If you are struggling to manage your debt but unsure of what steps to take, you can look into solutions offered by loan consolidation companies. Many of these paths negatively affect your credit score, require long-term dedication and obligate you to still pay off the majority of what you owe.
Debt consolidation companies communicate with your debtors to negotiate lower rates on your behalf.
While credit companies are under no obligation to negotiate your payments, the best debt consolidation companies may be able to consolidate your debt to a single, monthly payment or negotiate to lower the total amount of debt that you owe.
For more information on the best debt consolidation loans and credit management options, have a look at our articles on debt consolidation.
To pursue bankruptcy, you must qualify and complete the entire process, including pre-filing and post-filing counseling.
After observing unethical practices that ran through multiple industries, including debt consolidation, the Federal Trade Commission (FTC) created the New Rule.
When a settlement is reached, the funds that you have been setting aside go toward paying your creditors and negotiation fees.
With bankruptcy, you officially declare that you cannot pay your debts.The goal of consolidation is to have a lower payment at a lower interest rate than you currently have.Debt Management Program: These programs often work hand-in-hand with credit counseling programs.When you begin this process, you set aside funds each month into a separate, insured account.While you're building up your funds, the company or lawyer you've selected negotiate with your creditors in an attempt to lessen the total amount of debt that you owe.
According to Cambridge Credit Corp., a nonprofit credit-counseling agency, 70 percent of Americans who take out consolidation loans end up with the same or more debt after two years.