Is debt consolidation a reasonable solution?
I have a lot of debt spread out among credit cards, private loans, hospital bill, etc. Is it possible for me to consolidate all of that into one payment each month? I have trouble keeping on top of all of my bills because none of them fall on the same day. Does this seem like a good option? Also, who/what company is reliable for debt consolidation?
“Debt consolidation” can refer to two completely different things: The first is getting a loan to pay off all debts to consolidate your bills into one lower payment. If you do this, go through a local bank that you know and trust. Stay away from online firms. You need to have good credit to get this type of loan. Many people who get debt consolidation loans quickly find themselves in twice as much debt as when they started….because it’s simply too tempting to start using all that newly available credit that was paid by the consolidation loan. If you get this type of loan, contact your credit card companies after the debt has been paid off by the loan and request voluntary credit limit reductions to under $500 to avoid the temptation of using all that newly available credit again.
Debt consolidation also refers to a risky practice of debt settlement: deliberately defaulting on your credit cards to try to force your creditors to settle for less.
When you sign up with a debt consolidation firm, the program involves deliberately ceasing payments to all your creditors to force your accounts into default to attempt settlements for less. You pay a monthly fee to a debt consolidator….this entire fee goes towards building a settlement account and to the consolidator’s fees to “settle” your accounts in the future. Your credit card companies will deliberately not be paid so that all the accounts will default/charge-off so that they can attempt settlements at around 50%. If you are current on your accounts, this process will ruin your credit rating. You can never predict how your creditors will respond to the deliberate defaulting of your accounts…they might settle at 50%…or they might serve you a summons, take you to court…and if they win, you could be looking at wage garnishment.
January 22nd, 2010 at 6:58 pm
Sometimes.
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January 22nd, 2010 at 7:29 pm
Run, and run away fast from these companies.
They will charge you thousands for stuff you can easily do yourself.
You can also call your credit card companies and change the closing date on your account so they don’t fall on the same day.
I change my closing date on my all my credit cards so they fall on the same day!
That way I know when I’m getting a bill in the mail.
Please do not do any business with debt negotiation, or settlement companies.
They will rob you blind.
If you are in serious trouble you can contact
NFCC.org
It’s a non-profit government agency that will help you at no cost to you.
But you have to be in financial hardship.
I would like to suggest a book on credit / debt repair from the library or bookstore.
They will teach you step by step how to take care of your finances.
Suze Ormond has a great one - so does Dave Ramsey.
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January 22nd, 2010 at 7:36 pm
don’t trust any of these people, listen to Judy
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January 22nd, 2010 at 8:07 pm
“Debt consolidation” can refer to two completely different things: The first is getting a loan to pay off all debts to consolidate your bills into one lower payment. If you do this, go through a local bank that you know and trust. Stay away from online firms. You need to have good credit to get this type of loan. Many people who get debt consolidation loans quickly find themselves in twice as much debt as when they started….because it’s simply too tempting to start using all that newly available credit that was paid by the consolidation loan. If you get this type of loan, contact your credit card companies after the debt has been paid off by the loan and request voluntary credit limit reductions to under $500 to avoid the temptation of using all that newly available credit again.
Debt consolidation also refers to a risky practice of debt settlement: deliberately defaulting on your credit cards to try to force your creditors to settle for less.
When you sign up with a debt consolidation firm, the program involves deliberately ceasing payments to all your creditors to force your accounts into default to attempt settlements for less. You pay a monthly fee to a debt consolidator….this entire fee goes towards building a settlement account and to the consolidator’s fees to “settle” your accounts in the future. Your credit card companies will deliberately not be paid so that all the accounts will default/charge-off so that they can attempt settlements at around 50%. If you are current on your accounts, this process will ruin your credit rating. You can never predict how your creditors will respond to the deliberate defaulting of your accounts…they might settle at 50%…or they might serve you a summons, take you to court…and if they win, you could be looking at wage garnishment.
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January 22nd, 2010 at 8:17 pm
Nothing comes for free my friend! Stay on the top of you spending and spend some time on your pc, it’s better than losing control and losing extra money.
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January 22nd, 2010 at 8:27 pm
check the below link. it may help you.
http://interestingarticles4all.blogspot.com/2010/01/small-business-debt-consolidation.html
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http://interestingarticles4all.blogspot.com
January 22nd, 2010 at 8:44 pm
debt cosolidation is noooo good. they only reduce intereste rates plus they stamp your report with a debt management hardshop plan. i used debt settlement the company was debt free league. they game me a lower montly payment and reduced my debt in half. all in one simple bill,.
hope this helps
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the guy that helped me was vince. ask for him
1800-213-9968 ex109