In a lackluster job market many people find themselves unemployed or underemployed often making far less money than when the started accumulating a lot of debt and need debt relief consolidation. Now that the income has shrunk and they are seeking some sort of debt relief consolidation may seem like a logical way out of their current dilemma. In the past, many companies offered their services to consolidate people’s debt into one monthly payment, usually less than combined payments, but a few bad apples made a mockery out of debt relief consolidation and have faced charges of bilking money from people who could least afford to lose.
The concept of consolidating a person’s debt is not new and has been used by many people to help them avoid bankruptcy and face the loss of their home, their car and more importantly their self-esteem. With debt relief consolidation, all of the person’s individual debts are consolidated into one loan and a monthly payment is made on that loan until the debt is resolved.
Some companies, instead of offering loans, will contact lenders and negotiate for lower balances on the owed debt and then accept a payment from the debtor and make small payments to each creditor. In this type of debt relief consolidation, the individual accounts remain open and if the debtor opts out of the plan, in most cases, the balances revert back to their original amounts.
Some of these companies have met with consumers and promised them all sorts of ways to get them out of debt. Typically, the debt relief consolidation service required an upfront administrative fee to get the ball rolling on their case and with promises of low down payments, people handed over their cash. It was not until their creditors continued to call them and tell them they have not received any money that the consumers became suspicious. Attempting to reach the company they may have found they went out of business and left town with their money.
When looking for a debt relief consolidation company, check with the local Better Business Bureau about any possible complaints against them and also check with the state Attorney General for any known problems. Also, when meeting with someone to discuss debt relief consolidation always make sure the fees and any administrative charges you have to pay are identified and spelled out in the contract. The fees could end up costing more than paying off the debt on your own.
June 29th, 2008 at 5:44 pm
Hello! Last year I was in debt with credit card debt and an expensive mortgage, and am now recovering from it. It was the best move I made when I did a debt consolidation loan. The rates are much better now and I will be out of debt by the end of this year.
The most important thing is to go for professional advice, if you think you can get out of it by your own it may not be the best idea.
Nice article!