The Hard Cold Facts about That Debt Consolidation Program
A Credit Article Contributed by Mark Mcclelland
The Hard Cold Facts about That Debt Consolidation Program
What Should You Expect from Your Debt Consolidation Program?
If you've done any amount of searching through the Internet looking for a debt consolidation program, you've probably come across a whole lot of confusing and contradictory information. One article says that a debt consolidation program will encompass both your secured and your unsecured debt. Another may imply that most credit counseling agencies are well known to the nations credit issuers and thus they can easily get you the 'best deal'.
The fact of the matter is that whatever debt consolidation program you sign up for, no matter what kinds of claims the companies make, no matter whether those claims are accurate of not, you are the one that's going to be doing the heavy lifting here. There's just no way round it. In order for this to work, you're going to have to assess and modify your spending habits, and you're going to have to develop a plan, not just for paying off your debts, but for living within your means. And there's no point in sugarcoating it either; it's not going to all be over tomorrow morning when you wake up.
Although there's not a debt consolidation program out there that'll simply make your debts disappear, there are programs that can help you get a handle on your debts, and develop the financial skills that'll enable you to live within your means.
The Truth about Debt Consolidation Programs
Normally you set up a debt consolidation program with the help of a credit-counseling agency, preferably one of the more reputable ones. These programs are a means for you to understand the depth of your debt problems, get your arms around your payment problems, and set up a schedule to pay off your debts.
A debt consolidation program will not get rid of your debts, nor does the use of a credit counseling agency's services come for free. Even reputable non-profit agencies require funds to operate, and they don't get them from charitable donations. And typically, credit counseling agencies don't deal with secured credit, like your mortgages and car loans... thus the debt consolidation program they'll help you set up will only address your secured credit, meaning primarily your credit card debt, personal (signature) loan debts and any medical debts you may have.
What a debt consolidation program will do for you is establish a controlled debt re-payment schedule that both you and your creditors can live with.
Your Debt Consolidation Program and Debt Reduction
It's also highly unlike that any reputable credit-counseling agency would ever make a claim that it will be able to get your creditors to reduce, by any significant amount, the actual amount of debt you owe. In spite of what some of these organizations tell your - that they'll be able to get your creditors to reduce your debt 40%, 50%, 60%, or even more - the truth is that you owe what you owe, and your creditors want their money.
To begin with, there really isn't any such thing as debt negotiation. The only time a creditor will actually reduce the amount of debt you owe is when they've already charged off (written off) your debt as uncollectible and has already informed the credit reporting agencies of your defaulting on the debt. That means that even if you eventually pay off the debt in full, your credit report will have the default notification on it, and there's no way to get that statement off the report other than by waiting 7 years for it to expire.
As said before, a debt consolidation program can help you get your arms around your debt problems and establish a livable re-payment schedule with your creditors, but in the end, you're going to have to pay off your debts...there's no other way round it.
