Debt Consolidation Programs

You're here because you're in debt. And you've tried working with credit card companies, but they don't want to deal with you. You're getting phone calls and collection letters and you want them to stop. You may even feel like you'll never get out of debt.

Here's some good news though. Debt consolidation programs are available for you that can get you out of debt in just a few years, while paying less per month and less overall on your debt. To learn more about the programs we offer, submit a form now for a free 10 minute consultation. We can also give you a free quote about how much each will cost.

Start here for your free debt analysis.

What is Debt Consolidation?

Debt consolidation usually refers to debt management programs designed to help you get you out of debt quicker than you would on your own. There are really two types of theseprograms -- credit counseling and debt settlement. Although they both are considered a type debt consolidation, they are very different and it's important that you understand each of them before you continue.

What is Credit Counseling?

Credit counseling is when a company aggressively negotiates with a credit card company to get the interest rate reduced. The money you then used to pay to a credit card company now goes to the credit counselor and they pay down your balances using that money.

Important things to note about credit counseling are below:

1. The balance is not usually changed, and the account stays current.
2. Your savings comes from interest rates being reduced.
3. The median time to pay off those debts is 4 to 6 years.
4. Your payment amount will be either close to or the same as what you're paying now.

Generally speaking, credit counseling is better for your credit score in the long run or if you deal with creditors that are considered high-risk like Discover or Capital One.

Read more about how credit counseling works

What is Debt Settlement?

Debt settlement, on the other hand, is not credit counseling in that you first have to be in default in order to be eligible for a settlement. But also, what it entails is that the company tries to negotiate the balance down, not just the interest rate.

1. Because your debt is in default, credit card companies will be willing to accept less than you owe to satisfy your balance.
   
   
2. Your balances will be paid off usually in 2 to 4 years if you complete the plan
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3. Debt settlement is not a cure-all. You still can get the calls and collection letters. Your credit score will be impaired, though it may already be suffering. Due to these factors, it is best for people who cannot afford to pay their debts in full without suffering a hardship.

People who choose debt settlement usually may be able to save anywhere from 40 to 60% off of what is owed on credit card debt. That savings means you can more aggressively attack your bills and get out of debt faster.

Read more about how debt settlement works.

What is Bankruptcy?

People who can afford to enroll in a debt management program generally prefer to use that option instead of bankruptcy. Bankruptcy can severely impact your credit for up to 10 years and is a matter of public record for 20 years, and as a result, most people treat it as a last resort.

There are two types of bankruptcy and how they work very different.

• Chapter 7 bankruptcy requires the forfeiture of assets that are not protected by the Federal government or the State governments. Anything that's not protected will be sold to pay your creditors. And that black mark will stay on your record for ten years, affecting your ability to do many things, like buy a house, get financing for a car, even getting a job becomes more difficult.
  
  
• Chapter 13 requires a "means test" and decides if you're able to pay a minimum payment to the court for 5 long years. In addition, a Chapter 13 bankruptcy, although nicer than a Chapter 7, will stay on your record for seven years, even if you manage to successfully complete the program. Your credit score will be decreased anywhere from 200 to 250 points, and you may still have trouble getting loans in the future.

Read more about bankruptcy versus debt consolidation programs.

What are debt consolidation loans?

Debt consolidation programs are very different from debt consolidation loans.

• Debt consolidation loans involve extending credit to you for the purpose of paying off multiple bills you owe. With all your multiple bills paid off, you now only owe the bank who extended you the loan. This option is useful for people who bothered by having multiple payment dates or are suffering from high interest on credit cards.
  
  
• There are two types of debt consolidation loans – secured and unsecured. A secured loan is one where you pledge a piece of property such as your home as collateral to your lender in the event you default. Since this reduces the risk for the lender, they will offer you better terms such as a lower interest rate. However, if you miss a payment, they are technically able to seize the property you pledged as collateral.
  
  
• To get a debt consolidation loan, you usually need to have good credit. This may be difficult if you have high debt amounts or have missed payments recently.

Read more about debt consolidation loans versus programs

Is a Debt Consolidation Program Right for Me?

In conclusion, debt is a troublesome thing. It tears families apart, ruins relationships, destroys your self-esteem and really can make you give up hope. Whether you choose credit counseling or debt settlement, we understand that financial problems are difficult.

Credit card companies have worked hard over a period of decades to crush the average man or woman under a mountain of debt. We're here to relieve that burden. Let us help you by negotiating with your creditors to obtain savings on your debt.

Start now and get a free debt consultation.