Are you familiar with debt consolidation? You have probably heard the term, but do not fully understand what is involved. If you’re trying to deal with paying a lot of bills, there are debt consolidation programs out there that can help you. The important thing here is to make choices wisely. Read the following article to find out more about debt consolidation and how you can use these strategies to get out of debt.
Don’t necessarily trust just any non-profit debt consolidation company when you’re researching your different options. Some companies use that term to get away with giving you loan terms that are considered quite unfavorable. Make sure you reference them with the Better Business Bureau and also look for personal recommendations.
Make sure the debt consolidation firm’s counselors are qualified. They should be properly certified. Is the company legitimate with the backing of well-known and highly reputable institutions? This helps to determine the legitimacy of the company and whether or not it’s worth pursuing.
Do you possess life insurance? If you really need to pay off some debt, consider cashing in the policy. Get in touch with your insurance provider to ask much your policy is worth. You should be able to borrow a portion of that value of your life insurance policy.
Think about bankruptcy instead. This option can negatively effect your credit, and you should be aware of that. But, if you have no way to pay down your debts and you’re missing payments, your credit could be irreparable already. Bankruptcy could let you start over.
If you own a home, you may want to consider refinancing your home and taking the cash and paying yourself out of debt. With mortgage rates being so low, it’s a great time to pay off your other debts. You may be surprised by how low your house payment will be, too.
Only work with certified debt counselors. You need to check with the NFCC in order to find good companies that hire reputable counselors. That way, you can be more secure that you are doing the right thing and dealing with the right people.
What is causing your debt? This is something that must be figured out before beginning the process of debt consolidation. If you’re not able to fix what is causing you to have this problem, then alleviating your debt isn’t going to really help. Therefore, discover the cause(s) of why you are in debt, resolve it, and then pay off your outstanding debts.
Debt Consolidation Firm
Make sure you know the physical location of your debt consolidation firm. Some states may lack licensing requirements for opening a debt consolidation firm. It is important that you don’t end up with one of these companies in a state that doesn’t regulate this industry. It’s not hard to locate this information.
The goal of debt consolidation is having a single monthly payment you can afford. A good rule is working towards a 5-year plan, but you can adjust based off of your situation. This provides you with a workable goal and a time frame that lets you pay it off.
Keep in mind that debt consolidation agencies in Maryland and Florida do not require a license. Avoid doing business with companies in those areas. This will help protect you legally.
After making a list of all your debts, keep accurate records of the money owed to each creditor. This needs to have a due date if there’s one, how much is owed, the amount of interest you’re paying, and the amount you pay monthly. This information will prove helpful when you consolidate.
If you are personally going through a Chapter 13 situation, then debt consolidation might let you keep your physical property. Paying off everything in three to five years can still let you keep all of your personal and real property. You could also qualify for having your interest eliminated while you’re going through this process.
Carefully considering your options with some research is the best way to make sure that a debt consolidation option can help you financially and doesn’t make things worse. Spend sufficient time looking at the pros and cons of all options, using this piece as a way to sift through the information. This is sure to facilitate a smart choice, financially speaking.