Debt Consolidator

Archive for December, 2009

We do not have a lot of debt, but want to buy a house in 2-4 years. We want our credit to be squeeky clean. I’ve heard of companies that will make offers to the collectors and then consolidate all the bills into one monthly bill. Any good advice?

Debt consolidation comes in many forms, so it is important that you reflect on what your needs and concerns and financial situation are before signing up for an online debt consolidation program. The four primary concerns for most consumers are: i) monthly payment, ii) time to debt freedom, iii) total cost, and iv) the credit rating impact of the consolidation program. Be sure to evaluate each program, relative to your prioritization of these factors.

Debt Consolidation Loan
Many people think first of a debt consolidation loan when seeking online debt consolidation. This option typically means a second home loan (or home equity line of credit) or refinancing your primary mortgage. In a debt consolidation loan, you exchange one loan for another. The most frequent form is taking out a mortgage loan, which carries a lower interest rate and is tax deductible, to pay off high interest rate credit card debt. It is important to be aware that shifting unsecured debt to secured debt can create a volatile situation, if there is ever a chance that you cannot afford the new mortgage payment you are now putting yourself at risk of foreclosure! In the case of a debt consolidation loan, most mortgages are 30 year loan, which means that the total cost and the time to debt freedom could be very high… but the monthly payment will be lower than other options and there is no credit rating impact.

Credit Counseling
Credit counseling, or signing up for a debt management plan, is a very common form of online debt consolidation. There are many companies offering online credit counseling, which is essentially a way to make one payment directly to the credit counseling agency, which then distributes that payment to your creditors. Most times, a credit counseling agency will be able to lower your monthly payments by getting interest rate concessions from your lenders or creditors. It is important to understand that in a credit counseling program, you are still repaying 100% of your debts – but with lower monthly payments. On average, most online credit counseling programs take around five years. While most credit counseling programs do not impact your FICO score, being enrolled in a credit counseling debt management plan DOES show up on your credit report… and, unfortunately, many lenders look at enrollment in credit counseling akin to filing for Chapter 13 Bankruptcy – or using a third party to re-organize your debts.

Debt Settlement
Debt settlement, also called debt negotiation, is a form of online debt consolidation that cuts your total debt, sometimes over 50%, with lower monthly payments. Debt settlement programs typically run around three years. It is important to keep in mind, however, that during the life of your debt settlement program, you are NOT paying your creditors. This means that a debt settlement solution of online debt consolidation will negatively impact your credit rating. Your credit rating will not be good, at a minimum, for the term of your debt settlement program. However, debt settlement is usually the fastest and cheapest way to debt freedom, with a low monthly payment, while avoiding Chapter 7 Bankruptcy. The trade-off here is a negative credit rating versus saving money.

Net-net: while there are many forms of online debt consolidation, many people with good to perfect credit who own homes should look into debt consolidation loans, while consumers with high credit card debt and poor credit may want to explore debt settlement or debt negotiation. However, each consumer is different, so find the online debt consolidation option that fits for you.

Look at these companies for more information:

Debt Consolidation Loan: http://www.bills.com
Credit Counseling: http://www.careonecredit.com
Debt Settlement: http://www.freedomdebtrelief.com

I am in debt big time I have a lot of old hospital bills, credit cards, student loans. i have creditors calling me up to 15 times a day, calling a low life for ignoring them. I want to meet with a debt consolidator to see if they can help, but i was told that doing that is a bad a filling for bankruptcy. I don’t want it to hurt my credit score for 7 years like I’m told. Has anyone out there ever used a debt consolidator? Is it a good idea? I need to do something because i have been out of work for 7 months now and I need help. I live in Arizona if anyone one knows a good agency out here.

Many, many debt consolidation agencies are scams. You can get a legitimate not-for-profit debt consolidation from very few places. Most are funded by credit card companies. You can get the name of a good place through your local department of Health and Human Services. The counselors there should know who can give you good financial advice. Also, don’t be afraid to talk to a bankruptcy lawyer. Sometimes you really do need that fresh start. If you have collectors calling you all the time, your credit is already damaged. Try to get both sides of the story from honest sources, and good luck. It will get better, so hang in there.

I have bad credit, I let someone borrow money from two of my credit cards and they stop paying them for like 3 months.( how irresponsible of me, i know) I had to start an account with one of the debt consolidators to make one single payment a month on both those credit cards, the interest for nonpayment where so high my payment on every card was like $500 a month, ridiculous!
Now I have a really bad credit score. How do i fix this?

?redit repair work?d fine to fix my credit. They disputed and removed lots of bad items from my credit report. I used this service – creditreport.imess.net

Without screwing up my credit rating? I see so many commercials for credit/debt consolidations.

HI! You should check out the company I went with. they were great–my credit score is better then before. I paid my debts in full–just at a lower interest rate and payment. I also had just one payment per month. I still received my statements showing that the payments were made and they also helped me with my budget
Here is their website:
http://www.debtcounselingcorp.org

I HAVE TRIED MOST PLACES FOR A LOAN TO PAY OFF DEBTS AND MAKE MONTHLY OUTGOINGS LOWER.BUT BECAUSE I AM CURRENTLY A HOUSEWIFE,AND DO NOT WANT IT TO BE A JOINT APPLICATION NO ONE WILL EXCEPT ME.OH AND I DO HAVE BAD CREDIT RATING!

