DO YOU NEED HELP WITH DEBT CONSOLIDATION

Debt problems are a growing concern in today?s day and age. However, debt isn’t the real problem. It is okay to have debt so long as you manage it properly, make all your payments on time, and don’t let it ruin your credit.

Where does debt come from?

The real problem is poor debt management. Whether you want to go to college, start a business, or buy a house chances are you are going to need more money than you are already in possession of to achieve these things. It is also safe to say that you will in all likelihood be making monthly payments to more than one lender.

In addition to your student loan, mortgage, or personal bank loan you might also have car loans, credit card payments and medical expenses. All of these loans will have varying interest rates, and some will be secured while others unsecured loans.

The large sum of your bills and varying factors can make it hard to figure out how much to pay on which ones when you can’t pay them all. The frustration and anxiety of not being able to pay your bills can lead to more financial problems and greater debt.

What can I do to eliminate my debt problems?

If you find it is becoming increasingly harder to pay your bills while trying to make ends meet and you are no longer preparing for your future there are several steps that you can take to get back on track.

• Credit Counseling
• Debt Settlement
• Personal Bankruptcy
• Debt Consolidation

Credit Counseling: Credit counseling can be a good way to lower payments, however you may end up paying more over a longer period of time. For example instead of defaulting on a car loan with twelve remaining months of payments a credit counselor will negotiate a debt management plan with the creditor where you can end up paying out double the amount over two years. Although the payment amounts will be affordable for you it is not worth paying double the values of the commodity.

Debt Settlement: Debt settlement is another viable option however if you don’t do all of your research and are not fully informed of the specific set of circumstances regarding the settlement, including your own negotiations with the creditor you can end up paying out more to the settlement company. Also, debt settlement can negatively affect your credit score.

Personal Bankruptcy: While filing for personal bankruptcy might seem like the easiest and is definitely the fastest rout to eliminating personal debt it has a lot of drawbacks. In some cases, Chapter 7, your personal assets can be liquidated. Your credit can be ruined for a long time making it next to impossible to get a home loan, buy a car or even get a credit card. In addition student loans cannot be forgiven through filing bankruptcy.

Which leads us to the next option.

Debt Consolidation: Consolidation is most likely the easiest and safest rout for you to go. With debt consolidation you take multiple debts with varying interest rates, both secure and unsecure loans, and consolidate them into one low monthly bill with a secured interest rate.

The Steps of Debt Consolidation

If you need help with debt consolidation your first step is to see a debt consular that will assess your financial situation. The counselor will have you attend a free counseling session to educate you on how to achieve better financial health.

Next you will sign an agreement with the counselor outlining the steps you will take and their fees.

After that you will start a payment plan based on new rates negotiated with creditors through your financial consular. The consular will work to lower your interest rates and remove late fees from debts. The new monthly payment will be an amount the counselor deems affordable for you to pay while maintaining financial health.

Next you will start making the payments and in further down the line you will re-evaluate your financial situation with your consular and update your payment plans if need be.

Source: http://www.moneyandinvesting.net/2013/01/21/do-you-need-help-with-debt-consolidation/

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