They (more or less) screw you.
They take all your debts and rejigger the various debts into a single lump payment. The payment may be lower, but that isn't actually helpful. The total duration of those debts may get extended out for years, basically increasing the total you have to pay.
Remember that there is no such thing as a free lunch.
More often than not, they do virtually nothing. There's no magic button or back door to creditors or collection agencies. They can do the same thing you can: talk to the creditors. Just the same, if you have assets they can consolidate, just as you might be able to do with your bank. They charge a great deal for these services, generally thousands of dollars with a very uncertain result. If you're going to find this out for yourself, at least make sure the company is non-profit, as their fees are generally much lower.
They have no power to stop collection calls or force creditors to reduce your debt. Only bankruptcy can do that. You should discuss your situation with an attorney.
Our firm offers a free consultation.
Michael J. Duffy
Duffy Law, LLC
Please note: The information provided here is for general informational purposes only and should not be construed as legal advice or legal opinion on specific facts or circumstances. You should consult an experienced attorney concerning your particular factual situation and any specific legal questions you may have. No attorney-client relationship is created merely through the exchange of information via this web site. Michael J. Duffy will not undertake representation of a client without the client first signing a written retainer and representation agreement.
Turn to a bankruptcy lawyer. If you have a moral objection to stiffing your creditors, opt for chapter 13 -- that will let you pay back an affordable portion of your debt over 3-5 years.