Interest free debt consolidation are those processes whereby you roll all of your existing debts into one payment and interest rate, and which do not create an aggregate increase on the interest rate. Interest free debt consolidation companies provide consumers the option of paying back their unsecured credit card debt through a monthly repayment plan. This plan pays off creditors and you will save hundreds of dollars in late fees, interests and over the limit fees. This type of financing helps those individuals that want to eliminate debt without having to declare bankruptcy.

Interest free debt consolidation loans can be a blessing to anyone facing an unsure financial future because of past imprudent spending habits. Interest free debt consolidation can free a person of debt from credit cards, personal loans, store credit, lines of credit, medical bills, etc. This type of financing is not practical in consolidating mortgage or car loans, as they are not deemed unsecured credit.

Many loans are available review on the Internet and one can interact with counselors who will help you fill out a financial questionnaire, submit financial information etc. Just make sure that the company you are dealing with is reputable. Most are and use

modern, encrypted information technology for security. Interest free debt consolidation programs are uncomplicated to use and easy to find. A web search will offer hundreds of companies to choose from. Many interest free debt consolidations organizations are obtainable twenty-four hours a day. Statistics show that more than two million people have been helped with a debt consolidation loan.

Free Debt Consolidation provides detailed information on Free Debt Consolidation, Free Debt Consolidation Services, Free Debt Consolidation Quotes, Interest Free Debt Consolidation and more. Free Debt Consolidation is affiliated with Online Debt Consolidation Loans.

Debt Consolidation FAQ:

Question: What effect does using one of these “debt consolidation” companies have on your credit rating?
Do they really help? Does your monthly payment really drop substantially? Did it work for you?

Answer: I listen to a radio show every day (Dave Ramsey …look it up, it’s pretty interesting). He says that debt consolidation does some damage to your credit rating, they’re not good plans and sometimes the mess up. He also notes that if you don’t change your behavior, you’re going to get back in debt. He has a process where you pay minimums on every debt you have and then pay everything you can on the smallest. Then once that’s paid off, work on paying off the next.
This is part of a bigger (but very simple) plan he details for free.

Question: Is it still better to pay off the debt myself or continue to work with debt consolidation company?
I have accumulated a lot of credit card debt due to an illness and loss of employment. The amounts I was paying became so large that I couldn’t afford to make the minimum payments so I decided to seek a debt management company. This has been going on for a year, but I don’t seem to be getting anywhere because the interest rates continue to climb on the accounts I’m not currently paying on.

Answer: Work with a company. My husband and I worked with a company in Des Moines, Iowa called Consumer Credit. It was the BEST thing we ever did! July of 2002 we went to them and by October of 2005 we were out of credit card debt! In November of 2005 we were able to move into a new home, bigger than our two bedroom bungalow we lived in for 5 years.

Question: How do debt consolidation places work?

Answer: Debt consolidation agencies are set up to reduce your debts and interests. They help you by negotiating with your creditors on your own terms. Their basic function is to consolidate all your debts or monthly bills in one convenient amount payable every month; and to convince your creditors to accept these terms.

Question: In some debt trouble and I need to know if debt management is better or debt consolidation?

Answer: Debt management would be where a third party comes in and works with you.

For debt consolidation, lets say you owe one credit card x and y. You would combine the two and make the payments.

I don’t know what your debt position is. For some people, debt management is the solution, but it may impact your credit, due to practices that some companies use.

Question: Have you ever heard of debt management (not debt consolidation) and if so, do you think it is beneficial? Why?
I make about $55,000/year and I currently owe approx. $34,000 in credit debt alone. I do not want to file bankruptcy if I don’t have to. I also would like to stay away from consolidation. Today, I was told by a company that they have something called debt management. I’ve never heard of that, but they said unlike debt consolidation where they lower both your interest rate AND balance, all debt management does is get the creditor to lower the interest rate. I would pay a monthly payment to the company and a monthly fee and they would make my payment for me.
At this point, I can only make minimum payments and my balance is going nowhere. Should I give debt management a try?

Answer: Stay away from Debt Management. That is worse than bankruptcy. Getting a debt management service says to all creditors that you cannot manage money.

Best thing to do is get a second job and start paying off and canceling those cards one at a time. Make th minimum payments, but take the smallest debt first and conquer it.

With working a second job, maybe you can also control your spending. Also, make out a budget and live by it.

Question: What is the difference between debt consolidation & credit consolidation?
I am trying to find out if they are the same service, or if they are two separate services, how they work, which is better service to use and why, and a rough estimate of time and cost of these services.

Answer: From a technical standpoint, there is no such thing as credit consolidation. Credit is simply an unmonetized offer of purchasing potential. Simply put, you might have $10,000 as a credit limit, but it won’t hurt you until you use it and can’t pay it back. Debt consolidators look to combine your higher interest debt like credit cards etc, into a single lower interest payment. If you’re deep in hoc, this can save you hundreds per month. Make sure you’re dealing with someone reputable before you sign anything. Your state’s Better Business Bureau is a good place to start. Some states have credit counseling services available as well.

Question: What is the difference between getting the equity of your home and debt consolidation?

Answer: Debt consolidation is when you get one large loan to cover all your smaller debts. It can be any loan and should be when you can get a better interest rate or to spread your debt over more years.
A home equity loan is a mortgage where you pull cash out. That cash can be used any way you want. Invest or pay off the highest interest debts. You can get them up to 30 years so paying off a 2 year car payment with a 30 year mortgage reduces your monthly payment but you will be paying 30 more years on a car you may not have more than a few years.
The home equity loan means when you sell your house you will get less at closing and may not be able to afford to sell at all or will lose your home instead of having the car repo’d.
Besides the danger of losing your home you are in danger of running the debt back up. So if you refinanced your 2 year car loan to a 30 year mortgage you might go buy a different car before you paid off the current one and will have a double debt.

Question: What’s your input on debt consolidation?
My husband seems to let his debt really get him down at times. I sometimes find him staring off in a days, and I know that’s what’s on his mind. I know he has student loans, credit card payments, and still paying on his truck, & other misc. bills. What’s the advantages and/or disadvantages of contacting a debt consolidation company. How if at all can that help our situation?

Answer: Consolidation simply moves the debt around. Within a year, most people (over 90%) end up worse off after consolidation.

Look for a local source that teaches credit management and budgeting. Churches, community groups & Credit Unions are good sources.The classes could be free or cost up to $100. NO MORE THAN $100. Some people charge $500 or more and are of questionable value.

Focus on reducing spending, and paying off the smallest debt first, then the next, etc.

Would you like to know how to get rid of debt the fast way? Probably the smart way would be a better option, maybe the cheaper way is a good one as well, how about the most effective way, but as you want the quicker way, let see some aspects of debt management programs in order to help you decide the best way of getting your finance back to order in the shortest span of time possible.

Firstly, if you are searching for a fast way of to get rid of debt it is very opportune you know that with programs like debt consolidation you will be debt free in 3-4-5 years, then if that is fast enough for you and the associated benefits such as; lower and unique monthly payment, lower interest rate negotiated in your behalf by a debt consolidator, and the huge benefit of rebuilding your credit during the repayment span, then debt consolidation is the right program for you.

On the other hand, if you are not too worried about rebuilding your credit, because you are not thinking in new lines of credit in the near future, then debt settlement or debt negotiation could be of your interest, you get all your debt consolidated in one monthly payment, but with a twist, because your debt is reduced by your debt counselors, you save thousands through this program, plus the span of time needed for becoming debt free is shorter, 12-36 months.

You have then different options, which one is better? It depends on your very specific financial situation and the goals you want to reach, then specialized advise from debt counselors is priceless, by working with a trusted and reliable debt management company you will make certainly the right decisions.

Summing up, while you can get a free annual credit report, this does not contain your credit scores making it incomplete, then trying to get a full credit report in a free trial base with a trusted credit reporting agency become a must, this way you will have a picture full of financial details that will help you get your credit score improved and consequently a fixed credit report.

Hector Milla runs the My Free Credit Report website, where you can see his best rated free credit reporting companies recommendation, and the Improve Your Credit Score resources center. Find out how to get a 3 in 1 free credit report in a free trial base and how to get your credit score improved respectively, visit for further information.

