Godebtfreenow

Its a question that has stumped wise men (with overdrawn credit limits) for generations. Do I file for bankruptcy, or do I get debt consolidation loan and spend ten years paying off my debt?

The simple answer is, if you can do the latter, do it.

Sure, bankruptcy means you dont owe anything to anyone (well, sometimes it means you need to sell your assets, but more often than not youre starting afresh), but it also means a big fat black mark on your record that will never go away (despite what some people say about seven years being a magic slate cleaner).

Bankruptcy marks you as a bad risk for every potential lender. Mortgage lenders, credit card companies, employers they all see that credit history and get the same furrowed brow.

And even worse, the Bush administration has chosen to pass laws that mean, now, if you go bankrupt owing money to a credit card company, they can take your family home.

Yes, thats right, the government has made it law that, unlike big businessmen who can go bankrupt every second year without penalty, normal people like you can have your family home taken off you just because you couldnt keep up with your MBNA payments.

Of course, the credit card companies were behind the bill, and spent millions on Congressmen and Senators to ensure it passed without too much debate, and millions of Americans who look at their debt and think, Well, I can always go bankrupt, have no idea that if they do, theyll genuinely lose everything they have.

Which leaves us with the other option debt consolidation.

Debt consolidation is when you gather all the debts you owe, pool them into one amount, and borrow that amount from a bank or other financial institution, to be repaid over a long period of time, at a set (and low) interest rate.

It means that everything you owe to Sears and Best Buy and MBNA and Citicard is suddenly paid off, and all you owe is one long-term debt to a stable, secure, eager to help you stay afloat bank.

Think about it why carry six debts that all need to be repaid in the short term, when you can have one debt that doesnt have to be completely repaid for years? It just makes sense.

Debt consolidation is a process whereby debtors can gain freedom from debts through an arrangement suggested by a loan provider, known as debt consolidation agency. Before allowing the debt consolidation agency to take larger credit for the freedom from debts, many borrowers will question the role they play in the process. Do borrowers actually play so minute a role in the process as depicted? Since it was his loan that was used to pay to creditors and his money being involved in the process how can borrowers role in the debt consolidation process be discounted thus?

It is not that the debtor or the borrower does not play an important role. It is only that their role is supplementary. Had it not been for the debt consolidation agency, the debtor would have continued with the debts.

Debt consolidation agency provides focus and direction to the attempts by the debtor to come out of debts. Experts from the lending agency study the case of the debtor and then suggest the recommended courses of action. The worst case of debts can be a vicious circle of debts. In a vicious circle of debts, borrowers are never able to come out of the entrapment of debts. Such debts require a revolutionary action, which can be offered only by a debt consolidation agency.

Debt consolidation agency advances a loan to the borrower. Known as debt consolidation loan, this loan that will go towards the payment of debts, rather than individuals personal income. When personal income does not go towards payment of debts, borrower can continue making expenses to routine heads as earlier. This reduces chances of any future debts.

Debt consolidation is an amalgam of several processes and sub processes. The debt consolidation agency will deploy a loan representative to assist the debtor with the several processes. Borrowers can question every move of the experts. They are free to exercise their discretion on important decisions.

Firstly, borrowers are required to make a total of the several creditors to whom they owe. Categorizing them will make the task of analyzing debts convenient. Debts are to be categorized on the basis of high or low rate, types of debts, time when they are due, and any other basis as the borrower feels necessary.

Having totaled the debts, the borrowers can get onto the task of creating a solution towards debts. Debt settlement is not as plain a task as most of us will feel. A vicious circle of debts as mentioned above requires revolutionary action. Similar is the case with the debts accrued through credit cards. The increase in debts through the high interest rate is a matter of concern. Dealing with the credit card debts in the same manner as a low interest debt will be incorrect. Since credit card debts carry a high rate of interest, they are dealt with on a priority basis. Similarly, the debt consolidation agency utilizes different techniques for different debts and situations.

The debt consolidation agency will also help borrowers with the negotiation on debts. Dont you bargain with the creditor to lower the rate of interest or lower the amount repayable? The same is done by debt consolidation experts on the behalf of the borrower. The expert induces the creditor to bring down the repayable amount. His principal target is the unsecured creditors. By promising them a one-time payment, the expert is able to bring many of the creditors towards a common thinking.

However, there are a few donts associated with debt consolidation loan. Never use debt consolidation loan as an excuse for incurring debts. If you have taken a debt consolidation loan, you must pay it in full. An unpaid debt consolidation loan is no better than a debt. This will again necessitate a debt consolidation loan. Lenders, who can clearly see that you are a habitual defaulter, would not lend. It is much easier thus to pay the debt consolidation loan. A small monthly payment is all you have to make towards the debt consolidation loan and you are free of all the ensuing problems.

