subject: Important Aspects Of Debt Relief [print this page] The fact of the matter remains that many people live beyond their means and can therefore easily fall into this trap, which normally ends up in people seeking the debt relief of either settlement or consolidation.
The consolidation process of debt relief is quite often a particularly dangerous route to follow if one does not have the required self discipline that should come along with this, as well as electing for the wrong consolidation option. Consolidation is basically gathering all debts and placing into one account, and settling all the accounts that have now been put into one. This is where the danger may begin, in firstly the person who is consolidating their debts should close all those small accounts and ensure that they do not apply for or spend on any other accounts once these have been consolidated. Another danger is contained in the structure of the consolidation process that has been taken.
Should one have a large number of different debt accounts, some of which are almost paid off, the consolidation process of debt relief should not incorporate these almost paid off accounts, as in effect one would be extending the life of the debt, as well as increasing the amount of interest that is repaid. This is why consolidation is often times seen as one of the most expensive forms of debt relief.
There is a system that one can implement yourself in providing debt relief, which is relatively simple to get started. It does involve the necessary commitment as well as the active involvement in managing all accounts on a monthly basis. The starting point of this system is establishing a list of accounts, together with outstanding balances, interest rates and monthly repayments. The first goal is to pay the ones with the smallest amounts outstanding as soon as possible, whether it be by adding extra repayments to the monthly amount or even using some of a savings account.
As each account is settled in full, the next two steps are crucial. The first step is that the account that has been settled should be closed, and the second step is that the monthly repayment from the closed account now be applied to the next account that is being targeted for settlement. This will allow for the next account to be settled sooner, and then that monthly amount is applied to the following account. This strategy may come across as simple on paper, in terms of debt relief, but it will take hard work and commitment to achieve this, but is well worth the effort, and before you know it you will be able to make large payments on your mortgage and other bigger loans to be able to settle these accounts and be truly debt free.