Debt Consolidator FAQ:

Question: I have $7000 in credit card debt, should I go to a debt consolidator?
I’m trying to work at paying off my debt and get my credit score up. I have close to $7000 in credit card debt (I have 7 credit cards). Some of the credit cards have high APRs between 16% and 24%. I’ve been paying all my monthly payments on time and have been paying more than the minimum payment. Do you think going to a debt consolidator would be better or even helpful? If so, what are good companies to go to?

Answer: I woudn’t recommend it. I work in Collections at a mortgage company. Paying more than the minimum monthly payment on time every month looks MUCH BETTER on your credit then consolidation. You should be very proud of yourself for that. You might try calling the cards with the low APR to see if you can transfer some or all of you balance(s) from the high APR cards. Even if it goes over your limit, they might allow you to. Consolidation will also terminate many opportunities for credit increases, new credit card offers, and many lenders will not extend credit to you until the program is complete. Lastly, $7000 of credit card debt really isn’t too bad. Yes it’s kinda high, but it’s not out of control (and these are the people who need consolidation services), especially since you are able to pay more than the minimum every month.

Question: Is using a debt consolidator a wise choice?
Has anyone had any negative or positive results from using a debt consolidator?

Answer: With a debt consolidator, you are borrowing more money to pay off what you already owe. With Debt Consolidation, you pay back all of your debt balances but pay a hefty fee for the consolidation loan, plus their fees to process the loan.
Even though your debts get paid all at once, you still owe the same amount, only now you also owe them. All of which means that your credit score will not change because your total debt owed has increased and you are now using 100% of your available credit (the consolidation loan).

You might want to look into Debt Settlement, this is where you pay back a lower amount (usually around 50%) while the creditor agrees to forgive the remaining balance.

Question: Is it better to use a Credit Counselor or Debt Consolidator or to pay on my own?
Trying to find out which is better, going to a consolidator to take control of my outrageous debt or not pay some debts each month to slowly pay off others. I have 7 cc’s right now and if I pay 2 of them in the next two months and not pay 5 of them in those two months, I can pay off both balances. Then after that, I can concentrate on paying down each card one at a time. Would this make more sense instead of a debt consolidation?

Answer: Sometimes its better to work out your loans on your own but if you see no way out then I would suggest the credit counselor for advice. They may suggest ways you can do everything on your own or help you work things out with their help. It just depends on your situation and how far in debt you are.

Question: Debt consolidator?
We want to buy a house at the end of the year and could afford to pay off some debt before then- Who should we go through and what are some things we should look for or questions we should ask, so we don’t get fooled?

Answer: You can do it your self. Make a list of all Debtors, and amount due to them. The total amount is your, consolidated debt.

Give grades, to all debtors in your list as 1, 2, 3, ….., to indicate, to whom you have to pay first (normally a long period debt), pay accordingly one by one.

Question: Have you gone or know enough about going through Credit Solutions or a debt consolidator?
As most people know times are hard and my husband like many others has lost his job. We are really considering going through a company called Credit solutions or maybe another dept consolidator. To me it seems really good but I know that sometimes you can get “screwed”. I would like to know how bad this will really hurt my credit and if any of this is all worth doing?

Answer: If you must do this use Consumer Credit Counseling Services they are the oldest and largest non-profit credit counseling service in the nation and have offices in most every major city.

I used them several years ago and they lowered both my monthly payments and interest rate and I was debt free in 36-months.

Question: Does anyone know of a good debt consolidator?
I am about 10,000 in debt. Anyone know how I can consolidate my bills into one low monthly payment?

Answer: There’s various Debt Consolidators on the net. However, it’s easy to type “debt consolidation” into a search engine and get help from any of the firms listed. But some credit solutions companies might just create more problems. So do some detailed research on each service provider…

Furthermore, might not be a good idea to consider this option because there’s a chance that obtaining a debt consolidation loan will hurt your credit. The best way to resolve outstanding debt is often to pay more each month to service their debt. …Or another popular approach is to transfer your high-interest credit card debt to some lower-interest loan.

Question: I need to find a legit debt consolidator, just for a couple credit cards, my debt is about $5000.?
I am in debt probably about $5000 just with some credit cards. I have no idea where to even start, I was wondering if anyone had any good recommendations for me.

Answer: No don’t use a debt consolidator, call the credit card company’s and negotiate a lower rate and if they don’t tell them you are transferring your balance to another credit card. Just find one with a better rate then you have now.

Question: Who is a legit debt consolidator?
I’m trying to find a debt consolidation company for my mom. I looked online but I cant tell who is real and who is fake. She doesn’t have credit card debt just old bills.

Answer: Greenpath/accel credit services. I had them for about a year and I love them. They are very helpful and do not scam you.

When you are looking for help in getting your monthly obligations under control, you have many different choices on what kinds of financial companies to choose from. In the end, the decision you make on which company to go with will greatly impact the quality of that decision.

When you go to a bank for debt assistance you will be offered the loan programs that they have, and then you will be asked to choose from one of those programs to find the one that best fits your situation. A bank is not necessarily set up to do credit counseling, and the associates at a bank are very knowledgeable people but they also have several other types of financial solutions that they sell along with debt consolidation. In that case what you are getting is a representative who will help you based on their limited knowledge, and they will offer you solutions based on their company’s limited selection. In that case, you are getting a debt assistance loan but you cannot be completely sure you are getting the right solution for your situation.

A debt consolidation company is made up of professionals who spend their time understanding the products and programs they have to offer, and they also spend a great deal of time understanding the various situations in which their programs and plans are appropriate. There may be many different kinds of solutions that would be best for your situation, and only a trained and experienced debt professional can really differentiate which of those options is best for you and make a recommendation based on their personal experience.

Deciding to get debt help is a smart move, the next smart move to make is be certain that the debt assistance you are getting is given to you by a trained and experienced professional. Having someone sell you a debt consolidation loan just for the sake of having it may not properly address your situation.

By the way, by researching and comparing the best debt consolidation companies in the market, you will be able to determine the one that meet your specific financial situation, plus the cheaper interest rates offered. Nonetheless, it is advisable going with a trusted and reputable debt counselor before making any decision, this way you will save time through specialized advise coming from a seasoned debt advisor and money by getting better results in a shorter span of time.

Hector Milla runs the Best Debt Consolidation Company website – where you can see his best rated debt consolidation company recommendation.

Visit for further information and read our full review of the best debt consolidation service, plus articles and video training about how to get the most of your debt consolidation process.

Debt Consolidation FAQ:

Question: Need money for debt consolidation and home repair on a new purchase and I have damaged credit?
I recently purchased my home and now have plumbing issues that are not covered by my insurance. I have some equity, but cant seem to get approved for anything, maybe I am looking in the wrong place. Help!

Answer: Expect to pay higher than normal interest rate if you are able to get a loan at all to consolidate your debt… but trust me, getting a loan from less than reliable sources can cause a lot of grief in the long run

Question: What are the benefits of doing debt consolidation instead of bankruptcy? Any advice or sites to visit?
It is true that bankruptcy is going to show on my credit for the rest of my life? They are asking for $600 for a monthly payment and I cant do that amount. What can I do? I don’t want to do bankruptcy.

Answer: Bankruptcy stays on your credit for 10 years. If you go with a debt management company then your credit can go down but in the long run will start to increase as you make your timely payments. The other thing you can do is a debt settlement. That means that a company will negotiate with your credit cards to pay off half the balance and consider it paid off. you must be aware though that your credit cards are not getting paid until at least the half is accumulated.

Question: What is the best non profit debt consolidation company to use?
I have a friend who needs help and I want to make sure he gets the best company to help him.

Answer: The best one I know of is Consumer Credit Counseling Services. They are the largest and oldest non profit credit counseling service in the country.

Question: I was wondering if debt consolidation is still an option after charging off with my creditors?
I believe my accounts are now w 3rd party and law offices. It has been a year since I have been able to make payments. I am considering bankruptcy, but want to check out other possibilities.

Answer: Find non-profit credit counselors and talk to them whether there’s anything you can do at this point. Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But beware — just because an organization says it is “nonprofit” doesn’t guarantee that its services are free or affordable, or that its services are legitimate. In fact, some credit counseling organizations charge high fees, some of which may be hidden, or urge consumers to make “voluntary” contributions that cause them to fall deeper into debt.

