Debt Consolidation,
Good or Evil?
Nobody is ever alone. Thousands are caught in the debt trap each
year. Many approach debt consolidation companies, but such companies
should be handled with care. Statistics show that the average
American currently has thousands of dollars of unsecured debt.
Credit cards and loans are abundant, losses with few or no assets
to show for it are frequent.
Debt consolidation can, however, work and improve the client's
standard of living. The choice of company should be informed and
based upon careful research. Many websites have been created to
explain some of the pitfalls of debt consolidation and provide
support in the search for an appropriate debt management partner.
In many cases this solution may not be the appropriate route.
In other cases loans may be repaid with less aggravation when
such a debt management strategy is applied.
They will attempt to give some guidance on consolidation and management
strategies but inevitably the final decision is the client's.
The purpose of this release is to make the choice of debt management
strategy and partner, an informed one.
Let’s start by looking at what debt consolidation is:
The company chosen to service will negotiate with existing creditors
and seek the minimum contribution they will accept. The agent
will in turn charge one monthly sum representing all payments
for that month (including his charges).
Money isn’t loaned and one still owes money to the same
creditors. The terms of the agreement with the creditor however
may be vastly altered in the client's favour through debt consolidation.
Typical loans that may be consolidated include outstanding debts
on:
- Credit cards
- Medical bills
- Personal loans
- Utility bills
- Taxes
The application of a debt management strategy can sometimes be
so successful that it leaves the client able to pay more than
the minimum amount, remember by paying more to the company (and
therefore the creditors) one will be saving money over the term
of the loan and shortening the period of debt. Debt consolidation
really can work but the circumstances need to be right.
The creditors could finally be being paid on time and stop those
harassing calls. Creditors may acknowledge payments as prompt,
good payments and credit ratings may start to improve in a very
short space of time.
