How To Use Debt Consolidation To End Collection Calls

Deep in debt is not a good position to be in, still many people find themselves in precisely that situation in these economic days, often through nothing that was their own fault. When you take out a loan or a mortgage, you do not count on the fact that you might be laid off from your job before the loan term ends, or that you might be going through a tough divorce, or rack up high hospital bills, or various other possibilities.

One of the unfortunate things that occurs as you get further and further deliquent in your bills is that you start getting telephone calls at home from collection agencies. These are not usually social calls by any dream you might have, but are really firm, sometimes approaching rude or even threatening, with many of the callers leaving you with a mental picture of the call coming from The Godfather headquarters.

Assuming your total debt is not yet at the point of thinking about filing bankruptcy, you do have another alternative, and this alternative has really been beneficial for many individuals in this unfortunate position did not even know that this alternative existed for them.

That choice is debt consolidation. No, it is not yet another personal loan that you would tell the loan company or bank you are going to use for the purpose of debt consolidation. While that may be an option, that approach is really only borrowing from Peter to pay Paul, and does next to nothing to assist you with your overload of debt.

Rather, debt consolidation is a service whereby you turn all your bills over to the debt consolidation company, and they in turn negotiate with your creditors to lower interest rates, lower payments, sometimes even being able to get late fees and over-limit fees removed.

But the element to remember here is that they do not payoff your loans for you. All your debts are grouped into one bundle, and you make one payment to the debt consolidation company every month, and they in turn make payments to your creditors. If you overlook your payment to them, they will not make a payment to your creditors that month, which could put you in an even harder position than you are in right now.

The huge advantage to you is that the sum total of your monthly payments is drastically reduced, which has the very beneficial result of providing you some very welcome financial breathing room until you can get your financial act together again. For instance, if you were paying out $3500 each month on all your bills, chances are high that your single payment to the debt consolidation company might have that payment under $2000 or even less, and still keeping your creditors satisfied. This likewise helps with your credit score, since from a credit reporting standpoint, it looks like you are making your payments on time, which is the single biggest thing you can do to increase your credit score.

And naturally the added advantage is that when you are making your payments to your debt holders every month by your debt consolidation program, you will no longer be those harassing, annoying, embarrassing, and occasionally scary telephone calls from the collection agencies.

Consider debt consolidation and see if it is the right answer for you. Once again, it is really much preferred than the extended negative effects of bankruptcy, and can assist you to get back on the right financial road.