Creditor ABCs; Avoid Bankruptcy, Consolidate

Like the rest of us, most consumers are having trouble paying their credit cards bills. With the crumbling economy and unemployment rates soaring its no secret why a lot of consumers are falling more behind on their unsecured debts. More bankruptcies filed this year show that problem isnt going away and most likely will not for some time. Bankruptcy though, should be considered a last resort. Theres still hope with debt consolidation. A debt consolidation plan can be considered for the following situations;

Current on accounts and want to remain so but at lower rates

Less than 12 months behind on payments

Need to stop late, past due, and over limit fees

Stopping of harassing creditor and collection calls.

Looking to reduce balances owed at affordable rates

Avoiding bankruptcy and settlement programs to save your credit

Improving your credit score with timely payments and balance reductions

Developing a household budget, free budget counseling

The convenience of one monthly payment on a due date that works around your budget

A debt consolidation plan with a non-profit agency is always your best bet to avoid scams and profiteers looking to line their pocket from your financial misfortunes. Before committing to an agency, check them out with the Better Business Bureau.

A solid non-profit will go over your financial addendum, household budget, to assess your debt to income ratio on a monthly basis. A certified credit counselor will then review your accounts to consolidate and help make an affordable monthly payment based on your budget and coinciding creditor guidelines for payments. Some things to realize about consolidating your debts:

Accounts enrolled are closed - no more purchases

Current accounts remain current and do not hurt your credit once enrolled

Late, past due, over-limit fees STOP once enrolled

Interest rates are reduced to lower, fixed rates

Collection calls stop

No additional payments will be required outside your consolidation program

Past due accounts can be brought current after a few timely payments to rebuild credit.

Creditors only require consecutive monthly payments for these benefits.

All creditors require accounts enrolled into a debt consolidation program to be closed so you cannot charge on them any longer. Remember, you're looking to get out of debt- not incur more. If your payments have been on time prior to enrollment they remain so upon entering to ensure your credit score is NOT affected negatively. Creditor fees stop once the accounts are enrolled into the program and interest rates reduce down to fixed lower rates. With the stopping of fees and a reduction in interest rates, your balances are able to reduce nicely. Your monthly payment bringing the balance down helps improve your credit score and enables consumers to get out of debt within 4-5 years versus 20-30 years at your current rates and fees. A debt consolidation agency usually has a customer service department to handle your creditor calls and account inquiries. So, no more harassing collection calls either. Creditors only require the agreed upon amount negotiated by your consolidation agency. Those past due amounts will not be waived, but you will only be required to pay monthly whats been agreed upon on your behalf. If you enroll accounts that are already behind on payments most creditors have whats called a re-aging process. In this process, creditors will usually bring an account to a current, positive reporting status, after 4-5 consecutive monthly payments. This in turn, further assists your credit score increasing as you have more accounts reporting positive timely monthly payments.

While you may think the road to financial freedom can only be paved with bankruptcy there still may be help. Consultations on debt consolidation are free. Theres no obligation to receive free information. These benefits could be applicable to your situation and could possibly prevent tarnishing your credit with settlements or a bankruptcy. Call one of our certified credit counselors today for a free budget counseling session and debt analysis. 800.905.1563. If we cant help you with our non-profit services well point you in the direction of someone who can. Freedom Debt Management is a 501c3 non-profit organization recognized by the BBB as an A+ rated service.