Question: Is debt consolidation a bad thing?
Does a consolidation loan look bad on credit? I need to get my life together. I am under mountains of debt, with no hope of getting out of it without some kind of loan. I could not mentally handle a bankruptcy. I need advice please!

Answer: Debt consolidation can be a great way to start tackling your debt – whether it’s just lowering your rates, getting a better loan, or cutting your payments to get debt free faster. It is important that you know what your options are and what your goals are before choosing a debt consolidation program or company.

There is a chance that using debt consolidation services might affect your credit. Some debt management programs, like credit counseling, show up on your credit report. Some solutions, like debt settlement, don’t show up on your credit report, but by definition cause late payments. Most debt consolidation services are there to help you get out of debt, not to sustain your credit report or credit score, so you should prioritize what you really want in seeking debt consolidation help.

Question: What’s the difference between refinancing and debt consolidation?
I want to refinance and include my home equity loan and get extra money for a new car. What is the right option?

Answer: Refinancing reduces your current payments and you often can get money. Debt consolidation is combining loans together. So, refinancing is what you want.

Question: Found a home that has equity, is there a lender that will do first mortgage and debt consolidation in one loan
I have debt that I want to consolidate into a home purchase, since I found a home that is priced well below appraised value. Since there is already equity is there a lender that will do a first mortgage and second at the same time? This would reduce my debt to income and put me into a better financial situation since I would only have one payment would be lower.

Answer: By getting a second mortgage you will be at a higher interest rate and introducing a 2nd payment, so it would be like having 2 mortgage payments. Albeit the 2nd one is probably much lower. You should just negotiate a lower down payment and get a larger 1st mortgage.

I would consult a mortgage broker, it is much easier dealing with 1 broker then hunting for a lender. Let the broker do the negotiating for you. They usually find a better rate anyway.

Question: Any options besides Debt consolidation?
I have about $23,000 total in credit card debt. I have great credit just too much. Total it is probably 6 different credit cards. I am interested in debt consolidation thinking that it will help me pay these off faster. I have canceled all of my credit cards and will never open another one. Is there any other option or is debt consolidation my best option?

Answer: Find someone to reduce rate to 6%. That is the key to paying that $23,000 off as fast as you can. Get a 2nd job for a while to speed up repayment.

If you opt for a bill consolidation loan, you can bring down the rate of interest charged on your loan and repay your debt faster. However, these loans do not come for free. You have to consider the fees and get the right combination to repay your debts in a short time. Given below are some tips that will help you save your money

Do Not Forget The Fees

It is natural human tendency to focus on things that will be advantageous for us. However, do not forget to consider your fees that shall be charged on the transaction. Refinancing of a home mortgage and capitalizing the equity in your home sounds like a good idea. However, this transaction will cost thousands of dollars which may make all the difference to the affordability of the deal

On the other hand, a home equity loan or opening lines of credit based on your home equity will not cost much. If you borrow a small amount, you can manage the high interest rate as the fees charged are not very high. Personal loans are preferable as they are cheaper than credit card debts

Consolidate The High Interest First

What is the point of consolidating your bills with the help of a loan if you are going to pay the same or a higher rate of interest? The basic purpose of the transaction is to bring down your interest cost and your monthly repayment. Avoid consolidating low interest loans like student loans. Focus on consolidating the high interest portion of your debt to bring down your monthly outflow as well as to repay your debts on time. It takes five years to repay your credit card debt in full. Why not opt for a bill consolidation loan instead?

Want The Best Deals? Go Online!

Log on to the internet and a search for these loans on different websites. You will enjoy a low rate of interest and low fees and charges. Online loans are always cheaper than conventional loans. Even a difference of a fraction of a single percent will help you save a lot of money in the long run

Closed Your Account?

Simply repaying your debt in full on time is not sufficient. You should make sure that your account is closed so that it does not reflect poorly on your credit score. A good credit score will help you get good deals on your mortgage and other such transactions

Michael Clifford Ramsey writes about Personal Loans on his website, where you will find everything you need to know about Bill Consolidation and much more! Also visit: http://myloanguide.net

Bill Consolidation FAQ:

Question: Is bill consolidation using your home on a second mortgage a good idea?
I have qualified for a bill consolidation loan which will give me a second mortgage plus cash out and pay off my credit cards making one payment and I could really use the cash to start a business.

Answer: No. Pay off your credit cards as fast as you can.Even if you have to tighten up spending on other things for a while.More debt is not the answer to getting out of debt,no matter the terms or appeal.Sure you can get a lower interest rate on a second mortgage and it is likely a lower payment over a longer period of time,but it is all about spending discipline.As far as starting a business,there are a lot of options,but do not use a second mortgage for that either. Most people use excess cash for foolishness anyways.

Question: Bill Consolidation?
I am about $13,000 in debt. I spoke with this company that says they can cut my bills in half by having them settled and make one low monthly payment. Until know I have been paying little by little and not getting very far. Has anyone used a similar program and is it worth it or will it make things worse?

Answer: If you own a home don’t consider refinancing. You are converting short term debt to long term debt and you will be paying on the stuff you bought long after it is gone. Typically a person who consolidates their debt just ends up spending again and further in debt than when they started (the lesson wasn’t learned about reduced spending). Try paying off one bill at a time (higher interest first) and maybe some smaller bills (instant gratification). Debt reduction is not easy. It’s like losing weight. Its harder to take off then it was to put on

Question: I’m trying to get a bill consolidation loan, however, my credit score is low.
I am trying to rebuild my credit score and pay off my bills. I have made financial mistakes in the past, but am willing to work hard to correct the problem.

Answer: You will not get a loan with a low score.

If you are really serious about correcting your credit, contact a not for profit credit counseling agency. They will work with you to set up a budget, talk to your creditors and get your debt paid off in a reasonable amount of time.

Borrowing more money rarely fixes a problem when you are drowning in debt.

Question: What is a homeowner bill consolidation loan?
We have a high debt to income situation. I am looking for answers to get out of debt.

Answer: It may be a good idea but you are putting your home at risk and I would be hesitant and think not twice but four or five times before doing that. If there is a problem you will be kicked out of your home.

A homeowners consolidation loan is a gimmicky phrase that means that you will take out a loan based on the equity within your home and then use the money to payoff other debts

Question: How can I consolidate medical and hospital bills? is there someone who can help, like with bill consolidation?
I have an insurance co. that isn’t so great and I’m left with lots of balances. I’m paying as much on them as I can but they still keep piling up from emergency’s.

Answer: Be very careful with bill consolidators. Some are legitimate, some are not.

Medical providers are the quickest to agree to structured payment schedules. They are also the quickest to sue if you don’t stick to your agreement.

Put a detailed budget together, go to an in-person meeting with the creditor, show how much you can pay per month, and ask them to agree to accept that amount. Don’t do it over the phone or by email — do it in person.

If your story is persuasive, you will come out with an agreement. If you are not showing good faith in taking care of the indebtedness, you will not be successful.

Question: Does anyone know a lender that will lend a bill consolidation for bad credit?
I have poor credit and i need a lender to lend me a loan so i can pay off the bad items on my credit report.

Answer: If you have bad credit, you will get a high rate (if you are even approved). If you need a break on payments and interest, then your bad credit could help you qualify for a debt management plan. You may or may not need this type of program to get back on track.

I would definitely recommend meeting with a credit counselor instead of getting yet another form of credit. Here is a local directory of agencies for each state. I hope that you will get help somewhere.

Question: Bill Consolidation – who should do it and is it more beneficial to some than it is for others?

Answer: Bill consolidation is good if you are in a financial bind and having trouble keeping your bills paid on time. But never use bill consolidation as a way to put all your current bills into one payment and then go out and make more bills on the credit cards that you just consolidated or create new ones. Otherwise you are just putting yourself further into debt. Sometimes it is easier for people to pay just one bill once a month, than to try and keep on top of several bills, due at different times of the month. Hope this helps, Good luck. And remember Saving Money Makes Cents.

