What Is Nonprofit Debt Consolidation?
Nonprofit debt consolidation is a way to erase credit card debt without having to take out a loan. It is managed by nonprofit credit counseling agencies and is one of the most attractive debt-relief options for consumers struggling to keep pace with credit card debt.
Nonprofit debt consolidation is really just another name for debt management programs. Nonprofit credit counseling agencies work with consumers to create an affordable monthly budget that includes enough discretionary income to get rid of credit card debt. Card companies offer to reduce interest rates, which helps lower monthly payments and knock out debt faster. Consumers make one consolidated payment each month to the nonprofit counseling agency, which then distributes the money in agreed upon amounts to each card company.
What Types of Debt Can a Nonprofit Debt Consolidation Company Help with?
Nonprofit debt consolidation companies deal exclusively with unsecured debt, mostly in the form of credit card debt through their debt management programs. Other unsecured debt could possibly be included, but because the primary benefit of the debt management program is reduced interest rates – and few businesses other than credit card companies are agreeable to that – there isn’t much gain for the consumer.
Some other forms of unsecured debt that might be included are:
- Department store or retail credit cards
- Medical bills
- Personal loans (unsecured)
- Payday loans
The list of debts that can’t be consolidated in a debt management program includes mortgages, car and boat loans, federal student loans and income taxes.
Why Work with a Nonprofit Debt Consolidation Company?
Nonprofit debt consolidation companies (also referred to as nonprofit credit counseling agencies) are dedicated to improving the financial lives of the people they serve through debt counseling services.
When you work with a nonprofit credit counseling agency, you will be treated to high quality credit counseling services and offered debt-relief solutions that are best suited to your situation, not driven by a sales commission or profit motive. Many for-profit credit card consolidation companies are criticized for offering products, services and advice that benefit the firm’s bottom line more than the client.
InCharge is a 501(c)(3) nonprofit credit counseling organization. Our mission is to help you find debt relief and our advice is based on the details of your personal situation. We may recommend our debt management plan, a program that consolidates your credit card payments into one, and request lower credit card interest rates on your behalf. Our credit counselors may determine that you qualify for a government housing program that can lower your monthly mortgage payments. Or, we may tell you that bankruptcy is your best option and refer you to a bankruptcy attorney. As a nonprofit credit counseling company, we help you regardless of your ability to pay for counseling services.