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What is Debt Consolidation?

Bankruptcy
For many people, due to the current economic climate, and with their backs to the wall trying to get out of debt due to loss of work or income and mortgage payments to be made, bankruptcy looms ever closer as a alternative to an apparent unresolvable position. It is true that when debits become almost too hard to manage many people think of bankruptcy as the only way out. It is the worse way out and there ARE other alternatives.

The problem with bankruptcy is that it can affect your credit rating for years to come. It can lower your credit rating points by up to 200 and destroy your future credit possibilities and present difficulties in getting a reasonable interest rate even when one can get loans in the future.

Debit
The problem has been with loans being too easy to come by and banks and other lending institutions offering easy money over the past few years. As a consequence, many people have more than one debt. Credit cards, Mortgages, sometimes more than one, Hire Purchase are only just a few of the debts many people have accumulated and now find themselves in.

As the debt increase so they become increasingly hard to manage. Who shall I pay this week or month? Will I borrow of this loan to pay that one?

Well, no matter how bad it is or seems there IS a solution!

Debit Consolidation
There is a solution to all of this and it comes in the form of debt consolidation. When a person has a lot of debt, it can become overwhelming to manage that is what usually leads to someone losing their head. For example, if someone has four credit cards, one loan, two car loans and a mortgage, that means that there are eight different payments they have to make. It can be a lot or work to keep on top of, and many fall apart as their debts get more complex. Debt consolidation can be just the solution a person in debt is looking for. In addition it tends to trap ones attention so one ends up thinking more about the debts themselves than about solution to get out of them.

What is debt consolidation?
the first step of a debt consolidation program is to take all the various loans and debts, and consolidate or put them together into one easy package. This can be done through a larger loan using a debt consolidation company. For example, if you owe $10,000 on credit cards, $20,000 on a loan, $33,000 on cars and $120,000 on the home, then the debt consolidation company can make a loan for the amount of $192,000. This loan pays off all the other loans so they get off your back. Then, you only need to make one monthly payment to the debt consolidation company to pay off the $192,000 loan. This is much easier to handle for many people and obviates the need to go into bankruptcy.

Debt consolidation is an ideal solution for anyone who has trouble managing their debts and want to start over without a bankruptcy. It should be noted, however, that debt consolidation is not perfect and if you decide to do this you might pay more or less than if you managed the debts yourself.

Debt Settlement
Another alternative to debt consolidation is debt settlement. Some debt management companies offer a debt settlement option where they contact and negotiate with the crteditor on behalf of the debtor and arrange a settlement of the debt, usually of a much lower figure than the original debt. Once the final figure is agreed upon a payment option is arranged, usually regular payments until the arranged amount is fully paid off. this can be a better option for some people.

The next step, once debt consolidation has been achieved is to apply some very strict discipline. This means cutting up ALL your credit cards, refusing to accept any further debt, NO MATTER HOW ENTICING THE TERMS ARE, and applying a principle of paying for things by cash only and if you do not have the cash, do not buy it.

In all options it is advisable to consult with ones financial advisors and practice some due diligence with regard to the company one selects to manage one;s debt. To this end we offer, on the following pages, some reviews of various debt companies so you can get an idea of who they are and what they offer.

Tools and Resources
Under the resources tab there are a number of useful tools available to help reduce debt. Some steops on reducting debt are provided as well as additional information that one can use to help with debt reduction. There are also some calculators and I will be adding more information and tools as I can over the coming months.

Debit Consolidation Reviews
There are many companies that offer debt consolidation, so we have divided the reviews into countries starting with the USA, Uk and Australia. As we add to these we will also add further reviews in other countries over time so that there will be sufficient reviews of debt consolidation companies for anyone to make an assessment of which debt management company is the most suitable for them in their country.

Here you can check out the Debt Consolidation Reviews of various debt consolidation companies


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