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(Also called Debt Management or Credit Counseling Option)

Debt Consolidation » Top Ten Debt Consolidation Questions (Not Sure)

Making important financial decisions about your future can be stressful. You are taking the right steps by educating yourself about your options. One helpful option for many people is a Debt Consolidation Plan. Below are the top 10 questions asked by people who are unsure if a Debt Consolidation Plan is the right choice for them. If you have other questions, or want to discuss your case in person, please contact our office (insert link) to schedule a FREE CONSULTATION. We can help you get back on track with your finances today.

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If you have a question not covered here, please feel free to call us at 1-800-505-8776

With a Debt Consolidation Plan (Also known as: Debt Management, Credit Counseling, Credit Card Consolidation), you pay back 100% of your debt with a large reduction in interest rates. Interest is commonly reduced by about half or more of what you are currently paying. You become free of debt in as little as 3 to 5 years. In Debt Settlement, you pay back an average of 30-50% of your total debt, including all debt settlement fees as well as accruing fees and interest. This 30-50% figure is based on your starting balances.

Debt Settlement's usual approach is for you to completely stop paying your creditors. This typically results in a judgment or garnishment. Imagine the effect that has on your credit report and scores! Beware of these types of companies as most of them have an "F" rating with the Better Business Bureau. The ONLY time Debt Settlement is a successful option is when you already have a lump sum of money available to you.

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A Debt Consolidation Plan can provide many benefits to consumers trying to regain their financial footing and stability. Upon enrollment in a Debt Consolidation Plan, the benefits may not be the same depending on who your creditors are, but each will afford you certain concessions that will make your debts easier to handle. Here are some of the benefits that may be available to you through a Debt Consolidation Plan:

A Single Monthly Payment: You will no longer have the trying task of paying separate bills each month. The credit card consolidation program combines all of your accounts into one monthly payment. The processing company will divide and disburse the funds to all your creditors. So, you don't need to make multiple payments to individual creditors at different rates of interest. Your payment due date, chosen by you, will be the day of the month that is most convenient for you.

Reduced Interest Rates: The current interest rates on your unsecured debts will be substantially reduced. This allows more of each monthly payment to be applied toward the principal balance instead of toward interest.

Re-aging Of Accounts: When an account is past due, or delinquent, creditors usually demand full payment of past due amounts to bring the account current. Re-aging the account marks the account current without payment of the delinquent amounts. This means that your account will be reported as current, and will stay current, as long as you keep making your payments through a Debt Consolidation Plan, if the creditor re-ages your account.

Keep in mind that if you are extremely delinquent when you enroll in a Debt Consolidation Plan your creditors may require you to bring your account current before the creditor accepts a proposal.

Long Term Benefits: Unlike introductory offers, the benefits through a Debt Consolidation Plan are long term. They remain for the entire period that you are enrolled in the program.

Shorter Repayment: Currently you are on what we refer to as the Pay Forever Plan which keeps you paying your debt for 20 to 30 years. On this plan, you end up paying double to triple the amount of your total debt.

Most clients enrolled in a Debt Consolidation Plan become Free of Debt in as little as 3 to 5 years. There are no prepayment penalties, so if you are motivated to get out of debt before the 3 to 5 year timeframe, you will not be penalized to do so.

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Our consultation is FREE with no obligation.

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Debt Consolidation Programs can help you with unsecured debts such as your credit cards (Visa, Master Card, American Express, Discover, etc.), department store cards (JC Penny, Sears, etc.), store cards (Home Depot, etc.), gas cards, unsecured personal loans, Sallie Mae student loans, repossessions and collection accounts including old utility bills, gas bills, cell phone bills, medical bills, and payday loans in collections.

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Yes! Start with a FREE consultation, to discuss your options.

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Usually, you can keep cards out of the program for emergencies. This will depend on your specific creditors.

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If you are at the point where you are considering a Debt Consolidation Program, chances are your credit already has been damaged. Missed and late payments to your creditors more than likely have already been reported to the three credit bureaus. So your main concern is how to stop the damage to your credit and begin to pay off your debt.

If you have been able to maintain current payments on your accounts, keep in mind that the Debt Consolidation program does require accounts to be closed which may affect your credit score.

Once your balances significantly decrease through a Debt Consolidation Plan, your credit will start to reconstruct itself.

A Debt Associate can review with you some simple techniques to rebuild your credit.

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The Debt Consolidation Program is designed to get you out of debt in approximately 3 to 5 years!

The Debt Consolidation Program does not have any prepayment penalties. Meaning, if you pay off your debt prior to your debt free date, you are not assessed additional fees.

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