If you find yourself overwhelmed in personal debt, rest assured you are not alone. In fact more than half of the US population is struggling to pay bills that have spiraled out of control. But it doesn’t have to be like this; you do have options. Debt Assistance Programs have been developed for people just like you. These programs come in the form of debt consolidation and debt relief services. These debt assistance programs are run by companies that can help you dramatically reduce or get out of collection debt in no time at all.
Most debt assistance programs deal with unsecured debt, primarily credit cards, but also business debts, medical bills, both federal and non-federal credit union accounts, and unsecured personal loans. You usually have to have a minimum of about $10,000 of unsecured debt to qualify for this program assistance. And what happens is that the bank or company that you choose, bundles all credit card and loan bills into a single monthly payment at a reduced rate. This company pays off your debt and then it will require you to pay it back at a lower interest rate. This interest rate should be somewhere around 5%, which is a lot better than the 20 or 30 % interest you are undoubtedly paying on your current credit.
Debt consolidation offers all Americans with credit and loan debt a way of getting their finances back on track and is a great alternative to bankruptcy. Bankruptcy will do serious damage to your credit. In fact, most financial institutions will not even consider any types of credit application for a minimum of 3 years afterwards, and the filed bankruptcy claim will linger on your credit report for up to 10 years, or possibly longer.
If your credit rating is already hurting from past negligence in bill payments, debt consolidation through debt assistance programs is also a great way to rebuild a good rating. The lowered monthly payments will allow you to be consistent in paying your bill and lowering your debt. This payment pattern will start to restore your positive credit.
Almost all types of creditors participate in debt consolidation programs. For instance, if you owe money to Visa, MasterCard, Discover, department stores, hospitals, student credit bureaus and even the IRS, you can consolidate for one easy monthly payment.
And keep in mind that the best debt assistance program is one that combines ALL of your debt into one. Other things to consider when settling on help from debt assistance companies are:
- A lower interest rate
- One monthly payment with fewer, or at least no additional fees
- Flexibility in the amortization of the loan: Choice to extend the payments to make them smaller each month ; or shorten the payments to pay off the debt more quickly