Before we look at debt consolidation solutions we should perhaps first consider: Why do people get into debt? The reasons are many and varied, however it is an inescapable fact that more and more people from various backgrounds and ages find themselves in a debt trap.
Unexpected and traumatic events such as illness, job losses, business failures and divorce can all contribute to a family’s financial problems. Anyone who finds himself in any type of financial situation where he is unable to pay his bills, should consolidate his debt.
Once you do this you’ll be on your path towards financial freedom.
When you get to the point where it becomes difficult to repay your debt, it is even more difficult to effectively manage your debts. Most people don’t know who or where to go for help. You may be sick of the constant phone calls from creditors, but that doesn’t mean you have to give up.
Once you learn to manage your debt and not try to run away from it your financial problems will disappear. The next step is to start looking at various debt consolidation opportunities that you can utilize.
You’ll find a few of these opportunities listed below:
* Counseling service/ Financial Adviser:
Counseling services for debt consolidation are a great way to help you get out of trouble. There are many counseling services that offer free credit repair as well as access to many consolidation programs.
These organizations are on your side and not on the side of your creditors, and hence provide debt relief. With the free credit repair facility, you can actually cut your monthly payments in half.
* Debt Consolidation Loans:
Debt consolidation loans are the popular choice with most people who use the cash to pay off their debts, including personal loans, credit card and store debts, replacing them with one lower-cost repayment per month.
* A Debt Repayment Representative:
Your monthly repayments can be merged into one lower monthly bill and you can pay off debts in just 3-6 years. With the assistance of a certified debt repayment representative, you are empowered to consolidate your financial position.
A debt repayment representative is your personal debt counselor who negotiates with creditors on your behalf so that you no longer receive harassing phone calls from collection agencies.
* Credit Repair Clinics:
This is a controversial debt consolidation solution, because some of them operate illegally. Others have been caught while stealing the credit files of individuals under the age of 18.
They also stand accused of encouraging clients to get a new IRS Employer Identification Number (EIN), which is illegal and
blocks earning any Social Security benefits. For this reason Consumer groups for debt management issues strongly discourage people from consulting credit repair clinics.
* Online services:
There are many websites on the Internet sites that offer information and help online for debt consolidation.
Do a bit of work yourself, looking at all of these various options and decide what is the best solution for your specific financial situation.