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Frequently Asked Questions about Debt Consolidation

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• 1

  How do collections agencies work?

  When a creditor gives up on collecting a delinquent debt, the creditor sells the debt to a collections agency for a reduced price. For example, a creditor might sell a $5,000 debt to a collections agency for $2,000. The creditor then writes off the difference as a loss on their income taxes. At this point, the collections agency owns the debt and is responsible for getting the borrower to pay.

  One of the reasons why debt consolidation works is because collections agencies are usually willing to accept a lower payment amount than the original debt. This is sometimes referred to as a debt relief settlement and is typically negotiated by your debt consolidation program. Collections agencies will accept reduced debt payment amounts because they almost always still make a profit. For instance, continuing with the example above, if the collections agency accepted a payoff amount of $3,000 on the $5,000 debt, they would still make a profit of $1,000.

• 2

  Why should I choose debt consolidation over bankruptcy?

  When a creditor gives up on collecting a delinquent debt, the creditor sells the debt to a collections agency for a reduced price. For example, a creditor might sell a $5,000 debt to a collections agency for $2,000. The creditor then writes off the difference as a loss on their income taxes. At this point, the collections agency owns the debt and is responsible for getting the borrower to pay.

• 3

  What are my credit card debt options?

  When a creditor gives up on collecting a delinquent debt, the creditor sells the debt to a collections agency for a reduced price. For example, a creditor might sell a $5,000 debt to a collections agency for $2,000. The creditor then writes off the difference as a loss on their income taxes. At this point, the collections agency owns the debt and is responsible for getting the borrower to pay.

• 4

  What is unsecured vs. secured debt?

  When a creditor gives up on collecting a delinquent debt, the creditor sells the debt to a collections agency for a reduced price. For example, a creditor might sell a $5,000 debt to a collections agency for $2,000. The creditor then writes off the difference as a loss on their income taxes. At this point, the collections agency owns the debt and is responsible for getting the borrower to pay.

• 5

  How can I deal with creditor harassment?

  When a creditor gives up on collecting a delinquent debt, the creditor sells the debt to a collections agency for a reduced price. For example, a creditor might sell a $5,000 debt to a collections agency for $2,000. The creditor then writes off the difference as a loss on their income taxes. At this point, the collections agency owns the debt and is responsible for getting the borrower to pay.

• 6

  What is nonprofit debt help? Is DebtConsolidationTime.com nonprofit?

  When a creditor gives up on collecting a delinquent debt, the creditor sells the debt to a collections agency for a reduced price. For example, a creditor might sell a $5,000 debt to a collections agency for $2,000. The creditor then writes off the difference as a loss on their income taxes. At this point, the collections agency owns the debt and is responsible for getting the borrower to pay.