Debt Consolidation

There is no doubt that if you are carrying a burdensome amount of credit card debt you have heard about or perhaps even looked at debt consolidation.

In as few words as possible. Don't do it!

There are better ways to get out of debt without bringing a third party into the equation. What a debt consolidation company is going to do is this. They are going to negotiate settlements with all of your credit card companies and pay off the balances. Then you are going to make one payment to the debt consolidation company to pay them back for the amount they paid for you. Sounds good on the surface but on top of that, you are going to pay the debt consolidation company their fee for their service plus the interest rate they choose to charge you.

The bottom line is this. Everything that the debt consolidation does for you, you can do yourself and save yourself A TON of money.

Credit card companies are not going to settle an account for less than owed unless the creditor is behind on payments. Hence, your credit has taken a major hit already and there is nothing the debt consolidation company can do about this. After missing several payments, the credit card company is going to be just as willing to settle your account with you as they would with a debt consolidation company. Maybe even more so with you.

For the purpose of this article we are assuming that you are already behind on payments. Make a contact list of all of your creditors and start the process of making phone calls. Get your call routed to the appropriate department and start talking! You will be surprised at how willing the credit card companies are going to be to work with you. If you are able to negoiate a settlement for an overdue account, remember these 2 things.
1. Get everything in writing before you send any money and make sure the words "Settlement in Full" is in writing on the document.
2. Never give electronic access to any accounts. Make any and all settlement payments with cashier checks and keep copies of EVERYTHING in a safe place. You may need it at some point.

Obtaining settlements from credit card companies can be tedious, frustrating and time consuming. This is why many people opt for a debt consolidation company. Look at it this way. If it takes you 100 hours of work and you save $5,000, you have in a sense, just made $50 an hour for your part time work. Well worth it for most of us. So before debt consolidation and/or bankruptcy, look into settling your accounts on your own, you can always opt for the latter choices down the road if you think you must.