The Debt Consolidation Store - Debt Consolidation Firm

Debt Consolidation Firm

Sure, you can go to a law firm to get out of debt. But the only way a law firm can get you out of debt is by handling your bankruptcy claim. And if you file for bankruptcy, that's a huge black mark on your credit for ten years. A debt consolidation firm can provide you with far more options than that, and they won't damage your credit the way bankruptcy does.

Programs Offered by a Debt Consolidation Firm

There are several different ways to get out of debt besides filing for bankruptcy, and a debt consolidation firm can offer them all. Here's a brief outline of the most popular programs:

Debt Consolidation - A debt consolidation company negotiates with your creditors to get your unsecured debt balances and interest rates lowered. Then the new, lower balances are combined and you make one monthly payment to the debt consolidation company, which they distribute among your creditors. Because of the reductions, you can become debt free in about five years.

Debt Consolidation Loan - A loan given to you to pay off your unsecured debts. You pay off your unsecured debts immediately, but you still have the loan to pay back. The benefit is that the interest rate on the loan is so much lower that you can have it paid off in five years or less.

Debt Consolidation Mortgage - Allows you to borrow from the equity in your house to pay off your unsecured debts. Your payment is combined with your mortgage, and you get the same interest rate as your mortgage. In some cases, the interest is even tax-deductible (check with your tax advisor to see if this will work for your tax situation).

Student Loan Debt Consolidation - Combines all of your outstanding student loans into one and locks in a much lower, fixed interest rate for you. Your monthly student loan payments are cut in half, too, because you are given more time to pay them off.

In addition, once you sign on with a particular debt consolidation firm, any harassing calls and mail you may be getting from your creditors will cease to exist. They will also suggest that you get some credit counseling to go with your debt consolidation program. That way, once you get out of debt, you can stay out for good.

Looking for a Good Debt Consolidation Firm

A good debt consolidation firm doesn't have to be hard to find, but you do have to do some research, just as you would have to do with any important financial decision. A good place to begin your search is with your creditors, the Better Business Bureau or one of the three major credit reporting agencies (TransUnion, Equifax or Experian). Call any of these and ask if they can recommend a good debt consolidation firm.

If you're not comfortable with that, try searching the Internet on the term debt consolidation firm and see what you come up with. Most of the time, each debt consolidation firm you find will have a form on their web site that you can complete and submit to give their debt management professional an idea of your situation so they can return the appropriate recommendations to you within 24 hours. Compare these recommendations and get a feel for which debt consolidation firm you are most comfortable with.