Date:
6th December 2007
Headline:
The Dummies Guide to Debt Management
Contact:
Stephen Morgan
Address:
4 Dillons Court, Whiteabbey, Northern Ireland
Phone No:
+441 2890 853008
Alternate Phone No:
-
Email:
URL:
Summary:
Debt Consolidation is on the rise but by and large debt consolidation is more expensive than the original debt itself. It is very much a case of buyer beware
Content:
Hmmnnn…., this old gag rears it’s ugly head on a regular
basis. The truth of the situation (and here speaks someone who has gone through
the mill on this one, come out the other side minus most of his shirt but still
alive and kicking) is that this is only partly true.
The plain cold hard truth here is that Debt Consolidation can be dangerous
because you treat only the symptom. If you have a raging balance of payments
problem that would shame a third world banana republic and you haven’t come to
terms with this fact then Debt Consolidation is only going to provide temporary
relief. Without coming to terms with the cause of how you got into the debt in
the first place it is a bit like trying to effect the repair of an amputated
limb with only sticking plaster and no anaesthetic - it’s going to be extremely
painful and have no prospect of long term success.
Hmmnnn…., this old gag rears it’s ugly head on a regular basis. The truth of the
situation (and here speaks someone who has gone through the mill on this one,
come out the other side minus most of his shirt but still alive and kicking) is
that this is only partly true.
The plain cold hard truth here is that Debt Consolidation can be dangerous
because you treat only the symptom. If you have a raging balance of payments
problem that would shame a third world banana republic and you haven’t come to
terms with this fact then Debt Consolidation is only going to provide temporary
relief. Without coming to terms with the cause of how you got into the debt in
the first place it is a bit like trying to effect the repair of an amputated
limb with only sticking plaster and no anaesthetic - it’s going to be extremely
painful and have no prospect of long term success.
So what is Debt Consolidation?
Debt consolidation is when you roll all of your smaller individual loans into
one large loan, usually with a longer term and a lower interest rate. Note that
this does not entail or require you getting a NEW loan at a sexier interest rate
and longer term etc. Debt consolidation is the process of combining many
existing loans into a one single process and several smaller payments to your
creditors.
What Debt Consolidation is NOT is the process by which a consumer exchanges one
loan for another taking various factors in to consideration.
Debt Consolidation and Credit Counseling can help you become debt free. To do so
however requires that you must understand some basic consumer credit counseling
and debt consolidation credit counseling. There is also a price to pay for being
able to achieve this.
What is this price?
Well to be brutally blunt your credit record is going to tank big time in the
short term. Don’t believe people when they promise otherwise. It isn’t going to
happen. Now I know this is a bit like watching a sports programme on TV when the
Commentator has an outbreak of Commentators curse and the unexpected happens. In
this case this is where some old and wizened debt ridden character emerges from
round the corner to proudly declare that their credit rating and record has
never been better.
Sorry folks but there is no such thing as a free lunch in this case. Now this
should serve as a warning to people who blindly believe that any debt
consolidation firm can solve their problems. With a debt consolidation program,
you make just one payment per month at a reduced rate.
If you adhere to the Consolidation programme you have managed to set up and the
payments go through smoothly then after a while your credit record will start to
show regular payments but the initial defaults will be on your file and will
show up for anything between three and six years depending on the financial
jurisdiction that you live within.
This may well preclude you from taking advantage of the juicy offers in the
Sunday Supplements etc but that may not be a bad thing either.
Resource Information:
For further information on how positive changes in your lifestyle can help lower your outgoings and debt liabilities then visit Debt Consolidation