subject: Truth and Lies In Credit Card Consolidation [print this page] In an unstable economy, with job scarcity and pay decreases, avoiding debt can be almost impossible. If you have a credit card, mortgage payments, medical bills, or any unforeseen expenses then you know just how quickly that debt can add up and threaten you with bankruptcy. Trying to get out of debt on your own is almost impossible, and so it is imperative to get help from companies that specialize in debt counseling.
Many forms of debt, especially credit cards, fall under a category called unsecured debt. This debt is not leveraged against a single asset, such as your car or home, which means that if you have to declare bankruptcy while you have this then collectors will be able to draw against any assets they deem appropriate. This can be a long, excruciating process that you would be smart to avoid. Consolidating your debt can be the first step to minimizing your chances of having to deal with the problem.
Companies have the ability to work with companies to transfer your balance from bills and credit cards in order to put them all under one lender. This form of credit card debt consolidation levies all of your debt against a single asset, normally your car or house, in order to secure it and protect you from collectors. This form of consolidation has the added benefit of providing you with opportunities for lower interest rates, which can save you tens of thousands of dollars over the course of your loan.
Most companies will tell you it is easy to manage your debt and that lenders are simply waiting for you to go through the process. The truth is that it is not that simple, if you have a great deal of unsecured debt then most companies will probably consider you a credit risk and will be wary of taking your debt without a guarantee. This can lead many companies to find a solution that is in their best interest, charging you a fee up front in case you are denied or collecting a percentage of your monthly payments in order to make a hefty profit. The longer you wait to consolidate your debt the harder it will be for you to manage it without having to deal with shady companies.
The most important thing to remember about dealing with credit card debt is that you need to remain calm and in control of the situation. Once you have taken the step of getting help you must remain involved in order to ensure that everything being done is in your best interest. That way you will be able to utilize their expertise to help you get out of debt.
