Your credit rating is becoming obscene, your bills are out of control, you have more debt than you can face or ever hope to pay off, and you cannot sleep at night because of all of this. What to do. Well, the best way to approach this situation is to get some help in the form of a credit counseling service that can initiate bill consolidation and start to get you back on the right track financially so you can enjoy life again without the ever present upset stomach and headache.
There is a group of debt consolidating services called Consumer Credit Counseling Services that can take your debt, pack it into a lump sum amount, sort out your finances and then negotiate with your creditors directly for a repayment amount and plan; and after all that, they will formulate a monthly payment plan that you can handle. They take the monthly payment you agree to send to the company every month, and they divide it up amongst the creditors and slowly pay off each debt until they are eliminated. From that point on, they will help you construct a budget that keeps you on track and in the black.
Choosing a counseling company that you can work with is sometimes a daunting feat, but just keep your nose to the grindstone and do your due diligence, and you will find one that will understand your particular situation and regardless of credit standing, will be willing to work with you. Just be careful when searching, because there are tons of scam artists out there in this field, and they promise you the world but deliver little. One thing to remember; it is not a good idea to replace the debt you have with a new loan; the only time that would be an option is if the new loan had a fantastic interest rate, and your debts all had high ones—–then substituting a new loan would be workable because you would unload all your previous debt and save money in the process.
One of the pluses of bill consolidation, if it is done correctly, is to be able to improve your credit rating. To do this, it is best to work with a qualified credit counselor who can work out a payment plan with each of your creditors individually, you pay the debt company one lump sum and they dole out the funds to your individual creditors, giving them a letter of completion once the debt is paid off for each one. Once that is done, your credit rating will improve markedly.
Working with a credit counseling service can be a big plus for you if you are strapped financially, because they can take the worry out of your hands by setting up a bill consolidation plan and as a result, set up a monthly payment plan whereby you would pay them a monthly lump sum and they in turn would dole out the payments to your creditors after they had negotiated a payoff settlement agreement with the creditors. Because of this, sometimes the creditors will waive late fee repayment fines and as a result, save you money. Be aware, though, some counseling companies will charge you upfront fees because there are many people who will default on their agreement with the company and walk away. This way the company has a means of covering their losses, but there are equally as many that do not charge upfront fees, so again; research your choices carefully before you decide on one.
When you find you are in dire straits with your finances and you need someone to take the heat off and do a little negotiating for you with your creditors, then a counseling company is a good idea for working out the details of bill consolidation and getting you back on track. The counselor will assess your situation, negotiate a repayment amount and plan with each of your creditors, set up a monthly payment plan for you to pay to the company, and then set up a budget for the future to keep you on the straight and narrow financially. Even if your credit is bad, there are companies that will work with you and get you straightened out; it may cost you a little more in company fees because of your credit, but hey, that’s a lot cheaper than the hefty fees the credit card companies will slap on you if you try to deal with them directly.
Make sure that you include in your search for a counseling company, the fact that once they have cleared and eliminated your debts with your creditors, that they send a payoff letter and clear the account once and for all so that you cannot have the temptation of using those credit cards again. Once you have a cleared account, get rid of it so you will not run your finances out of control again, and this will also elevate your credit rating and make your life so much more enjoyable.
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