Debt Consolidation as a Straightforward Debt Relief Option
You can listen to all the promises you like from all of the advertising on radio and television about debt relief. It seems the mortgage brokers, who were so popular in the lead up to the recession have been replaced, by offers from loan modifiers and a string of others willing to help us out of the debt the first string got us into. The rush to refinance has been replaced by the rush to stay out of foreclosure.
Among all of the song and dance, there are methods of straightforward debt relief. The first of these has been around much longer than our woes with the recent recession. It is a simple, long established method to stop the monthly bleeding from the checkbook. It’s called debt consolidation.
The purpose of debt consolidation is to lower your monthly payments. This should make your household more solvent by allowing you to keep more of your take home pay for necessities and savings. The process is simple.
When you consolidate debt, you put it all under one simple umbrella. You simply take all of your credit and lump it together. The monthly interest rates will be lower and the payments will be greatly reduced because you extend the term of your debt over a longer period of time.
Debt Relief
Depending upon your situation, you can do a refinance of your home and use the equity to pay off your debt as a consolidation, or put all of your credit bills (with the exception of your mortgage) together under a single lender. Many banks and loan brokers specialize in debt consolidation and they can help you choose what type of consolidation is best for your situation. Whatever you choose, debt consolidation is a time-tested form of debt relief that is straightforward and easy.
If you find yourself in a severe debt situation, your only choice before bankruptcy may be the services of a credit counselor. Most credit counseling is free, but be certain there are absolutely no fees with the counseling service you choose before assuming they are free. Not all non-profit services are free.
A credit counselor will negotiate your current debt down in order to save you money on your monthly payments. They may do this by having creditors waive penalties, fees, and interest. In some cases, they are able to obtain debt forgiveness, which means that the creditor eliminates part of your debt entirely.
A credit counselor will work with you to discover what amount of monthly payment you can afford. The credit counselor will then collect a monthly payment from you and distribute the negotiated payments to your creditors.
