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Question by stoqnski: How do debt relief agencies benefit?
I have a friend who is in debt and needs my help. He gets mail from different debt companies about how he can have all of the debt he has made into one simple monthly payment. I am wondering if this is really legit and how do those certain companies benefit from all of this. Thanks
Best answer:
Answer by waldenconnor
There are many forms of ‘debt relief agencies’ that you are asking about. Here are some data-points:
1. Debt consolidation loans: they charge points (fees) to give you the loan (typically 1% – 2% of the balance) plus interest and fees on the loan.
2. Credit counseling firms: they charge a monthly fee (frequently around $ 35-$ 40 per month) and some get kick-backs called fair-share payments from your creditors.
3. Debt Negotiation firms: they usually charge either a percent of what they save you (25% – 35% of savings) or a percent of your debt enrolled (usually around 15% of your debt) over 3 years.
You should also look at the total cost of getting out of debt, and the time it will take you to get debt free, and lastly the other considerations (credit rating, collections, etc.)
Good luck and pick your type of debt relief first and then pick a credible company.
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KBC blames 'unhelpful' debt relief speculation for high losses
By Laura Noonan BELGIAN banking giant KBC has blamed "unhelpful" commentary on debt forgiveness for a dramatic deterioration in its Irish business and has warned that the speculation could have "grave consequences" for the capital in Irish banks. …
Read more on Irish Independent
