Walking in the Valley of the Shadow of Debt

We have our necessities, and we work hard for them. But unfortunately, most of the times, what we earn is just not enough for all our basic needs. Thank goodness there are home loans, auto loans, medical bills, and credit cards. We can have what we want and arrange to pay for it later.

Then the problem begins, debt. Debt is inevitable. Most of us can't afford to pay for our homes, cars, or our children's college educations. But too many of us let debt get out of hand. We become dependent on our credit cards to support our lifestyle, and cash advances become a routine for us to get by our needs every month. Before we know it we are already buried in debt, debt we find very difficult to pay due to the soaring interest rates given by the creditors. So, those nice pair of shoes and that cool shirt we thought were a bargain can actually cost us a fortune if we are unable to pay more than the minimum monthly payment in our credit cards. We start to feel guilty for all the things we buy. We stop to give ourselves a treat in the spa or a night out after a hard day's work. And we stop to dream about that house, or car we wanted for so long. We start to live in paranoia, worrying about the next time the creditors call, and wondering how in God's name we are going to pay off our debt. The answer is debt consolidation.

Debt consolidation is a process of combining multiple debts into one single debt, usually ending up with lower monthly payments. Debt consolidation, however, is not a loan. Then, how is it going to help us pay our debts? You might ask. After you have chosen a debt consolidation firm, the firm will require you to present all of your debt and finance information. The firm then calls the creditors and negotiates on your behalf. They can usually negotiate lower monthly payments, lower interest rates, and reduce or eliminate late fees.

This service is provided by many debt consolidation companies free of charge. But we must take utmost care in choosing the right one to help us in our debt situation, as some firms use deceitful tactics in their consolidation services. Finding a non-profit debt consolidation company who is really a non-profit agency can be difficult. Many so called non-profit companies advertise a Federal 501-C3 non-profit status to draw the attention of consumers when they are not actually non-profit. A legitimate non-profit debt consolidation company will not retain a first payment. A first payment is a one-time fee equal to the first months payment on all debts consolidated. A non-profit will also not charge a monthly fee on each individual debt. They keep their program alive by voluntary contributions from consumers and from payment from creditors, which is a percentage of the payments they handled from consumers. Creditors are generally more receptive to the approach of a professional debt consolidation counselor with a well thought-out debt consolidation plan, than the individual debtor who may not have considered all the angles.

With debt consolidation, we can reduce our monthly payment up to 50%, while still paying off our bills in less time. Ending the harassment of creditors, stress, and paranoia are now within reach.