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Archive for June, 2012

Why Consolidating Debt Is Paramount To Financial Freedon

By On June 15, 2012 Comments Off on Why Consolidating Debt Is Paramount To Financial Freedon

Why Consolidating Debt Is Paramount To Financial Freedon

Finding your way out of debt to Financial Freedom may seem overwhelming at the moment, but by following a few simple steps you can get overspending under control and walk away free. Generally if you have good to excellent credit the best alternative is to find offers to transfer your balances to other banks, locking in something at 0% APR is a proven way to get ahead of your debt problems, unfortunately these finance options may not be available to all consumers.

There are only a few choices when looking for solutions to credit card debt and simple interest debt. They are:
1. Debt settlement
2. Credit counseling
3. Refinancing debt consolidation
4. Arrange payment with credit card companies yourself

Debt cancellation is another term for bankruptcy. In a bankruptcy a lawyer is needed to file the petition and their fees typically run between $1000 and $2000. If you have over $10,000 in unsecured debt, which includes credit cards and simple interest loans, your lawyer can file and the entire amount will be eliminated. The problem with bankruptcies is that they remain on your record for seven years and your credit score will bottom out for that period. This option is for those who have no other option.

Debt consolidation is for those who can afford a payment and so your credit rating will not be affected. Typically with debt consolidation, the company will total your credit cards and loans, which also must add up to $10,000 or over. Here are two methods of debt consolidation.

• A credit counseling company will take your debt and contact each company to have the fees eliminated and lower the interest on each card. They offer financial education like how to make a budget and how to save, and the result is that you will make monthly payments for approximately five years or longer depending on the amount of your debt.

• A debt settlement company works differently. A settlement company actually contacts each credit card company and negotiates a pay off for the card. The credit card companies are eager to recoup some of their losses, so they accept a lower balance. The debt settlement company then totals your account, adds a fee, and the creditee makes monthly payments for three to five years, depending on the total.

Whichever type of credit consolidation that you choose to eliminate debt, the results are certain that with each payment you make you will be closer to your goal of $0 debt, and you will feel better and better. Debt is a heavy load to carry and consolidating it to pay it off opens the door to financial freedom and a happier tomorrow.