You know that things are bad. There are stacks of opened bills on the table and even more that you haven't bothered to open on the dresser. Your family and friends won't give it to you on loan. You have spent more than you can realistically expect to earn in the near future, and you can't bet on winning the lottery. So, is there really anything you can do to help yourself get out of this mess you've made? You might want to think about consolidating your debts or getting credit counselling.
Debt consolidation has become a well-known term and a very common way to deal with debts. Debt consolidation started on the internet during the dot-com boom, but companies now also advertise on TV and radio. People are looking for ways to get out from under their consumer and student loan debts because of the ads.
Like anything else, there are good and bad debt consolidation services. With more publicity and advertising, the government has learned more about the differences between the agencies, and some of them have had to deal with expensive lawsuits.
Before trying debt consolidation, it's important to know what it is and how it works. Debt consolidation is when you take all of your unpaid bills, like credit card debt, student loans, personal loans, etc., to a debt consolidation representative and give them all at once. The representative will then talk to each debtor and ask them to help make better terms. Sometimes this means lower interest rates, smaller payments spread out over longer periods of time, and so on. Debt consolidation doesn't get rid of real debt. Instead, it helps you find a better way to pay off your debts that fits your personal and financial needs. Some new buzzwords for the idea are "debt negotiation" and "debt settlement." No matter what you call it, the idea and process are still the same.
You might think that the solution to consolidate debt is too good to be true. That depends. Like almost every other financial topic, debt reduction has both supporters and critics. As a consumer, it's really up to you to carefully weigh the pros and cons and make the best choice for your specific situation. You will need to do some research to find a company that seems like it might be worth a shot. Ask groups like the Better Business Bureau for advice based on the complaints and comments they have received. You might decide to talk to your creditors directly instead of paying a fee to send your debts to another agency. Many of your creditors will be willing to work with you because you are trying hard. Once you've solved your current money problems, you might want to take a class on how to make a better budget and financial plan to keep you out of trouble in the future. You will be very glad you did.
