| So you pay one "lump"
sum monthly, which is in turn portioned out to your creditors. This
monthly payment is in most cases lower than the sum of your individual
account obligations. As the creditors are paid monthly, you will receive
a receipt confirming the amounts paid to them.
Creditors recognize that people who enter a debt consolidation
program are trying to repay their obligations in good faith. Creditors
are more willing to extend favorable terms to such clients in the
hope that they (the creditor) will avoid the significant expense
of turning the account over to a collections firm or avoid an extended
drawn out process if the account holder goes through the process
of declaring bankruptcy. Repaying debt over a longer period though may increase the total amount to be repaid.
Your ability to obtain credit will be affected in the short term and might be affected in the medium to long term
|
