Consider a Consolidated Debt Plan

A debt consolidation plan lets you manage your finances without a consolidation loan and without declaring bankruptcy. This may be appropriate if you are having trouble meeting the minimum monthly payments on your bills, and/or feel you are slipping further behind each month.

Consolidation of credit card debts and unsecured loans makes rapid debt reduction possible. A debt financed at 8% or lower is much easier to pay down than is a 22% credit card interest charge. In some cases, the negotiated interest charges on consolidated debts may be brought down to nothing.

A reputable debt counseling organization will provide professional budget and credit counseling. They will answer your financial questions, and recommend steps to resolve financial difficulties that may be preventing you from making the most of your life.

In many cases you can save your financial resources for yourself and your family. A reputable Credit Counseling Group will address all of your unsecured bills, negotiate with all of your creditors for new interest charges and terms, and perhaps make it possible for you to make a single monthly payment towards satisfying your obligations, while allowing you to maintain a comfortable household budget.

If you qualify for such a plan, you may restructure your debt with existing creditors without transforming unsecured debt into secured debt. (See Consolidation Loan article). In fact, secured debt such as a typical mortgage or automobile loan is generally NOT included in a debt plan. Unsecured debts, usually credit cards, student loans, bank lines of credit, medical bills, department store credit cards and collection agency accounts, are more typically the kinds of obligations considered for a consolidated debt plan.

Under a consolidation plan, loans are NOT made and all existing creditors remain the same. However, interest payments due creditors are re-negotiated, lowered or completely eliminated to allow more principal to be paid each month. In fact, debtors may cut their monthly interest costs by as much as half what it had been before the implementation of the consolidation plan.

This is the primary reason why someone pursuing quick debt reduction is able to get out of debt in only 3-5 years on average – much preferable to the 10 or 15 years a consolidation loan normally takes.

Some of the benefits of a debt consolidation Plan can be:

· Lower or eliminated interest charges

· Lower total monthly bill payments

· Eliminate late charges or skipped payment charges

· More principal is paid each month

· Improved credit ratings

· End collection agency contacts

· A convenient, single monthly payment

· Avoidance of bankruptcy

· Free budget and credit counseling

· Professional, personal service

Please also review related articles.