If you are living paycheck to paycheck with most of your earning going towards debts, a debt consolidation program is a good place to start to make yourself debt free. These programs are created to help you pay off past due debts in a shorter period which will allow you to have a brighter financial future. Being debt free is the goal of most people who are buried in debt, the path to debt freedom however isn’t always very clear.
Programs for debt consolidation help lower the total amount due to your various creditors and thus increase your savings while lowering the overall re-payment time. You can start in a program with the help of a professional or on your own. Regardless of which way you start, your first step is learning the various types of debt that are eligible for legal consolidation.
People who opt to start a real debt consolidation programs are given easy plans that offer real value. These plans also don’t use bankruptcy as a way out of debt; instead, they use many types of settlement strategies to cut the amounts owed to make the payment more manageable. By using these strategies, a person can be debt free in as little as two years.
To start, you should contact a reliable company that specializes in debt consolidation. Sit down with one of their arbitrators for a one on one, in person consultation. During the consults, you will go over all of your bills, recurring payments and other expenditures to get a full assessment of your financial status. It can be hard to talk to one on one about something as personal as finances, but getting to a point where you are debt free is worth the discomfort.
Prior to meeting with your arbitrator in person, you can send in your statements, bills, collection letters and other financial information via fax or email. Giving them permission to run your credit is another option to aid the debt consolidation process, but if you have a recent copy of your credit report, you may also submit that to reduce the inquiries on your record.
After reviewing your documents and speaking with you about any other financial limitation you may have, they will go over the various programs available that fit your situation. Debt consolidation may not be the best option in all cases, so keep that in mind before submitting your information.
If debt consolidation is a good option to make you debt free, the arbitrator will usually call you into the office or send you a written agreement for your signature. This agreement details their fees, timelines, intentions and expectations about your debt consolidation program. It will also list your responsibilities toward the effort such as paying any reduced or periodic payments on time or not increasing your existing debt by opening new lines of credit.
Once you sign, the company will open an account or trust under your name in which you will need to place half of the total amount of your debts. This amount is the total of all your debts that qualify for the program so make sure you have cash on hand before entering into an agreement. The debt program arbitrator will then start contacting and negotiating settlements on your behalf with your various creditors. You don’t have to worry about payments since the account in which your deposit was placed will be docked when agreements are reached with your creditors.