Debt Consolidation Primer - Four Things You Can Do to Get Out of Debt


Problem debt is rampant throughout America. In addition to mortgages and auto loans, the average household in the U.S. has nearly $10,000 in credit card debt. As the major credit card companies have recently doubled their minimum payment requirements, now is a good time to outline the various options available to most consumers who have more debt than they can handle.

  • Stop spending money on nonessential items. "Nonessential" is difficult to define, but it more or less means anything that isn't absolutely necessary to live. Phone bills, mortgages, and groceries are essential. Lattes at Starbucks, satellite television, and meals from fast food restaurants are not. By cutting out all extra spending, you can probably save several hundred dollars per month. That money can be used to reduce debt.
  • Consolidate your debt. If you have more than one credit card and your accounts aren't all at their limit, you can transfer balances from higher-interest accounts to those with lower interest accounts. Alternatively, if you own a home, you probably have accumulated some equity. You can obtain a home equity loan or line of credit and transfer some of your debt to that loan. As a bonus, the interest on home equity loans is tax deductible. Be careful, though. If you transfer your debt to a home equity loan, you can lose your home if you do not repay it.
  • Find a reputable credit counselor. This will soon be a prerequisite to filing for bankruptcy, thanks to a recently passed Federal law. Counseling agencies can negotiate with your creditors to help you establish a repayment plan that you can afford. They may be able to have interest rates reduced or have late fees waived. Most agencies charge for their services, but the reputable ones limite their fees to what you can afford to pay.
  • File for bankruptcy. This is not a decision to be taken lightly, as a bankruptcy filing will remain on your credit record for ten years. By filing for bankruptcy, you declare to the courts that you cannot repay your debts. Most consumers are currently allowed to file under Chapter 7 of the Federal code, which allows the courts to wipe out most debts. This will change this fall, as recently passed Federal legislation takes place. The new regulations will likely require a repayment schedule, and attorney, and higher filing fees. Bankruptcy can help you get a fresh start, but it's not a magic solution. It will be quite difficult to reestablish credit after a bankruptcy filing
  • Having more debt than you can handle is a serious problem, but like most problems, it is one that has available solutions. The first step is to act promptly, as unattended debts only grow larger. With time, patience and diligence, most consumers can overcome the burden of excessive debt.

    ©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to establishing credit, debt consolidation and credit counseling.


    MORE RESOURCES:

    DebtConsolidation.com Helps Over 100000 Consumers Choose the Best Debt ...
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    Debt Guides to Tomorrows Future
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    Debtconsolidation.com Affirms Its Lead in Providing Credit Card Debt Relief ...
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    Debtconsolidation.com, an information and referral source for debt management and credit counseling, cements its key position as a top debt management service provider after successfully helping 100000 consumers take control of their financial issues.

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    P323.4 billion Domestic Debt Consolidation Program Deal Managed by First Metro ...
    MarketWatch (press release)
    Manila, May 15, 2012 (ACN Newswire via COMTEX) -- The Philippine government's P323.4 billion Domestic Debt Consolidation Program won The Banker Magazine's Deal of the Year 2012 for SSA (Sovereign, Supras and Agencies) Bonds category in Asia Pacific.

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    Seven Real Tips for Getting Out of Debt and Avoiding Debt Consolidation Loans ...
    Seattle Post Intelligencer
    Many Americans continue to struggle with repaying debt and look to debt consolidation loans as the only option. Yet there are many other ways to reduce debt while maintaining credit and the little extras in life. As the numbers for consumer spending ...

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    Brenda Shanahan: Four types of debt problems
    Montreal Gazette
    I am wondering if you know any good accredited debt consolidation company that was reliable and could reduce my debt and stop interest? V Dear V, Yours was one of many emails and calls that I received following my column of May 15 regarding the dubious ...

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    No surprises in port budget
    Siuslaw News
    New port manager Robert Forsythe said at the budget meeting held earlier this month that the port is seeking debt consolidation, primarily to restructure an interest-only loan for 40 acres in the Pacific View Industrial Park. A $250000 balloon payment ...



    Credit Unions Online

    Sinking in Debt? Skip Debt Consolidation Companies and Head to a Credit Union
    Credit Unions Online
    Musser says that a debt consolidation or management company may help you reach a settlement where you end up paying less than what you owe, but the work done to whittle down the debt may have a negative impact on the consumer's credit score--which ...

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    Drawbacks to using debt consolidation companies
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    "There is no magic bullet," said credit counselor Richard Musser. "It's going take time. If you got yourself into a debt situation, it's going take time to undo it." Consumers can reach settlements with creditors for less than what they owe, ...



    Westerly credit union coaches students on finances, living within their means
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    The average person in their 20s now carries some $45000 in outstanding debts, according to Debtmerica Relief, a nonprofit debt consolidation organization. By 28 or 29, that number soars to about $78000, for such things as student loans, ...


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