Question: How to get a Bill/Debt Consolidation Loan? ?
If you are getting a consolidation loan to combine all of your bills, how do you get approved for one, if your credit looks over extended. I am so many personal loans they are killing me in interest. All are payed on time and as agreed but I still can’t get approved to consolidate. How can I get approved?

Answer: If you belong to a credit union, they may be able to help you with a loan. They are more human and will work with you rather than a bank that makes it’s decision solely on the credit report. If you have direct deposit with them, sometimes they will give you a break on the interest rate as well (mine did).

The media is saturated with advertisements for debt consolidations options, not to mention your email inbox. Everyone has an answer for your problems and when people have problems there is no shortage of unscrupulous people waiting to take advantage of the situation. Debt consolidation scams are no different.

Scams of any kind can almost always be avoided with a little bit of common sense and some basic research. I received a check in the mail for $4,000. It took about 30 seconds to find information on the internet about the company that had written it and how the checks were bogus.

If someone says that they can eliminate your debt without you actually paying it and that your credit will not suffer for it, you will be disappointed if you buy into it. If you have debt and hope to keep your credit somewhat intact, you are going to have to repay the debt in full. Credit counseling companies can have your interest rates reduced, but you will still be repaying the total amount that you charged.

Debt settlement companies negotiate a reduction of your balance with your lender. This is legal, but you must be aware that you can be taxed on the money that is forgiven and they will report your account negatively to the credit bureau. This may still be the best option for you, but you must be aware that these are some of the consequences for selecting this debt relief option.

Debt service organizations all have aspects that are less than desirable, but the unfortunate part about this is that many of them are not forth coming with the cons of using their service. After all, they are selling a service and playing up the benefits and minimizing the disadvantages. This is just how they operate.

Before you sign anything, take the time to research what you are enrolling in thoroughly. The world is full of people that wished they had given more thought to decisions they have made.

Getting out of debt is not going to be easy, but it is necessary. There are several small steps that you can take that will expedite the process of getting out of debt. These steps all add up and before you know if you will begin to see a dent in your credit card balances. The biggest problem people have is knowing where to start. All most people need is guide that they can follow that lays out a clear plan for paying off debt.

If you are desperately looking for an answer to your credit card debt, this guide will give you the information you need be debt free quickly. If your debt is consuming you and you are ready to do something about it, see how you can begin eliminating your debt today.

Debt consolidation FAQ:

Question: What is a good way for debt consolidation?
I am trying to get out of debt I have 5 card adding up to about $2500.00, and also a loan of $10,500.00. I am having a baby at the end of the year and would like to either get rid of this debt or consolidate it to one payment that would be easier to pay off.

Answer: Visit your local credit union, they’ll certainly help you as best they can. Depending on your credit, this should be no problem at all. And if it is more convenient for you, they can probably even split your monthly payment so that you make two payments a month instead of one.

Question: Can a debt consolidation attorney represent me if they are not licensed to practice law in my state?
I am trying to get myself out of debt with pay day loans. I found a law office in PA that helps with this specifically. The problem is that I am in TX and I am not sure if they legally can help me. I don’t want to push the laws.

Answer: The direct answer to you question is that an attorney can not practice law in a state that he or she is not licensed. The way they get around that is to refer you to another attorney that is practicing in your state.

Normally, however, you do not have to consult an attorney to apply for a debt consolidation loan. Usually the attorney will counsel you about filing for bankruptcy. If you need help with pay day loans you can ask for help from the attorney general of your state. Look in government listings of your phone book

Question: What are the negative ramifications of a debt consolidation loan?
i want to consolidate my debt but am concerned with how negatively its affects are on my credit. can i pay on a consolidated debt at a significantly lower interest rate than now(I’m averaging +20%!)? if so, will that outweigh the side-effects?

Answer: It depends on how bad you are now. Consolidating means creating a whole new loan for a longer period of time. This would hopefully lower your payments enough so you can get back on track, in this case it might SAVE your credit score. A credit counselor will give you some tools and suggestions for reducing your payments, just keep an eye on what the % are, you want it to be lower than what you pay now.
However, debt consolidation can be nothing more than a way of putting off the inevitable. It really does little to correct the problem. That’s why many people come back to debt negotiation as a way of getting out of their financial problems and starting fresh start.

Question: I’m thinking about filing chapter 13 and doing debt consolidation, any thoughts or experiences?
I pay all my bills on time (for the most part) but it’s nothing but the minimum, I was thinking about doing chapter 13 debt consolidation, is this wise?

Answer: What about just trying the debt consolidation w/o chapter 13? It will significantly reduce your interest rates, and it only effects your credit a little bit, not as much as chapter 13.

Question: If you use one of those debt consolidation programs, does it affect your credit score?
You know where you call and they stick all your debt all together and then lower your interest rate so you can pay it off faster. Does that stay on your credit report, like filing bankruptcy?

Answer: It does show up on your credit report, and it will affect it negatively, but not as bad as not doing anything or bankruptcy.

Question: What student loan debt consolidation company has the lowest interest?
I’ll have around 110,000 dollars in debt by the time i finish my masters.

Answer: Remember though…a lower payment means more time in debt (unless you reduce the interest rate SUBSTANTIALLY). Also, in debt consolidation, you usually have to throw in the low interest loans along with the others, this cancels out any benefits of lowering the high interest rate loans. My suggestion is to line them up, and one by one tackle them with intensity and ferocity. 110,000 is going to take a little while, so keep your head down, focus and don’t get discouraged.

Question: How does the debt consolidation companies work?
I heard that I will have to file for Bankruptcies.

Answer: Debt consolidation means combining all your debt into one big sum, paying off all your credit cards, etc. and then paying it back over a longer period. The debt doesn’t disappear: you still have to pay it back, but you make one payment to one lender rather than lots of smaller payments to credit cards.

It doesn’t mean bankruptcy if you keep to the loan agreement. The trick is to use debt consolidation to get out of debt – don’t use it as an excuse to keep on spending! There are various types of debt consolidation and you need to do your own research.

Question: Where can I find a debt consolidation loan?
Can anyone give me a website where i can get debt consolidation loans?

Answer: I was also in deep debts last year and I took help of bills.com to consolidate my credit card debts, now I am almost debt free. I am happy with their service and recommend them for any kind of debt relief services.

One of the misconceptions about a debt assistance organization is that they will pay a client’s debt off and leave the client free of financial obligations when the process is over. This is a simple exaggeration of what consolidation actually is, and it is a common misunderstanding. Experts in this field take the products and services available to them and help someone combine their high interest credit card debt under one low interest rate loan payment. The client is still left with that loan payment that they must make every month, but with the interest payments cut drastically and the multiple monthly service charges brought down to one service charge, the savings every month can be hundreds of dollars.

As much as they would like to, a consolidation group is not able to help every one that comes to them for assistance. There is some extreme situation where a debt consolidation loan is not going to help a client, and the other services that are offered by a counselor are also not going to have any real effect for the client. If you allow your monthly credit card balance to grow to a point where not even consolidating the debt is going to lower the payments enough where you can afford it, then there is little that a consolidation expert can do for you.

Debt consolidation is a business that is based on expectations and trust. The customers have their expectations and they trust the professionals to help them reach their goals. But even debt assistance associations have their limits, and when those limits are reached there is little room to help. However, you have nothing to lose by trying a free first time consultation that usually those companies offer.

By the way, by researching and comparing the best debt consolidation companies in the market, you will be able to determine the one that meet your specific financial situation, plus the cheaper interest rates offered. Nonetheless, it is advisable going with a trusted and reputable debt counselor before making any decision, this way you will save time through specialized advise coming from a seasoned debt advisor and money by getting better results in a shorter span of time.

Hector Milla runs the Best Debt Consolidation Company website – where you can see his best rated debt consolidation company recommendation. Visit for further information and read our full review of the best debt consolidation service, plus articles and video training about how to get the most of your debt consolidation process.

Debt Consolidation FAQ:

Question: What’s the best debt consolidation company or group to go with?
I have one credit card with a $9,226 balance and another one around the same price. I was wondering what company is best for me to consolidate both these bills so that I can pay a low monthly fee and eliminate them.

