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  Category: Articles » Finance » Debt Consolidation » Article

Consumer Debt Counselling

By Rina James

Remember: Running away from your creditors is not the answer. It is not
a solution, and may in fact lead you to bigger problems. If you are having
trouble paying off your debts, address this immediately with your

By accelerating the payment structure on your loan, the life of the loan is

In a normal 30 year fixed rate loan situation, your monthly payment is
applied towards principle and interest. It is amortized over the course of
30 years.

Having trouble paying your bills? Getting dunning notices from creditors?
Are your accounts being turned over to debt collectors? Are you worried
about losing your home or your car?

You¡¯re not alone. Many people face a financial crisis some time in their
lives. Whether the crisis is caused by personal or family illness, the loss of a
job, or overspending, it can seem overwhelming. Debt consolidation allows
a consumer to present their financial case to a lender who may be willing
to take on the burden of paying off debts in exchange for one monthly
payment made to the lender.

Know the real from the fake in consumer debt counseling

Reduce debts today for a better life! Believe it or not, there are many
consumer debt counseling business who want to take part in your hard
earned money. These companies know that you have big debts to pay
and so they take advantage of your desperate anxiousness and promise
you that they have the solution to throw all your debts to the wind.

How do these debt counseling companies work? What could you possibly
do to avoid being scammed by their promises?

The real ones

Legitimate and valid consumer debt counseling services are able to do the
following: make late credit accounts current with no back payments
necessary. Also, late fees and those that are already over the limit could
be stopped. Real debt counseling services are able to consolidate high
loan interests as well as balance accounts. They also find a method for its
clients to still be able to keep their credit cards for essential expenses
such as travel, business or any type of emergencies.

The fake ones

Beware and be wary of debt counseling services who claim themselves to
be a non-profit group when in actually, they are far from being one.

For many who buy wisely, the equity could be substantial. A home equity
loan can be used to pay off high dollar items, pay for college tuition, and
be used to pay off those high-end credit card accounts. If you have some
cash handy, you might as well pay off some debt, especially the one that
is on higher APR credit cards.

The main reason for this risk is that in order to secure a lower interest
rate (and thus a cheaper overall payment rate), you'll need to present
some sort of collatoral to back the loan.

All of the debt that an individuals owes appears on a credit report. Credit
repots are used by financial institutions when a loan has been requested.

You can stop a debt collector from contacting you by writing a letter to
the collector telling them to stop. Once the collector receives your letter,
they may not contact you again except to say there will be no further
contact or to notify you that the debt collector or the creditor intends to
take some specific action. Please note, however, that sending such a
letter to a collector does not make the debt go away if you actually owe
it. You could still be sued by the debt collector or your original creditor.

One example is AmeriDebt. The Federal Trade Commission has fortunately
shut this company down due to numerous and various complaints from its
customers. The way AmeriDebt scammed debtors was by telling them
they could easily get out of their debts. This could be done, according to
them, even with no upfront payment fees. However, they were able to
deceive their customers into forking up contributions, voluntarily.

These payments, made every month by their clients, were transferred to
companies-for-profit, instead of sending the money out to the creditors.
As a result, the clients suffered by worse credit ratings and annoying bill
collectors. Currently, all accounts at AmeriDebt have now been
transferred to a reputable agency via a bankruptcy third party trustee.

Payments will be lowered

Any claim made by debt counseling services that payments will be lowered
are illegitimate. The fact of the matter is, payments can't be lowered.
The only aspect in debts that could be lowered are interest rates.

You¡¯ll call them, not the other way around

Any offer of services that involve the settlement of debts are bogus. You
need not be offered something you can very well do so yourself. All you
have to do is pick the phone up and call any of your creditors. They are
more than willing to negotiate with your demands.

All in all, don't be easily swayed. It pays to know more than be duped for
money that rightfully should be yours.

Debt Consolidation- Debt Consolidation is an easy and timely alternative. A
Debt Consolidation Counselor will evaluate your current situation and past
debt and develop a budget for you. In a credit card debt consolidation,
your average interest rate may be reduced. All your loans can also be
transferred to one single card that has a lower interest rate than the ones
you are currently paying.

The prospects of managing financial obligations have just gotten worse, as
Congress has passed legislation that will make bankruptcy filings more
difficult than ever.

Whatever your motivations, a decision to consolidate debt online may be
the solution but before you make your decision or offer detailed personal
information to debt consolidation companies check to see what they have
to offer.
About the Author
Debt is a hard thing to live with, reduce debts today!

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