Consolidating your Debt
Saturday, August 8th, 2009 Subscribe To Our Feed
Right now, it is all too common for individuals to be in debt to the point that they need to enlist outside debt management help to be able to resolve their debts. Not only can the debt be overwhelming, but the stress of dealing with the problems associated with these debts can be debilitating. Along with all this, you have to try to come to a decision on how to manage your debt. Let someone else manage your finances also brings concerns of reliability.
Credit counseling is one of the best ways to get debt management help, but if you are seriously past due (more than 3 months), it might not work for you. Credit counseling has a one-time enrollment fee that will not exceed $75 and a monthly fee that will not exceed $50. This may sound expensive, but it you consider that most of your interest rates are going to go down to 10% or less, $30-$50 is a steal.
Your lenders will interact directly with the credit counseling organization. You will make one payment per month to them and the credit counseling service will disburse it to your lenders as required. Your interest rates will be reduced, your fees will be eliminated and your collection calls will stop. Being able to honor your agreement is very important. Two percent of you total balances will be the monthly amount you will be required as a payment. Depending on your total debt, your debt management plan will take 3-7 years.
Debt management help through a credit counseling service can be what you need if you feel you are becoming overwhelmed with debt. However, this is probably not going to work for you if you have are not able to make the 2% payment each month or if your debt is more than 3 months past due. Debt negotiation and bankruptcy are a better option for this.
A good start is with a credit counseling organization. Most of them are nonprofit and will advise you of your best debt relief option, even if it not credit counseling. Financial education and budgeting information is available through the credit counseling organization.
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