Answer: You don’t want to go with a consolidation company. What you need is to talk to your creditors and arrange a lower payment plan. Ask them if they can provide you a minimal credit card (like $500) then put away the large balance credit cards away and don’t use them in the meantime. Keep to your payments by having pre-arranged payments automatically debited from your account instead of mailing the payments monthly. If you have opportunities where you can pay additional amounts to the credit cards, do that. Now, for the minimal credit card that they provide for you, keep that in rotation…only using it when absolutely necessary and something that you can pay off come billing time. Meaning when that bill comes in, you have to pay it in full. A starter American Express is a sample of a credit card like that. You have no choice but to pay the amount due on the bill.

Question: Is there really such a think as a nonprofit debt consolidation company? Are any even reasonably fair?
I’ve called several companies who consider themselves not-for-profit but when I talk to their reps, they start throwing out different fees which definitely are above common administrative costs. A couple of other companies I’ve called are somewhat reasonable with their fees, but the interest rates are bad. It seems as though they’re supporting themselves through whichever financial institution ends out loaning the money. Maybe I’m wrong and just haven’t found the right company??

Answer: There are ways of approaching this problem but there are also a lot of scams. First, you need to find out which type of debt consolidation would suit your circumstances, and second, you need to find a company which will deal with you fairly. People who lend you money will rarely do it for free, so you must be prepared for some costs.

My advice is to first speak to your bank. This will be free. Explain your circumstances and ask their advice. You will not be the first person to ask these questions and they should be able to recommend a solution. If they don’t want to lend you money they could put you in touch with a suitable lender and advise you how to go about obtaining a loan.

Question: Can combining credit cards (NOT Debt Consolidation) hurt your credit score?
I have several credit cards, many from the same institution. I’d like to combine all the ones from the same institution into one.

All the cards are paid off monthly – I am not carrying any debt. Will this hurt my score?

Answer: Closing them will pull your score down a few points. Less Available unused credit.

Question: What is a good debt consolidation company that will negotiate your debts down and then give you a loan?

Answer: I, too, have felt the “pinch” of debt exceeding income. I searched the Internet for a reputable Debt Consolidation solution. After weighing the options of several, I settled on Credit Exchange. Their representatives had a genuine empathy with my situation, and came up with an excellent plan for me. This is not a loan. They negotiate with creditors to reduce the amount of debt owed. My monthly payments were reduced by 60+%. You will also be represented by a law firm that specializes in these matters. I have been in this program for one year now, and it has made a dramatic change in my budget woes.

Question: Is Debt Consolidation a good thing for my credit score or will it damage it ?
Being a recent grad and not in my preferred area of employment is rough, as it is for many recent grads. My dilemma is my finances. My poor financial decisions (i.e. CREDIT CARD DEBT) in college has caught up with me and it is racking my brain. I have considered debt consolidation because of the seemingly positive benefits of reducing my payments and paying just one bill…BUT is it too good to be true? It seems that there are quite a few debt consolidation businesses popping up and that is cause enough to sit up and really ask what’s really going on.

Answer: Don’t go there. Call your credit card company and negotiate the interest rate. They will usually work with you and drop it way down as low as 6 percent if you are tough about it. Then pay off as soon as possible. Other wise you got a snow ball that will roll up bigger and bigger. Just use the rule of 72, what you do is divide the interest rate by 72. If it is 12 percent then 72/12 equals 6 and your debt doubles in six years. That means you got to get the interest rate down and pay it off with a dead line.

Question: What is the best debt consolidation company?
I know there is a lot of companies out there so i just want to find the right company. Can anybody recommend any specific company?

Answer: Actually quite the contrary, Debt consolidation companies, or at least the really good ones, know exactly what areas to focus on in order to help repair your credit, help you lower your credit, and teach you better financial moves so you can stay out of debt.

I would contact www.debt-meltdown.com for the best debt solutions. My friend recommended them to me and they helped lower my monthly payments and my total debt. This economy favors those in debt as creditors are willing to take lower amounts if they can be paid in a relatively shorter time. Contact them and let them know your situation, they will assist you however possible.

Question: How do I choose a reliable debt consolidation or debt counseling organization?
You hear of so many scams out there. How do you know a reputable organization when you see therm? What are are the best options? A company with a Christian foundation is preferred.

Answer: Beware. Even if one says they are “Christian” doesn’t mean that they won’t rip you off. In fact many scammers use that to get people.

Question: What are the cons of using a debt consolidation/credit counseling service?
Do these services negatively effect your credit? If so, for how long? Are there any major pros to these services?

Answer: Many agencies (mortgage companies) view debt consolidation no differently than a CHP 13 Bankruptcy.

I have heard some horror stories from clients who try using debt consolidation companies and the companies who they are working with make a mistake or miss a payment on behalf of the borrower. Ultimately your credit is *your* responsibility.

Paying off smaller debts to take on one larger debt can also negatively affect you. If you open up a new account that can drop your months reporting average. Small balances affect your credit less negatively than one large balance.

Negative items on your credit report typically only affect you for 24 months. Every 6 months your score is affected 25% less until 24 months (100%) is reached.

When you are deciding on what to do about runaway monthly debt, you should consider talking to a debt consolidation company. This kind of organizations know how to take the products they have available, and make them work for you in your situation. However, some people also wonder if maybe they could deal with their creditors themselves and save the step of going through the debt expert middleman. Sometimes getting involved in things you do not completely understand can do long term damage to your credit report.

When you contact your creditors directly to try and discuss changing or altering your account, they make a record of that discussion. If you decide to try and ask them to make any moves on your account such as lowering your interest rate of requesting a lower payoff amount, that kind of information gets sent directly to your credit report and has a negative impact. It is best to know exactly what you are doing when you start dealing directly with your creditors.

On the hand, debt services know your creditors, and they know how your creditors do business. So your debt associate covers both sides of the equation; they know what to do, and they know who to talk to. Your credit counselor also knows when it is necessary to speak to your creditors, or when your financial goals can be reached without having that credit changing conversation.

It is a delicate balance that your debt representative works with, and they have spent many years perfecting the art of using that balance to your advantage.

By the way, by researching and comparing the best debt consolidation companies in the market, you will be able to determine the one that meet your specific financial situation, plus the cheaper interest rates offered. Nonetheless, it is advisable going with a trusted and reputable debt counselor before making any decision, this way you will save time through specialized advise coming from a seasoned debt advisor and money by getting better results in a shorter span of time.

Hector Milla runs the Best Debt Consolidation Company website – where you can see his best rated debt consolidation company recommendation.

Visit for further information and read our full review of the best debt consolidation service, plus articles and video training about how to get the most of your debt consolidation process.

Debt Consolidation FAQ:

Question: What are your chances of getting additional credit while still in debt consolidation?
In a debt consolidation program is it likely that you will be able to obtain additional credit?

Answer: If you have been consistent with payments for 6 months or longer and have steady job earning enough income, your chances are good.

It also depends on how much credit you are paying down. Get a copy of your credit report and check your credit score before you apply.

Question: Does debt consolidation work?
I am seriously considering debt consolidation, really need to get out from under loads of late fees and the companies just keep raising the interest rates, and I can’t see any other way out. Has anyone had experience with consolidating their debts? Good, bad, any opinion at all, will help.

Answer: I went to MMI (Money Management International) and worked out a debt management plan. It was working out just fine for me. …but 9 months later my employer had a pretty good sized layoff and cut hours for the rest of the staff. In my case I lost out on 6 hours overtime each week. That loss seriously hurt me financially. I continued struggling with the DMP but after about 4 months of that I was starting to worry that my car was going to get repo’d so I finally broke down and filed a Ch 13. Once its paid off I have NO intention of getting myself into another “financial pickle” like this.
Anyway, under a DMP you pay the agency a certain amount each month and they disperse it to all your creditors. Your creditors are not allowed to contact you after they have agreed to participate. ..and just like a Ch 13 you are not allowed to have credit cards or finance anything. If you do your creditors can and probably will drop out of the plan demanding immediate payment in full

Question: What debt reduction /consolidation agency that will give high discount to help pay off credit card debts?
I need help with paying off my credit card debts. There are so many debt reduction /consolidation agencies that I don’t know which one is good/authentic and will give the best rate (discount). For those who had gone through this experience, please advise. Thanks.

