Contrary to popular belief there are a couple of different ways to consolidate your debts. This means you have options and need to carefully consider each one before taking any action to resolve your debt. This article will tell discuss a couple of those ways and hopefully leave you a little bit more knowledgeable about some of your choices. The most important action is of course not to panic. There is almost always a way to improve your situation if you can find time to sit down with a professional and calmly discuss your options. Let’s get started.
This used to be a fairly common and effective way for people who were homeowners to take care of their debts. Now due to the fact that the housing and credit market is still a long way off from fully recovering it is not such a good idea anymore. House values have plummeted and the lending market is so tight you could end up worse off then you were before.
Credit Counseling Services
This is the one that you have probably heard the most about. Since the economy took it’s downturn Credit Counseling Companies seem to be advertising everywhere. This companies help you by providing what is known as a debt management plan. They offer techniques such as debt counseling, the ability to get you lower interest rates, preventing future late fees, Stopping phone calls, and getting your debt paid off within five years. They are indeed one of the better options.
This is where you try and make individual deals with your different creditors. You basically explain to them why you will never be able to pay the debt back in full try and get them to agree to a much smaller payoff in exchange for clearing up your debt and your credit. It was pretty effective back in the eighties but not so much now unless you have someone experienced with this helping you.
“This is what we used to call robbing Peter to pay Paul. First of all getting an unsecured personal loan now is more difficult than ever. Companies that do offer these types of loans charge higher interest rates then normal and it’s just not a good idea. If you’re in a tough spot and need quick cash and are desperate to pay your utility bills, for example, you can get a quick loan to help you through a rough patch. But certainly don’t make this a habit.