It’s not uncommon to hear tales of people losing their homes and other property in today’s economy. The last few years have seen many more bankruptcies. Before anyone is allowed to enter into bankruptcy today (in the United States), they have to go through the process of debt counseling. This often involves debt credit card consolidation.
The premise behind debt credit card consolidation is to take a number of debts, including credit cards and working with lenders to consolidate payments. You can work with lenders on your own to reduce interest rates and consolidate payments, but often you must have a single loan written to do so. This requires working with a lender or debt credit card consolidation firm to create the new loan.
Often, you are required to secure the debt with equity in your home. This is not a good idea because if you default on the loan, you can lose your house.
It’s better to work with a reputable financial counselor when looking at debt credit card consolidation. The financial counselor will help you uncover the real debt management problems that got you in the situation you are currently in. He or she may advise credit card debt consolidation as an overall money management strategy. This strategy typically includes negotiating with your credit card companies to reduce interest and set up a payment plan that works with your budget.
When you start a debt credit card consolidation plan, it’s important that you don’t use your credit cards or get new ones. You also need to watch your spending in other areas of your life. It’s impossible to get out of debt when you are spending beyond what you earn. This is the most common reason people look into debt credit card consolidation.
Where can you find a reputable credit counselor or financial advisor who specializes in debt credit card consolidation? You can find firms on the internet, but be wary of the company until you check them out with the Better Business Bureau. Check into their fees and their references before you sign any agreements. Also, be sure to check with several firms before picking a debt credit card consolidation advisor.