Many people seek debt consolidation to stop calls from creditors and look for guidance in getting out of debt. On face value it sounds philanthropic to know that there are companies and individuals willing to help consolidate your debts without financial gains. They promise life without creditors, made possible by combining all debts and donating a certain amount towards payment at lower interest. So far so good, but then you wonder: how do these non-profit debt consolidation companies survive?

In plain language, debt consolidation is a prearranged debt repayment plan floated by credit card and collection companies offering lower overall monthly payments based on low interest rates. The payments to creditors are made through donations collected.

This is reason enough for the majority of us to look at non-profit debt consolidation as a way out of debt. No fees are charged, except the one time joining fees, and whatever we donate goes towards paying debts.

It is at this point that selecting an upright debt consolidation company is imperative; otherwise, one can fall further into the abyss. Sometimes the non-profit debt consolidation is a front for credit card companies, and whatever donation or payment they ask goes into their coffers.

Some non-profits charge fees or work in collaboration with a profit-making agency. The antecedents of these profit-making enterprises can be verified, as most states have licensing requirements for profit-making debt consolidation. Non-profits have no such regulations, and the best form of defense is in not disclosing credit card or bank account numbers over the telephone or paying any fees or donations before going through the requirements. Debt consolidation should not make you end up more in debt.