Are your bills long since due? Do creditors keep calling? Are you deep in debt?

If you answered yes to every question, you are not alone. Statistics show that the average American house holds 13 credit cards, and a combined debt of $5,800 in credit card debt or more. In debt, it’s almost impossible save, invest, or enjoy life due to a lack of financial freedom.

If you are experiencing severe debt difficulties and find it difficult to cope, you really should
not borrow more money. Try to consolidate your debt using some debt consolidation program.

Debt consolidation programs – what are my options?

There are various debt consolidation programs, which gives you a lot of options. You could either select a paid service or go for the many free services available. If comfortable, you could also avail an online program for debt consolidation. Banks and financial firms will provide
you with these services.

Once enrolled in a particular company, you will have a financial analyst or an expert counselor working with you to frame a program to suit your financial need. They then work with your creditors to get lower interest rates and lower monthly payments for you. In some cases,
they might even get creditors to eliminate past fees.

Once your counselor has come to an agreement with each of your creditors, you must begin making payments to the debt consolidation company each month. They will divide your payment among your creditors.

Another benefit of a debt consolidation company is that they will teach you how to use credit wisely and how to budget better so that you won’t find yourself in debt again.

If you want, you can search the Internet using the term “debt consolidation” and you will find a wide variety of companies to choose from who will be willing to help you. Fill out their free, secure online questionnaires; and a representative from each company will get back with you
within 24 hours with a recommendation about your financial situation.

How to Use Debt Consolidation Opportunities to Break Free from Debt

Debt consolidation offers users an opportunity to get out of debt and to regain control over their lives once again. Many people owe a lot of money and often struggle to find ways to payoff their debts. Debt consolidation is often the best choice in this scenario, as it can help debtors pay off both secured and unsecured loans.

Debt consolidation will also give debtors the chance to reorganize their lives along with their debts. If they choose to go with a debt consolidation program, then a qualified company will help them combine their bills into one monthly installment. The debt management solutions can help you by terminating your interest rates on personal loans, mortgage loans, credit cards, and other loans. The overview of debt consolidation then is that you will pay off your debt sooner and have more cash to spend later.

If you own a home and your credit is bad, you may want to seek out a bad credit mortgage lender to help you reduce your monthly installments and interest rates. Be aware that some mortgage lenders will increase your rates of interest and mortgage installments while claiming to lower your bills.

There are, however, loans available that provide genuine opportunities, such as early pay-offs, cash back loans, lower interest rate loans, lower monthly mortgage payments, and so on. The lenders are aware that families run into problems and instead of taking advantage of this, they will work hard to help them get out of debt and restore their credit. There are also lenders that will combine your mortgage, interest and bills, including credit cards into one monthly payment after refinancing your home.

Finally, if you are in debt over your head, don’t become like the person who despairs and accepts that he will lose his home, vehicle, and business; rather, become the person who attacks things proactively to find a solution before you are that far in debt; start seeking out the proper debt consolidator right now.

If you are in debt you are a slave, literally. Yes I know that slavery was abolished 150 years ago but that was just one kinddebt is another but you have the same problem and that is lack of freedom. When people become debt free (often when they consolidate debt) they cant believe the weight that is lifted and they cant believe how stupid they were for ever going into debt in the first place. They would gladly have the chance to do it over again and not drive that new leased car and not go on all those exotic vacations on their credit cards tab and not eat out as much and not live in the nice part of town in the expensive apartment with the gym membership. They would put off those luxuries in order to establish themselves and then would slowly as they were actually able afford the nice things in life.

So being realistic and never going into debt in the first place is option numero uno but what if you have already made bad decisions? Is there a good way to get out? Well yes and much of it is education, how to handle money and how to find trust in the concept of delayed gratification. After all the best things in life are those that you have to work hard for and wait for because you appreciate them and you know what it is like to be without them. You also find out that life isnt that great just because you have nice things, rather its the people and the relationships in life that are valuable. Anyway along with the education there are services that can help you do this thing faster. One of these services is the many consolidate debt plans that are being offered.

To consolidate debt is not only cost effective but it is convenient too. Lots of times people waste lots of money because they cant keep track of all their bills. This service provides you with simplification as well as a savings in the cost of the money that you owe. So why would someone or some corporation want to do this for you? Well they benefit too. You see a bank can make the same amount of money lending out a little money at a high interest rate or lending out a lot of money at a lower interest rate. If you bring all your debt into one place you are bringing more money over to that lender and therefore more interest income.

So the option to consolidate debt is a good deal for everyone involved. You get your loans paid off quicker and cheaper and the lender that offers you the deal gets to make more money that they would otherwise. It is yet another perk of a financial system that encourages and thrives on competition to keep prices down and quality of product or service up. Yeah! Clap your hands for capitalism.