Many of these desperate consumers find themselves contemplating a bankruptcy filing, but bankruptcy can carry a legacy you will have to live with for years. A bankruptcy filing will stay on your record for a minimum of seven years, and you may find it difficult or impossible to obtain necessary credit in the interim.



In national accounting debts are added according to those who are indebted. Household debt is the debt held by households. "National" or Public debt is the debt held by the various governmental institutions (federal government, states, cities ...). Business debt is the debt held by businesses.

Debt consolidation allows a consumer to present their financial case to a lender who may be willing to take on the burden of paying off debts in exchange for one monthly payment made to the lender.

Tips on Selecting Debt Consolidation Services

So you've finally decided to use the services of a debt consolidation company. Good for you! There's no shame in admitting that you need help. But then what? Well, the next thing you should concentrate on is finding out how a debt consolidation company can help you best.

Types of Debt Consolidation Services

There are many ways a debt consolidation company can help you solve your financial obligations. The first and general step taken by debt consolidation companies is to merge or consolidate your loan. To what purpose that would serve depends on your present situation; you may either choose one, a combination of several methods, or all of the services they're offering. Take out all your pending bills and study them one by one. Identify the problem areas and see which of the following alternatives would aid you the most.

Lower Interest Rates ? Perhaps, the root of all your problems is the misfortune of being saddled with high interest rates. If so, a debt consolidation company will be able to assist you by negotiating with your creditors and asking them to lower the interest rate. Longer Payment Period ? Maybe you're having those panic attacks simply because the due date is always just fifteen days away? If so, a debt consolidation company can once more step in to the rescue by asking the creditors nicely about extending the term for your debts.

If you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a "debtor." If you fall behind in repaying your creditors, or an error is made on your accounts, you may be contacted by a "debt collector."

There are numerous groups, individuals, or products on the market that are designed to help individuals dig their way out of and recover from debt. Although these products are available, there are still thousands of individuals that choose not to receive assistance. It is true that some individuals may be able to recover from debt on their own; however, it will likely take a large amount of time and stress.

Your bank may be all too glad to lend you money to help you consolidate your debt. However, banks also charge application fees ranging from $50 to $200 or more per loan. In addition, banks make getting a debt consolidation loan difficult as approval for this type of loan is hard to get especially if your existing debt levels are high.

Debt is a hard thing to live with, reduce debts today! After you have contacted each creditor, you can start setting up a budget plan that will help guide you through the process of eliminating your debts. Start with a weekly budget plan and then work your way toward a monthly plan. You should know that in either situation, the Fair Debt Collection Practices Act requires that debt collectors treat you fairly and prohibits certain methods of debt collection. Of course, the law does not erase any legitimate debt you owe.

Considering filing bankruptcy? If your finances are in ruins and you're considering filing bankruptcy, there's a few things you should know.

Credit Counseling ? No clues at all about how to pay off your debts? Not to worry, because debt consolidation companies are pretty much experts when it comes to those things. They'll give you valuable advice not only on paying off debts but also on saving money.

Eliminating Calls from Creditors ? Have a hard time handling those nasty, high-pressured calls from your creditors? If so, let your debt management company do all the listening. With them to support you, you'll almost feel like there's no pressure to pay off your debts. But there is, mind you, and it won't do you good to forget that.

Other Kinds of Debt Consolidation Services

Lastly, when you've paid off your debt, a debt consolidation company may also offer other services that you could be interested in and will help prevent you from falling for the same trap in the future. Improving Credit ? Your credit rating has certainly taken a beating with the amount of debt you've run up. With the help of a debt consolidation company, however, you can slowly but surely build your credit rating, and maybe make it even better than before.

Money Management ? With them, you'll learn how to spend right and save more.

Another alternative is a Personal Loan or Debt

Consolidation Loan. This is one large loan to pay off smaller loans or debts. With one large loan, you will normally have a lower percentage rate and a longer pay off period.

In a credit card debt consolidation, your average interest rate may be reduced. All your loans can also be transferred to one single card that has a lower interest rate than the ones you are currently paying. In addition, the major credit card companies, at the urging of the Federal government, have recently doubled their minimum monthly payment to about 4% of the outstanding balance.

Reduce debts today for a better life! The first step toward taking control of your financial situation, is to do a realistic assessment of how much money you earn and how much money you spend. Start by listing your income from all sources. Then, list your "fixed" expenses ? those that are the same each month ? like mortgage payments or rent, car payments, and insurance premiums.