I know how you feel, its bad isnt it. The only places that will lend are the ones who charge extortionate interest rates so you get into a bigger mess than you were in the 1st place. Those lenders should not be allowed to do business with any1, they just prey on peoples weaknesses. whilst rubbing their hands at the profits they make.

I need to consolidate my bills, i have found creditsolutions.com, but then i went to the better business bereau site and found some complaints. soo now im a little weary…. if anyone knows of a good company that does what they say they do and is honest and hasnt had any problems please let me know. thank you all so much.

You want to investigate www.daveramsey.com and get Dave Ramsey’s books from the library. Debt consolidation is NOT the answer. Not trying to be preachy here but the answer is the debt snowball and careful budgeting. I know it sounds insane but it works. Get his book from the library and give it a try.

than what I am making now.. Are there any places that will approve me for what I make?

They are ripping you off. There are tons of companies that can help the only thing is when people are stressed by debt they end up making wrong decisions.
so you want to read up on it all so that you’ll be able to find a good deal and not fall pray of any con artist.
here you’ll find tons more info than I could possibly
write myself. It’ll take a bit but it’s your money and well worth
taking your time over it
http://credit-cards.ebookorama.com
and here http://finance.ebookorama.com
also plenty more to read here
http://credit.ebookorama.com
http://credit-repair.ebookorama.com
good luck!

What is the benefit of using debt consolidation for credit card debt? I am trying to decide to either call the credit card companies myself and negotiate for a lower payoff/settlement amount, or to use a debt consolidation company? If I negotiate with the credit cards directly, will that be considered a charge off? I would want to settle myself if I can to avoid paying all the months of high interest. But if I use debt consolidation, then they will charge me a fee every month for so many years? What is their purpose? What would be the best route to go financially?

You have to make sure you have a reputable debt consolidation company. There are many out there that are not. I know that Consumer Credit Counseling is good because NCUA backs them and I have to work with them to coordinate classes for our members. The thing about debt consolidation companies is that sometimes they can get a better payment plan or rate because they have deal in place with the cc companies. Also, the credit card companies feel better because they know you are working with someone to actually pay down your debt.

You could also look into a consolidation loan through a credit union or bank. You have to look around and make sure you are getting a decent interest rate.

I think that you can get free consultations with the debt consolidation companies. This should tell you what the costs/fees would be. You can always try the calling the credit card companies first to work out a deal.

Good Luck!

Do not go to "debt consolidators" who spend big bucks advertising their services. Think about it – they need to make a lot of profit to pay for those ads. Who do you think they are making that profit from?

If you belong to a labor union, many labor unions have union benefits that include credit counseling, debt management, etc. Check that out.

Also some (repeat: SOME) churches, synagogues and other religious congregations’ leaders maintain lists of legitimate nonprofit debt assistance resources — but note: some also do NOT, and I have seen it happen that a well meaning religious leader will just "recommend" calling the place with the biggest billboard or the fanciest tv advertising too – so if you contact your religious organization ASK how they arrived the particular recommendations that they offer.

Generally the ones that claim they can "consolidate" your debts and REDUCE your TOTAL DEBT are lying.

The best that (legitimate) debt consolidation can do is (possibly) reduce the INTEREST RATE you are paying and MAYBE reduce the MONTHLY PAYMENTS — BUT … you will then be making those monthly payments for LONGER than you would have if you’d made higher payments for a shorter period of time.

DEBT SETTLEMENT: they all promise to "settle" your debts for pennies on the dollar, and they are virtually all scams.

DEBT MANAGEMENT: Debt management plans arrange for you to make one payment to them, which they distribute among your creditors in accord with arrangements they’ve made with your creditors. BE CAREFUL. Some can be legit, but there are many of these which are also scams.

If it sounds too good to be true, it probably is.

The only way you can truly "get out of paying" the debt you owe is by filing bankruptcy. NONE of these alleged "bankruptcy alternatives" can do the same thing legitimately and MANY are scams.

I am wondering would it be faster and better to consolidate our debt or to just research how much we owe to each individual company and pay off a settlement that we negotiate?

Debt Consolidation Loan is one of the most common solutions people think of when they fall into financial difficulties.

Debt consolidation loans transfer debt from one place to another. While this may sound good, since many times it can appear to lower your monthly payments, a debt consolidation loan will not reduce the amount you owe. You will still pay back 100% of the debt consolidation loan, plus interest. The interest rate is sometimes lower than before, but this is because debt consolidation loans are usually secured loans that cannot be lowered or negotiated. Once you sign up for a debt consolidation loan, you have just gone from an unsecured debt to a secured debt and have put your personal assets (e.g. your car or home) at risk. At that point if you can’t pay your bills your creditors can come and take your personal property – thus creating a bigger problem than you had to begin with.

Debt settlement is a program designed for consumers with serious debt problems who are unable to maintain payment obligations and are considering bankruptcy or credit counseling.

Debt settlement is the process in which you stop paying your creditors for some time and save that money so that you can then negotiate with them to settle the debt for a lesser amount. So it
is better to seek help from any reputed debt settlement company. Such companies can handle it properly as they are experts in that field.