Debt Consolidation Articles

By Tom Bates

These mounting statistics underscore a major problem with debt consolidation: It feeds upon the tendencies that got you in trouble in the first place. By taking on yet another creditor, you're adding the proverbial fuel to the fire. In this case, it's your money that's burning. In most cases if your so far in debt that you have to take out the equity in your home to help, your most likely a high risk and going to have a high risk loan.

But, if you want to roll the dice with your options:

Home equity loan or line of credit:

Home equity loans are often taken for a quick fix. This treats the symptoms, but does not cure the illness. Simply said, it pays the credit cards, but now you owe on the house for what, 20-30 years. The unsecured credit card/cards are now the home you raised your family in. Additionally, the debt you just paid off is now in good standing with your bank, and like most you're going to continue spending on these cards. This is where it gets dangerous, and about 80% of all consumers will fail here and double their debt. In most cases folks will end up calling an IAPDA Certified Debt Arbitrator for help. Life will happen creating additional hardships. By way of default on what now is your home loan you stand a strong chance loosing your home. Just because the bank said you can borrow an amount does not mean that is what you have to borrow that amount.

Balance transfer to a zero percent credit card:

Sounds great but is it? No, you're once again going to be hit by life and the same as above you will double your debt, forcing you to call an IAPDA Certified debt Arbitrator for help. When you should have called one in the firsts place. Getting the quick fix will help with the pain but fix the problem. This is the biggest problem for Texas consumers, as their homes were protected from the credit card company, but now they owe for a mortgage. Your home is no longer protected, and when "Life Happens" there goes the mortgage. Debt

Consolidation Loan: Even a bigger borrowing mistake that will lead to disaster.Before you sign on the dotted line, be sure that the costs of the new, bundled loan will truly be less than what you're already paying various creditors. For many consolidation-loan candidates, their current credit woes mean they won't get the lowest-available interest rate. Plus, when there is nothing to secure the loan (such as your home), expect the lender to bump up the rate. Your chances of getting a loan based on your credit are going to require some type of lien. This will be your home, car, boat or first born. The key is to resolve your debt, not bring on new debt. As consumer debt continues to soar out of control, most will take the first option that sounds good. The only real option to reduce your current debt is to face the current problem. You can try and work things out with your bank, but you will soon see the banks have no interest in helping.

Options:

Consumer Credit Counseling: In most cases they can lower your interest rate, and extend your term. But, the first time you or your agent are late, all that interest that was forgiven is now back and your in mounted debt that you can not manage. They claim to be non profit, but clearly when they ask your creditor for a share of your payment, that clearly defines greed.

Debt Settlement:

Your credit is already in trouble, don't worry about your credit yet. You need to be more worried about wage garnishment or your bank account being frozen. There is no looking back. Take control of your debt and hit it head on with an IAPDA Debt Arbitrator. With A qualified debt settlement company your likely to save 40-60 percent of what you owe, lower your monthly payment.

Things to look for in a debt settlement company:

* Does the Debt Settlement Company have IAPDA Certified Debt Arbitrators?

* Does the Debt Settlement Company you're looking into have a perfect BBB Report?

* Does the debt settlement company you are considering belong to the local Chamber of Commerce? If so, is the Chamber an accredited member of the Chamber of Commerce of the Unites States? This type of affiliation will help ensure that the company is conducting business in a proper manner.

* How much does the service cost?

When choosing a solution for debt relief, it's important to make sure the program is something that's affordable and realistic within your monthly budget. If you can't afford the program and join anyway, you're are just causing more long-term financial problems for yourself; however, if you are able to meet the monthly financial requirements of the program, Debt Settlement is a great form of debt relief for unwanted credit card debt. Most people don't realize that Debt Settlement is the least expensive form of debt relief outside of bankruptcy.

Tom Bates,CDA
CEO,President
Absolute Debt Solutions, Inc. http://www.absolutedebtsolutions.com