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How Do Non-Profit Debt Settlement Companies Make Money and Charge Fees? – Kevin

“Dear Steve,

I spoke to a BK attorney and he advised me that bankruptcy would not be a viable option for me. I have about $29,000 in credit card debt and do not want to enroll with the traditional debt settlement company where they charge huge up front fees.

How do non profit debt settlement companies make money and how do they charge fees?

Thanks for all your help!

Kevin”

Dear Kevin,

At first I thought you were asking about a nonprofit credit counseling company but on closer inspection I see you are asking about a non-profit debt settlement company. I’ve written about some companies that claim they are non-profit and offer debt settlement services, see this article as an example.

I have yet to find a single non-profit debt settlement company I think is legitimately non-profit or approved by the IRS as a bonafide non-profit agency. At this point in time if a debt settlement company is trying to sell you they are a nonprofit company, my advice is to run away.

In the case of the article I linked to about Financial Hope for America, an officer of that company said “…FH4A did apply with the IRS for the non profit status. We were unable to qualify for the status so we are a CA Not for Profit company.”

That doesn’t fly in my book. If the IRS won’t recognize you then there are issues.

So why did the bankruptcy lawyer tell you bankruptcy would not be a viable option for you?

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.




About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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