Nonprofit Debt Consolidation

If you are looking to consolidate debt payments into one convenient monthly payment, you may want to work with a nonprofit debt consolidation company, like InCharge Debt Solutions.

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What Is Nonprofit Debt Consolidation?

Nonprofit debt consolidation is a way to reduce credit card debt and make payments on time without having to take out a loan. It is offered by nonprofit credit counseling agencies, like InCharge Debt Solutions, and comes in the form of programs called Debt Management and Credit Card Debt Forgiveness.

Neither of these programs used credit scores as a factor for enrolling, which helps make them among the best debt-relief options for consumers.

Enrollment starts with a free credit counseling session during which counselors review your finances and help create a monthly budget that makes sense in your situation. Counselors also offer you the best options for getting out of debt, based on your income and expenses.

What Types of Debt Can a Nonprofit Debt Consolidation Company Help with?

Nonprofit debt consolidation is for unsecured debt, which typically means credit cards. Credit card interest rates average around 16%, but can be as high as 36%. Nonprofit debt consolidation can reduce that interest rate to somewhere around 8%  and sometimes lower.

Other unsecured debt could be included in nonprofit debt consolidation, but it’s rare. Some other forms of unsecured debt that might be included are:

Debt Not Eligible for Consolidation

Secured debt – a mortgage, auto or boat loan – will not be included in a nonprofit debt consolidation. Income taxes and most student loans also are not eligible.

Why Work with a Nonprofit Debt Consolidation Company?

Nonprofit credit counseling agencies are required by law to act in clients’ best financial interest, and counseling is free. Agencies are accredited by the National Foundation for Credit Counseling (NFCC), and counselors are trained to educate consumers on how to manage money as well as suggest the best options for eliminating debt. Counselors won’t turn you away because of bad credit. What they will do, is give you perspective on your financial situation and help you create a strategy to reduce debt and improve your credit.

Nonprofit credit counseling agencies, like InCharge Debt Solutions, are 501(c)(3) nonprofits with a mission to help clients find debt relief. Solutions are based on your financial situation, not on selling products or programs for profit. The counselor’s support will range from things like budgeting to resources that can help things like reducing mortgage or rent payments, paying for utilities, and feeding your kids.

The counselor may also recommend a debt management plan; debt settlement, including nonprofit credit card forgiveness; or even filing for bankruptcy (and will refer you to a bankruptcy attorney).

Best Nonprofit Credit Consolidation Programs

The best nonprofit debt consolidation program doesn’t require borrowing money or have high fees that can make things worse.

Look for a solution that lowers interest rates and fits your budget.

A credit counselor will help identify the roots of your financial issues, develop a budget that helps you save and suggest debt consolidation that best fits your situation. You can speak with a certified credit counselor by applying online or calling the number on this page.

Credit consolidation features to look for are:

  • One fixed monthly payment
  • Lower interest rates
  • Someone who can talk to your creditors about securing lower rates
  • Someone who will evaluate and understand your financial situation, including counseling to deal with bankruptcy, housing issues, student loans, etc.
  • An online account where you can track your payments, balances, and interest all in one place
  • A way to pay off your debt faster than making minimum payments on your own
  • One that won’t cause further harm to your credit

Nonprofit Debt Relief vs. For-Profit Debt Relief Companies

If you’re overwhelmed with debt, an “easy solution” may be tempting. Keep an eye out for ones that may end up costing you more money in the long run. The debt consolidation and settlement industry is rife with for-profit companies that are looking to take advantage of your situation.

Your debt consolidation solution should not cost you money while someone else is making money off of your problem.

Nonprofit debt-relief companies, since they must be certified by the NFCC, must keep your best interests in mind.

Here’s how to tell the difference between for-profit debt consolidation and nonprofit debt consolidation:

NFCC affiliation. Members are 501(c)(3) nonprofit debt relief organizations.

No up-front fees. By law, companies can’t ask for payment in advance for debt settlement, consolidation or reduction services.

Check complaints. The Consumer Finance Protection Bureau has a state-by-state data base of debt relief complaints. The Better Business Bureau and Federal Trade Commission also keep lists of fraudulent companies and scams.

Check with your state attorney general and/or consumer protection bureau. Is the debt relief company licensed in your state? Are there legal actions or ongoing investigations? has a searchable list of state consumer complaint and attorneys general offices.

Free financial analysis. There is never a charge for financial and budget counseling from a nonprofit credit counseling agency.

Watch for red flags. Debt relief agencies are not allowed to make promises that they’ll do things like remove negative information from your credit report, or they guarantee all your debt will go away. If they urge you to get a new identity or advise you to apply for an Employer Identification Number to use instead of your Social Security number (which is illegal), walk away.

What About Nonprofit Debt Management Programs?

A nonprofit credit counselor, after assessing your situation, may recommend a nonprofit debt management program. The program consolidates monthly debt into one payment to the agency. It’s usually withdrawn automatically each month from your bank account.

Nonprofit debt management programs have:

  • One monthly payment
  • Lower credit card interest rates
  • A monthly fee ($30-$50)
  • A 3-5 year pay period

What About Nonprofit Debt Settlement?

Nonprofit debt settlement is a new program that also goes by the names Credit Card Debt Forgiveness and Less Than Full Balance. It is only offered a few nonprofit credit counseling agencies, including InCharge Debt Solutions.

A credit counselor at InCharge Debt Solutions can walk you through nonprofit debt consolidation, including the features of both nonprofit and for-profit debt settlement.

You may qualify for InCharge’s Credit Card Debt Forgiveness program,   on which you pay a pre-approved 50%-60% of your balance in fixed payments over 36 months. What’s left after that is forgiven.

To qualify, your creditors must be on the participating list of creditors;  the account must be charged off (you haven’t made a payment in more than 120 days); and you must have a balance of at least $1,000.

For-Profit Debt Settlement

For-profit debt settlement is similar to nonprofit debt settlement in that you pay less than what you owe, but that’s where the similarities end.

A for-profit debt settlement company contacts creditors to negotiate lower payoff amounts, but unlike nonprofit credit card forgiveness, creditors do not have prior agreements, so they may reject the settlement offer.  Negotiations usually take two to three years, meanwhile balances continue to grow because of late fees and interest charges. Collection agents will continue to call until a settlement is reached.

Debt settlement will have a negative impact on your credit score, since on-time payments are a major factor in credit scoring. The debt settlement plan will stay on your credit report for seven years.

Seek Nonprofit Credit Counseling

If you wonder if you qualify for nonprofit credit card debt forgiveness, or are considering for-profit debt settlement, or any kind of debt help, you should:

  • Call a nonprofit credit counseling organization like InCharge Debt Solutions for a free review of your finances.
  • Compare the pros and cons of debt management plans, nonprofit credit card debt forgiveness and debt settlement programs
  • Understand that when you stop paying a creditor, there are late fees and interest charges that will make the balance continue to grow
  • Understand the impact of debt settlement on your credit score and credit report
  • Consider do-it-yourself debt management.

About The Author

George Morris

In his 40-plus-year newspaper career, George Morris has written about just about everything -- Super Bowls, evangelists, World War II veterans and ordinary people with extraordinary tales. His work has received multiple honors from the Society of Professional Journalists, the Louisiana-Mississippi Associated Press and the Louisiana Press Association. He avoids debt when he can and pays it off quickly when he can't, and he's only too happy to suggest how you might do the same.


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