Debt got you staying up nights? Or maybe you’re not answering the phone because you’re afraid it will be yet another debt collector calling to harass you? Or maybe you’re getting phone calls from collectors when you’re at work that just totally embarrasses you?
You don’t have to let debt rule your life
No matter how deep you are in credit card debt, there are solutions available. Many consumers choose to file for bankruptcy. This will eliminate all your credit card debts but can’t dismiss some of your other debts including student loan debts, past due alimony and child support and back taxes and fines. A chapter 7 bankruptcy (the most popular type) could also cost you some of your most treasured possessions. And it will stay in your credit report for 10 years, during which time you could have a very big problem getting any new credit.
The wrong way to consolidate credit card debt
Many people who have found themselves head over heels in debt have turned to debt consolidation as a way out. There are several ways to achieve this. First, you can get a debt consolidation loan. Second, you could go online and find a company that offers debt consolidation. Last but not least, you could go to a consumer credit counseling agency.
A debt consolidation loan
There are two types of debt consolidation loans – secured and unsecured. Most people who get one of these loans choose the secured type. This means an asset that serves as collateral secures them. In most cases the asset will be the person’s house and the loan will be in the form of either a second mortgage or what’s called a homeowner’s equity line of credit (HELOC). In either event, you will be risking your home because if you were to default on the loan, the lender could foreclose on it, and you’d literally be out in the street.
Consumer credit counseling
There are credit counseling agencies in almost every city and they usually provide their services free. If you choose to work with one of these agencies, you’ll be assigned a counselor who will review your spending and your budget. He or she will help you develop a payment plan and then negotiate with your creditors to get your interest rates reduced and your plan accepted. Once all your creditors sign off on your plan, your debts will have been consolidated in the sense that you’ll be required to send just one check a month to the credit counseling agency and it pays your creditors.
There are some other disadvantages to this type of debt consolidation. The biggest is that you will need to surrender all your credit cards. And if you miss a payment, you could be tossed out of the program and end up in worse shape than when you started.
Why both of these are bad ways to consolidate credit card debt
Both of these are ways to consolidate credit card debts because they do nothing to reduce it. They can make you feel as if you’ve done something about your debts but you really haven’t. You’ve just moved them around. And as the old saying goes, you can’t borrow your way out of debt.
The good way to consolidate credit card debts
There is at least one good way to consolidate credit card debts if you qualify and that’s through a debt settlement or debt negotiation program. The way this works is that you choose a company such as Debt Consolidation USA. Our debt relief providers will work with your credit card companies to reduce your debts as much as possible. Once they have negotiated the best possible settlements, you’ll be presented with a payment plan and will then have to send only one check a month to us. You’ll probably be completely out of debt in 24 to 48 months and while, your credit will take a hit it won’t be as severe as if you had declared bankruptcy.
Call our toll free number today or fill out the form below to start getting rid of your credit card debts. It’s just the right way to consolidate credit card debt.