Debt Consolidators Can Help
Too much debt has become almost a way of life, from governments down to individuals. Unfortunately, while governments can get away with deficit spending indefinitely, individuals cannot. At some point, the overextended debtor has to look for a way out, and none of the choices is pretty. Ignoring the situation simply compounds the debt with late fees and higher interest rates; bankruptcy ruins credit for several years; selling property to pay off debt can be heart wrenching. Debt consolidation, while not a joyous experience, can often be the least painful path to eliminating debt.
Debt consolidators are in the business of helping people become debt-free in as little time as possible. To this end, they will perform a variety of services in the process.
- They assist the debtor in determining which debt should be consolidated, the total amount of debt involved, and the average interest rate currently being paid. This important first step allows the debtor to see exactly how much is being charged for the debt and how long it would take to eliminate the debt by traditional means of small payments each month.
- Debt consolidators, if experienced, will begin the negotiation process with the creditors. This is a major burden lifted from the debtor, who often does not know how to "climb the chain" through customer service to get to decision-makers and then to practice the skills and art of successful negotiation, often including reduction of interest rates and/or reduction in the total debt itself.
- Once the negotiations are complete, it is the consolidator's job to determine the method of payment. This may mean that the debtor makes a lower monthly payment to the consolidator who, in turn, pays the creditors. It may mean the consolidator secures a new loan for the debtor, paying off all creditors, and the debtor then makes payments on this new loan at a lower interest rate and for a specified period of time.
- Good consolidation companies will provide follow-up advice to the debtor, developing a specific plan for maintaining a debt-free lifestyle. Usually, this involves destruction of most credit cards and the development of a budget within which the debtor can live.
Consolidators can achieve debt-free status for their clients. It is then up to the client to follow the budget and plan developed, so a "return visit" is never necessary.