There
are Many Choices for Debt and Bill Consolidation
Consolidating
debts and bills can be helpful to a grim financial situation. Debt and bill consolidation
is one of the best options for individuals who want to eliminate their debt in
a timely fashion, and allows debtors to pay back at lower interest rates, which
saves them more money. The debt consolidation process can offer relief to many
consumers, and will can even help them rebuild their credit status. Bill consolidation
can help individuals pay off medical bills, credit cards, and many other bills.
Consolidating bills and debt are a temporary solution to debt problems, but it
cannot eliminate bills every month. However, debt and bill consolidation can greatly
reduce the amount of money that is paid to these creditors each month. The various
debts and bills will be combined together into one monthly payment, or overall
debt.
Some customers can help their own situation by evaluating their budget,
and finding ways to cut costs, and find a way to work with the new monthly payment
to avoid a recurrence of the bad situation. Customers will be able to practice
the money management skills taught by their debt counselor. It seems that debt
and bill consolidation is especially effective for credit card debt. Individuals
with credit card debt may apply for a debt settlement service to help reduce their
debt. Credit card debts are a common occurrence because of the high interest charges,
late fees, and collector harassment. Debt settlement has a qualification process
before clients can receive any services from the companies. The settlement services
are used to help consumers with unsecured debts, including credit card debt, medical
bills, personal loans, and department store cards.
Individuals with secured
debts will not qualify for settlement programs for debt and bill consolidation,
because secured loans involve collateral, which means once the person is default
on the loan the collateral is taken as payment. This means that the secured debt
is repaid with the collateral that is taken by the creditor. Qualifying for debt
settlement also requires the individual to have at least $5,000 in unsecured debt
for the debt and bill consolidation plan. The qualification process requires proof
of at least two unsecured debts and proof of household income, usually in the
form of a paycheck stub. Once the debtor is signed up for the consolidation program,
the creditors will be notified to send all debt information to the settlement
service.
Next, a company representative will negotiate with creditors to
reduce the amount of money that is owed to each company.
Non profit consolidation
companies are also in abundance and offer free debt and bill consolidation counseling.
These companies should provide a settlement offer in writing before any payments
are made toward the debt. Clients also have the choice of asking for the elimination
of interest, and the cessation of late payments, which can add to a debt, and
eliminating these elements can save the client more money. Debt consolidation
agencies can also be used to help consumers remove bad debts from the credit bureau
files.