Answer: I wouldn’t use any of them they are rip off artists. They take your money and do nothing, been there done that. Go to Consumer Counseling, in every city or county, it is free, non profit and they don’t charge but they will contact all the places you owe money to and get you with lower payments and great ways of getting out of debt !! They are well known by all companies and acknowledge Consumer Credit Counseling as serious and good to work with.

Question: Is finding a debt consolidation specialist a good idea or a waste of money?
I have 14k in debt from 4 different sources and just wondering if debt consolidation is a good route to take

Answer: Debt consolidation will not only lower your monthly payments, but will reduce your interest rate so that you pay less in the long run. Some debt management firms will not think twice about ruining your credit while making payment arrangements, but if you select a reputable company that deals with not-for-profit credit counseling agencies you can’t go wrong.

Question: Does debt consolidation hurt your credit?
My husband and I have been thinking about trying debt consolidation but we want to be able to purchase a house as soon as all the debt is paid. Will it hurt our credit score so we couldn’t purchase a house? Does it affect credit scores at all?

Answer: It can. First of all be sure you don’t go through one of those credit counseling services if your goal is to buy a house, that can really lower your score, some even compare that to bankruptcy b/c your essentially telling creditors that you can’t handle it on your own. By applying for a debt consolidation loan you could actually lose a few points on your score. All your really doing is shifting the amounts you owe. Your best bet is to: 1. Make sure you ALWAYS pay on time. Most mortgage lenders like at least one to two years of on time payments. 2. Try and get your debts paid down by 50%.

All in all it shouldn’t hurt you that bad, but it’s somewhat better to pay those little ones down instead. Once you do get them paid down, be sure you don’t close that account. That too will make your score drop (b/c your increasing your balance to limit ratio). One more thing, all your debts don’t have to be paid off in order for you to get a house. Interest rates are great right now!

Question: Bankruptcy vs. debt consolidation service – which is better – I just lost my job of 11 years?
I was just laid off and am thinking about filing bankruptcy on my approx. $17,000 credit bills debt and let my home foreclose @approx. $75,000 owed OR do a debt consolidation service on the $17,000 with out my home and just see what happens. I am scared as there are no jobs in Michigan making near what I made before being laid off. Please help!

Answer: You have more options than these, and to be honest these are two of the worst you can do.

Let’s look at debt consolidation first. You MAY be able to get a lower interest rate by consolidating your debt, but you must understand that your debt now transforms from an UNSECURED loan to a SECURED loan. What does this mean? This is important because a secured loan means your personal property is now on the line and if you miss any future payments, the creditor could simply take your car, your house, or anything else you have of value. NOT a good situation to be in.

How about bankruptcy. Well, this really should be an option of absolute absolute last resort. Bankruptcy can stay on your credit report for up to 10 years. This means that for the next 10 years, you will have problems getting new loans for everything including cars, credit cards, homes etc.

Well what are your other options? Many Americans don’t know this, but by law you can contest your debt and have it significantly reduced. The catch is, you have to do it the right way and need the experience on how to deal with the creditors. There are a few companies that really know what they are doing when it comes to this, and can reduce more than half of what you would normally pay.

Question: Question about bankruptcy and debt consolidation?
Ok I am going through a separation with my wife and we bought a vehicle together,but its under my name and i can’t afford it plus all my other bills put together by myself. I am close to 30,000 in debt. I would like to do a consolidation before bankruptcy but does anyone have an idea how low my debt consolidation payments would be? or should i file bankruptcy?

Answer: Call all of them and work out a payment plan and try to get your interest lowered or stopped.

Then, make the minimum payments on every one of them. On the lowest dollar value, put all your extra effort toward paying it off. Once it is paid off, then roll that extra money to the next largest balance. Continue this snowball until all your debts are paid off.

You probably need to cut your expenses back to the bare minimum. Get rid of cable, cell phones, internet, etc. Lower your electric bill, gas bill, water bill, etc. Don’t eat at a restaurant until your debts are under control. Take a sandwich for lunch. Cancel the gym membership.

Try to increase your income by getting a second job. If you have a car with payments, get rid of it, and buy a good dependable used car for CASH.

Go to the library and get “The Total Money Makeover”. Read it and follow it carefully.

Question: Which is the better option in regards to reducing debt: debt consolidation or debt settlement (negotiation)?
There has been considerable debate between two specific debt reducing options: debt consolidation and debt settlement (negotiation). I’m trying to decide which is the best option to select if one wants to reduce their financial debt (specifically credit card debt). I’m sure there’s pros and cons to both options, however which is more effective?

Answer: Debt consolidation can be a trap if you use your home equity to pay off credit cards. That is one reason why so many homeowners are finding themselves in foreclosure these days.

Debt settlement is a better option for most people.

Both are equally effective – the question is what do they leave in their aftermath? Debt consolidation can be expensive and lead to a situation where your home is not worth what you owe on it. Debt settlement can leave you with less than perfect credit, but that can be fixed over time.

I would be more concerned about the “side-effects” of either situation.

One way you could manage your budget is to take your high interest rate credit card bills and decide that you are going to pay them all off one at a time. So you set them to the side, and you start to figure out how much of your extra money each month you can apply to paying down your credit card bills. Once you have moved your income around, you quickly realize that there is not a whole lot of extra money to apply to paying off your debt. In the end it may wind up being a futile exercise by trying to pay off your high interest rate credit card bills on your own.

Your other option is debt consolidation. With debt consolidation you will take all of your high interest rate credit card debt and put it under one low interest rate loan payment. A debt expert will help you eliminate all of the high service charges you were paying every month and replace them with one low loan service charge.

A debt consolidation company will help you remove hundreds of dollars a month from your monthly obligations, and create an extra cash flow to help you pay off your other bills or purchase the items you need during the month in cash. You will then have all of your high interest rate credit card debt in one low monthly payment that you can choose to pay off at an accelerated pace, or you can choose to make your scheduled payments each month for the life of the loan. The choice is entirely yours.

It looks like the smart choice then, and probably the most reliable method for managing debt because you can even rebuild your credit during the process, so the first step is to do some research, then contact a debt consolidation group and make an appointment.

By the way, by researching and comparing the best debt consolidation companies in the market, you will be able to determine the one that meet your specific financial situation, plus the cheaper interest rates offered. Nonetheless, it is advisable going with a trusted and reputable debt counselor before making any decision, this way you will save time through specialized advise coming from a seasoned debt advisor and money by getting better results in a shorter span of time.

Hector Milla runs the Best Debt Consolidation Company website – where you can see his best rated debt consolidation company recommendation.

Visit for further information and read our full review of the best debt consolidation service, plus articles and video training about how to get the most of your debt consolidation process.

Debt Consolidation FAQ:

Question: Will a “Debt Consolidation ” company also help with Ed fund student loans that are now defaulted?
I am considering looking into debt consolidation. My student loans are being garnished by ed fund from my wages. they have also just taken my Ca state income tax check. If I do debt consolidation, will they be able to stop my wages from being garnished?

Answer: No. This is a last resort by the government to get their money after all other options have been exhausted. You already have a long history of non payment so they won’t be able to stop your wages from being garnished or your income tax returns from being seized. Student loan debt can’t be grouped into any other debts you might have by the way.

Question: Will applying for (and receiving) a debt-consolidation loan damage my credit?
I have numerous debts (car payments, student loans, a few credit cards, and a significant personal debt owed to a friend) that I’d like to roll into one monthly payment (which would hopefully be smaller than the amount I currently pay for each one as a separate monthly bill).

Some people have advised me to apply for a debt-consolidation loan. My question is, will doing so affect my credit negatively? Do they even include student loans in debt-consolidation?

Answer: A debt-consolidation loan is just a fancy word for a “new” loan at the same banks you borrowed from before. It doesn’t hurt your credit because the amount owed has not increased.
A debt-consolidation “service” tries to charge you $1,000 to get lenders to reduce your debts. You make one payment each month to the “service” and they pay everyone you owe. This is an area of business which is 99% scammers so you need to avoid them.

Question: Which is the best debt consolidation agency to join that offers very low interest rate debt consolidation?
I’m searching for the name of a debt consolidation company that offers the very lowest interest rate for debt consolidation out of all the competitors. please does anyone know out of their own experience?

