| SolveYourProblem.com
Article Series: Debt
Relief & Debt Consolidation
I Want To Get Rid
Of My Debt...NOW!
What
Is The Role of a Debt Consolidation Company?
Perhaps you find yourself drowning in debt.
Maybe you have fallen behind in your monthly bills, and you
just want to keep that telephone from ringing. On the other
hand, maybe you have not yet fallen behind, but you anticipate
changes in your financial circumstances that could lead to
your falling into a fiscal hole if you do not act quickly.
Whatever you situation may be, the role of a debt consolidation
company is pretty much that of a life jacket in an ocean, or
of a rope thrown to someone stuck hip deep in mud – they will
not get you out of debt immediately, but eventually, they will
pull you out.
What
do they do anyway? That is usually the question
of those who are looking into the subject since they have
come to understand
that their financial situation is dire. If you are among them,
read on.
What a Debt Consolidation Company Does
When you call a debt consolidation company, the odds are pretty
good that you will be transferred to an account representative.
Conversely, if you start the process online, a representative
who is assigned will contact you to your specific account.
This person will be your go-to guide on the road out of debt.
She
or he will ask you to list your unsecured debts. An unsecured
debt is money that you owe to a creditor, which is not tied
to specific asset. For example, a mortgage loan is considered
a secured loan, since the bank that wrote the mortgage hold
the title to your house until the debt is paid in full. The
same is true for a car loan, where the lender will hold the
car’s pink slip until you pay it off. Instead, unsecured debts
are monies you owe to credit cards, on medical bills, on your
cell phone or cable bills, and also on personal loans. To give
your account representative the most accurate picture, it is
important to give the name of the creditor, the account number,
the balance that is currently due, the amount of the monthly
payment, and your interest rate.
Your
account representative will now contact each creditor and
work out a payment plan with them. The goal is to reverse
late fees, overdraft fees, and also reduce the interest rate
to help you climb out of debt faster. In return for their being
willing to work with you, many creditors – especially credit
card companies – will require you to cut up your cards and
no longer use your accounts. Sometimes, the debt consolidation
company will require you to sign a promise not to apply for
any more credit while you are participating in their program.
Once your account representative is finished with her or his
negotiations with your creditors, she or he will let you know
how much each creditor was willing to accept on a monthly basis.
The sum of that payment is usually lower than what you would
have paid on your own to your creditors. You will now be able
to write one check to your debt consolidation company who will
then turn around and disburse the funds to your individual
creditors.
The goal is to climb out of debt within three to perhaps six
years. If you stick to the plan, you will see your unsecured
debts shrink, climb out of debt in a relatively short period
of time, and hopefully also save your credit rating from taking
too much of a plunge.
What a Debt Consolidation Company Does Not Do
A debt consolidation company will not work with your mortgage
holder or the bank holding you car loan. These debts are considered
secured by the very asset you have in your possession, and
for this reason the company will not be able to work with the
lenders on those.
Sometimes a client will present accounts to a consolidation
company that are already in the hands of a collection company.
It is important to remember that collection companies may not
be willing to work with them. As a matter of fact, there are
some creditors who refuse to renegotiate their customer agreements
and will therefore not want to see their accounts included
with a debt consolidation company.
Additionally, a consolidation company will not be able to
fix your credit. Only time and discipline will be able to accomplish
this.
Click here to discover my current SolveYourProblem recommendation and choice pick for the fastest, easiest and best debt relief solution you'll find anywhere. Get it and reward yourself with more cash in your pocket.
# # # # #
by SolveYourProblem.com
: 2007
> Home > Debt
Free Articles: Main Page
|
