtedness for clients.
Similar to plans offered by credit card companies that are geared toward insuring charge account debts, debt cancellation insurance offers protection to debtors and creditors alike. Many credit unions offer members an opportunity to take advantage of group policies that provide benefits to all insured parties within the group. With debt cancellation insurance, an individual can purchase protection that is geared specifically for them. They can chose from a number of coverage options rather than accepting only the terms that are offered to an entire group. For example if an insured client wishes to opt for a higher level of coverage, this is an option that can be chosen. A number of situations can impede a debtor's ability to make good on the promise to pay off debts. Unexpected illnesses or disabilities, along with involuntary unemployment, are just a few scenarios that can make meeting monthly expenses difficult. The death of a family breadwinner is another unfortunate scenario. These policies are geared toward addressing the needs of clients who fall victim to such unfortunate circumstances. Some products in this category will even pay off the indebtedness in full rather than providing a percentage of the monthly payment. This feature can be especially valuable for debts that stretch out over a number of years.
The way that debt cancellation insurance works can actually be very easy to understand. Most of these plans consist of three basic parts; the agreement, the contractual liability policy, and the administrative services contract. The agreement consists of a description of how the debts in question will be handled. Will the debts be suspended, cancelled, paid off or modified in some way? When and how will these debts be addressed? The answers to these questions are all covered in the debt cancellation insurance agreement. A contractual liability policy is basically a contract that exists between the insurer and what ever organization, such as a bank or a credit union, is offering the coverage. An administrative services contract lays out the nature of any administrative services that are offered. Items such as fiscal management services, processing services, fee processing and other clerical concerns are outlined here. Other administrative fees could include expenses incurred when handling claims processing. Agents who specialize in this type of insurance product can set down with a potential client and fully explain all of these areas of the agreement. If a policy seems overly complicated or is loaded with a number of hidden fees, a potential client should most likely look elsewhere for coverage.
There are also products that are offered by many credit unions that are not technically considered debt cancellation insurance, yet these products function in much the same way. Such products are instead considered loans or parts of an original loan agreement. In this way, providers of these products are not subject to the same rules that govern insurance products. However, basic truth in lending regulations will apply here. In this way, these products are similar to credit insurance. Many credit card offers will include some kind of option for canceling debts. Of course, these options will come with a price and the wise cardholder will investigate any fees that are associated with these options before agreeing to participate. Paying attention to such details is always important before signing any kind of credit or lending agreement or agreeing to any kind of debt cancellation insurance. The Bible describes the importance of faith over works. "Knowing that a man is not justified by the works of the law, but by the faith of Jesus Christ, even we have believed in Jesus Christ, that we might be justified by the faith of Christ, and not by the works of the law: for by the works of the law shall no flesh be justified." (Galatians 2:16)
Truth in lending laws require that any fees that are associated with debt cancellation insurance be fully disclosed to the client. These fees are generally to be regarded as finance charges. Limitations in coverage must also be fully explained. Any disclosures of information of this nature must be made before the client signs any contracts. In addition, all such disclosures must be presented in writing and cannot be done verbally. These features may be voluntary, and the client may have the right to waive them. If they are voluntary, they cannot be represented as an involuntary feature of any credit agreement.