Answer: Talk to your local bank or credit union. Their interest rates are going to be much much much lower than what any “debt consolidation” company is going to charge you.

Question: I went with a debt consolidation company and still received a summons from a creditors. WHY??
The creditors were all given letters saying to work with this firm and I’m paying them monthly to work toward my debt. But I received this summons anyways. Can they still garnish my wages over and above what I am paying the consolidation company? I have no wiggle room in my budget.

Answer: Most creditors, especially credit card companies, will not work with debt consolidation companies. They will only work with attorneys. The debt consolidation company should have told you that your creditors could still file suit.

Wage garnishment can happen only after the plaintiff wins and gets a judgment.

You need to fire the debt consolidation company, get a 100% refund and hire an attorney who has experience handling consumer debt issues. You can get a referral from your local county bar association.

Question: What is better bankruptcy or debt consolidation?
I have very high unsecured debt. I can’t keep up the minimum payments. would debt consolidation be the way to go, or should I declare bankruptcy.Which would hurt me more in the long run?

Answer: Check this site for a Consumer Credit Counseling Service in your area: http://www.nfcc.org/ These are legit non-profit companies who can review your finances and advise you how to proceed. They have debt management programs available, if you qualify.

A debt management program will adversely affect your credit initially, almost the same as bankruptcy. However, when you complete the program, you will have a good payment history and won’t suffer the stigma of bankruptcy showing on your credit file for 10 years.

Debt consolidation isn’t a good idea. Shifting your credit card debt to another loan only allows you to run those credit cards back up and you end up in a worse position.

Question: When using debt consolidation can I include my sister’s debt, since I’m paying her bills as well?
She’s out of work, and she needs help as well as I do. Right now I’m paying for all the bills.

Answer: It depends on what you mean by debt consolidation. If you are getting a HELOC or other loan to consolidate your debt then it depends on if you qualify to borrow enough. If you are working with a debt consolidation company then you need to ask them what their policy is as well as what the law allows.

Question: Should I use a debt consolidation company?
I have a $501 debt I owe to Directv from 2005. I would like to settle with Directv and pay at least half if not less. My question is would it be in my best interest to speak directly with Directv’s collection dept. or go with the debt consolidation route?

Answer: For that small of a balance, you really should just handle it yourself. It won’t be worth the fees or time of enrolling in a debt program. You should offer them 50% of the balance and see if they will agree to report it as settled in full.

Question: Any idea for debt consolidation up to 10 years?
I have over $88K in credit cards. I went to debt consolidation program and my FICO score went high. My only problem, payment is based on 5 years so my monthly payment is high. Does anyone know if someone can do debt consolidation payments for 10 years? I don’t have any equity in my home to refinance.

Answer: There are U.S. federal regulations that restrict most debt management plans to 60 months, however, some lenders and some credit counseling agencies are experimenting with “less than full balance” plans that permit you to pay off 60% of your debt in 5 years. Ask your counselor if you qualify.

Millions of people are facing foreclosures, financial hardships and are into heavy debts. They are left with no option other than filing bankruptcy or going for debt consolidation. Bankruptcy is thought to be the best measure to cure the problems by the people. But, this is alarm you that, do not just go for the process and blindly and know the harmful effects of the process over debt consolidation before you decide for yourself. It is advised that one should go for debt consolidation in order to get rid of the debt.

Here are the benefits of debt consolidation and why one should avoid filing bankruptcy:

1. The first reason is the cost involved in the process. You want to file for bankruptcy as you are not in a condition to repay, but what about the cost that you will have to pay the entire process? It always sounds easy, but actually there is a lot of hidden cost involved in the process and you will have to pay for every other thing. On the other hand, debt consolidation comes free and even if there is any cost related to it, it is very low. One can easily go for that with the help of his or her lender.

2. Second reason why it is better option is that, it does not stay in your credit report. Once you complete the process, your credit report will start improving. In case of bankruptcy, it stays for 7 years on your credit report and sometimes its permanent and leaves a black mark in your credit report. Debt consolidation does not affect your credit report in a wrong way.

3. You will not be able to get any credit facility in future if your report has a mark of bankruptcy. Even if you get one somehow, the interest rate charged will be very high and the amount would be low. With debt consolidation, your credit keeps on improving and you can apply for any loan or credit card facility without any tension.

These are the reasons why one shall go for debt consolidation and not bankruptcy.

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Debt Consolidation FAQ:

Question: What is a good, legit, debt consolidation/management company?
Yes there are a lot of people like me who get in way over their heads in debt. I was looking into debt consolidation companies on the web, but how do you know if they really are the right company to go to? They can say they belong to the Better Business Bureau, but is that for real? I would love 1 good, solid recommendation! Thanks for your help!

Answer: I used CCCS (Consumer Credit Counseling Service) in college and it was great. All but one of my credit card companies dropped their interest rate to zero. The one card that didn’t drop to zero dropped their rate from 21% to 12%. I had everything paid off in about 2 years. Your time to have everything paid off will depend on how much you owe and how your creditors adjust their rates for you. Good luck!

Question: Debt consolidation plan and paying extra?
I just started a debt consolidation plan. I had to because I am having a baby in March and need to be able to save some money before she arrives rather than stressing over credit card payments, fees, etc. I have already resigned to the fact that my credit will be in the toilet for awhile.

My question is, am I able to pay extra in the months where I have extra? Do I send it to the debt place or to the credit card companies individually?

Answer: As you have consolidated all of your debts I assume you now have only one debt? Having only one debt means you only have one lender. Contact your lender and ask them their terms for making over payments on your debt. You may find there are penalties so check first. All companies are different so I don’t think anyone can give a true answer. Best of luck.

Question: Looking For The Best Debt Consolidation Loan?
I so want out of my debt, and I’ve been searching online for a really good debt consolidation program, but I’m just so afraid and I don’t know what to do. What bothers me the most is the fact that I might have to spend a lot of money on interest fees. I’m irritated.

Answer: Consolidation is a great way to make it easier for you to maintain debt. You can consolidate with a consolidation company or by yourself with different and new credit cards. The consolidation companies are usually expensive and have really ugly rates, but make the minimum payments low, so that you feel like you’re prudent. I recommend a technique in the book called credit arbitrage (technique #10) as a way to consolidate and really save money. It’ll take a little more initiative on your part, but you’ll save a lot of money!

Question: I have a $6,000 credit card debt. I want to pay it off, is consolidation an option?
I am a college student. I graduate this July and I want to start paying off all my debt. I need to know what other options I have besides trying to settle with the collection companies because they ask to either pay it off or they require a big chuck of money then monthly payments and I cant quite do that just yet. Although I do want to pay it off as soon as possible. Would you recommend debt consolidation or do you know of any other options?

Answer: Generally, debt consolidation does not really save you money. Without knowing what your other debts are, what will probably happen with debt consolidation is that you will be extending the time period to pay off all of your debts. So, your savings may be in monthly payments, but over the length of the pay off, you’ll pay more in interest.

Question: Is debt consolidation like filing bankruptcy? Does it ruin your credit?
Is debt consolidation like filing bankruptcy? Does it ruin your credit? Does it cost anything out of pocket to start consolidating? Any good companies that you suggest?

Answer: Depends on what you mean by “debt consolidation”.
If you are looking for one big loan from a bank to roll all or your debt into. It will not be like filing bankruptcy. It just means that you took out another loan.

If you are talking about using some company to consolidate and take care of paying your debt. Then Yes it will. What these rip off companies do is not pay your creditors for months and then try and settle for less. No special skills. They just don’t pay. If that is the route that you must take. You can do it yourself and save the fees they charge.

Also, your creditors do not have to deal with these people because it is your debt. You, and you alone are still responsible for the debt. If they don’t pay your creditors, your creditors will sue you and not the company you hired.

Question: Debt consolidation through a credit union?
I’ve got two credit cards that are maxed out and can’t seem to make ANY progress by paying the minimum payment when I can. It’s to the point now where I’ll go a month without paying them and I just start racking up bullsh*t fees which put me even further into debt. I need to get help with this and I heard you can do debt consolidation through a credit union. I’m wondering if anyone here has done this and what their experience has been? Will it drastically effect my credit score? Do I have to have an account at the credit union to do this?

