subject: Have You Heard The Latest About Bad Debt Consolidation [print this page] Bad debt consolidation loan applications are on the increase. Many have put a lot of money on their credit cards and are looking for some relief. One way out of course is through bankruptcy, but this must be a last resort.
The bankruptcy rules have changed recently. It is not easy to have one approved by the court. The filing must include financial records will be examined carefully. If the court determines that the petitioner has reasonable means to pay back the debts, the filing will be turned down.
Even if it approved, it will leave a stain on a person's credit report for up to ten years. For many, debt consolidation is a better choice. There are many companies that will work with credit card companies on behalf of the debtor to arrange a more reasonable payment plan, one that will leave money at the end of the month.
Many people can pay something on their credit cards, but they are left with no money at the end of the week for the necessities of life. A consolidation loan, for some, means no more stressing each month to barely make their payments. Some consolidation companies will arrange a debt repayment schedule. They will be paid by the client and then the loan company will pay the credit card companies.
People have to make sure that the consolidation company pays all the credit card bills each month. It is the responsibility of the card holder to make the payments, not the consolidation company. A missed payment will still go against the card holder. It is also important to figure out the interest rate offered compared to what the person is now paying.
If the debtor has five credit cards with an average interest rate of twenty percent and the loan company will charge eighteen percent on a consolidation loan, then this could be a good deal, but some companies also charge a monthly service fee. This therefore, has to be taken into account to see if the deal is a good one after all. Many people like the idea that they will now have one payment to make each month rather than multiple payments.
For some this is a psychological benefit that might be worth a service charge, or a slightly higher interest rate. Some simply need a lower payment and are willing to have to pay for a longer period of time, in order to have money left over at the end of the month, rather than paying their current credit card payments, and having no money left. There are many companies advertising consolidation loans.