Answer: Credit unions do offer much better rates than banks or credit cards but to be approved for a loan you will have to be a member. Since you stated that you have missed some payments on your credit cards, most likely your credit has suffered. This will most likely require some kind of collateral before any credit union will approve this type of loan.

As far as your score is concerned, if you get approved for this loan all you are really doing is shifting debt from one place to the other so there should be no real impact on your score.

All I can say about the fees is you did read the terms and conditions before you signed the contract right?

Question: Has Anyone Had any bad experiences with Debt Consolidation or Check Cashing Places?
Recently I used a debt consolidation company. Its been a year now and besides their 39.00 fee each month, my debt is down by 7000.00 dollars, a situation I was never able to resolve on my own. I also recently used a check to cash company and it was so very easy. I paid it off and that was that. This could not be all there is too it. I wanted to know if anybody had any bad experiences so I can pass it on and prevent someone from getting into trouble.

Answer: I ran into financial trouble a while back and relied solely on check cashing places. There are 3 companies in my city that offer payday advances and I would get one to pay off the other. Fortunately times have changed. These places are there only for short term emergencies and not long term financial problems. I would suggest staying away from such places unless you desperately need the money for food or rent. If you get a payday advance just to go out or not be late on a payment you will get hit hard at the end of the 2week grace period because you will begin getting used to depending on these places that you will have a hard time getting out.

Make sure you close your accounts before you rack them up with debt again.

Question: If you don’t have a home or any assets how can you qualify for debt consolidation?
What amount of debt qualifies for consolidation?

Answer: Debt consolidation is to place all your debts together to consolidate them and get them paid off in a smaller sum than you are paying now to different accounts. Usually it helps to place them all together and lower the interest and monthly payments. The bank lumps all payments into one lump sum and you pay only one bill each month. That has nothing to do with owning anything. If you have some kind of income, you can pay.

The Consumer Debt Trap
A recent survey determined the average American family has consumer debt balances of over $10,000. Once a debtor gets into the position of carrying credit card balances over from month to month it becomes very difficult to pay the balance down to zero because of high interest finance charges and carrying fees.

Utilizing Home Equity Consolidation to Lower Debts
There are many uses of a home equity loan. Many home owners borrow against their equity for home improvements, college tuition, even vacations. The loan money can be used for virtually anything. One of the best uses for the loan is to pay off high interest credit card and other consumer debt.

Benefits of an Equity Debt Consolidation Loan
One strategy for getting credit card debt paid off is applying for a real estate equity consolidation loan. This approach will not miraculously remove debt however the loan will allow the debt to be paid off with lower monthly debt payments. Credit card interest rates charged on unpaid balances are high and getting higher. Additionally, these rates most often fluctuate with the prime bank rate making it impossible to work out a longer range budget to pay the balance off. Once consolidated into a home equity loan the payment and interest rate can be fixed. Also, there will be an immediate positive impact on monthly cash flow as the one new equity loan payment will be lower than the combined payments of the debt paid off. With only one debt payment one can plan to be debt free in a few years.

The Disadvantages of Home Equity Loans
Home equity consolidation can be very useful. However, it is always important to use loans prudently and borrow only what can comfortably be paid back. All loans create another monthly bill to pay. If the funds are used to pay off credit card balances then discontinuing credit purchases to avoid piling up more debt is mandatory. Increasing total debt by not curtailing charges on credit will create a deeper and more serious financial crisis. If a home equity loan used for debt consolidation results in financial over-extension then the consequences could very well end up in foreclosure because now the debt is collateralized whereas consumer debt is not.

Also, there are other disadvantages one should be aware of. First of all, although the interest rate charges are lower than the debt paid off with the loan, the term of the loan is generally for years – much longer than someone who could pay off consumer debt without a loan would carry a balance. This means there will be many more debt payments with interest on each payment adding up to more total interest than if the debtor just “tightened the belt” and paid off their consumer and card debt within months rather than years.

So if the new home equity consolidation loan monthly payment is within the budget, has lower interest rate finance charges and still does not leverage the home more than 80% accounting for all mortgage debt, this debt consolidation strategy can be a good way to refinance high interest credit card and consumer debt.

For a free ten part course on debt management or for more information on home equity consolidation visit debhelptools.com

Home Equity Consolidation FAQ:

Question: Is it better to us a Consolidation company or to use a home equity loan to pay off debt?
I am in a little over $45,000 credit card debt. I am trying to figure out if it would be better for me to use a consolidation company or to get a home equity loan.

Answer: It Depends on a few factors:

1. Equity in your Home
2. Rate on Equity
3. If the Loan is Tax Deductible -
4. If you can afford the payment

If you have More than 10% Equity in your Home, Good Credit and you used the 45K on Home Improvement and you can afford the payment consolidate with a Home Equity Loan.

Question: I want to refinance my home for a debt consolidation new loan. Which are my best options?
I have about 40 % positive home equity , no late payments , but I only have been owning the house for a couple months. My house is in California and I have a fair to good credit with too many inquiries in the last 6 months.

Answer: If you refinance it’s going to cost you. I refinanced to get a lower rate and they ended up charging me about 3 thousand dollars and i didn’t realize it because they rolled it into the payment .The best thing to do is just get a line of credit against your home . I went to a credit union and I got a line of credit with a fixed rate of 6.9 . look into it .What ever you do good luck.

Question: Whats better in this economy, getting a home equity loan, or just refinancing. For debt consolidation only.

Answer: It is extremely dangerous to load your home with extra debt. You already have difficulty in paying your bills and to put your home in jeopardy is not wise. That is why so many foreclosures are occurring. But if this is the only way then a home equity with a shorter time frame, this way all your extra payments are not going for interest. and you will be debt free quicker.

Question: If i take out a home equity loan now will this loan affect me if i want to refinance my mortgage.?
I have 24 years left on 30 year mortgage. I am thinking about a home equity loan at a favorable rate, rather than roll in to refinance consolidation. If rates are favorable later this year i may like to refinance 1st mortgage at 15 years. Will home equity loan affect my refinancing even if i am not looking for any cash out.

Answer: Right now rates are LOW, I would just refi instead of the HELOC that might cost you 7% on up. Why pay for 2 transactions.

Question: How do you know how much equity you have in your home?
We’ve owned a home for a year now and received a flyer from our bank about applying for a home equity loan. we want to apply so that we can possibly do a little debt consolidation (just a few thousand in student loans and credit cards) but how do you determine if/how much equity you have?

Answer: Fair market value – current mortgage(s) balance = equity.

Some things you may not have thought about for home equity loans. The percent of equity you borrow will change the risk for the lender and therefore the cost of the loan for you. What I mean is, if you borrow the very last penny of equity it will be more expensive for you (a higher rate). If you have significant equity (which would only be if you put down a lot of money) then the loan wouldn’t be as expensive. It really can make a difference in the interest rate.

Question: Are there any debt consolidation companies out there that would pay off home equity lines of credit?

Answer: Try citi home equity they will provide you the best deal on consolidating your loans

Question: Is it wise to pay off credit card debt with a home equity loan?
Is there a better option? My credit union is offering a consolidation loan and telling me that the average in our area is about 13.87 percent.

Answer: Credit Unions don’t offer home equity loans. I think they are offering you a basic loan and calling it a “consolidation” loan. The interest rate is very high in my opinion. Go to the bank/mortgage company who holds your mortgage and get a quote from them.

A home equity loan (in my opinion) is much better then a consolidation loan because the interest rate should be cheaper, and it’s tax deductible. Over the past few years home equity and consolidation loans have been heavily advertised as a quick way to get out of debt. That’s a lie! You are simply shuffling around your debt, and spreading it over several more years.

Question: Is this home equity loan outrageous?
We are being offered a $20,000 bill consolidation loan from CitiBank, at 12% interest. The loan is for 20 years, with a monthly pmt. of $300. I thought that was ridiculous! If it was a $20K car, I’d probably have the same payment but for only 5 years. Twenty years?? Insane! Are all the banks this greedy?

Answer: You are paying interest only. And that payments sounds about right.. but still.. ridiculous. Lenders are not the ones that make the interest rates.. the Fed is. And they have lowered the interest rates significantly in the past 6 months.