Bad Credit Debt Consolidation, How to Start

By: Geoff Kitkat

For many of us, getting into debt becomes a big merry-go-round of more and more debt. The more debt you have the more debt you seem to attract to you. In many cases this is due to the fact that you can no longer plan your financial life.

For the employed amongst us, this usually results in 'robbing Peter to pay Paul'. You borrow from this source to pay that loan, with the net result being that nothing actually improves; apart from perhaps you may be buying a few weeks grace.

For the self-employed, you lose the ability to plan the best use of your resources, with the end result being your potential future income will start to drop and you find it more and more impossible to plan your future.

There are a number of debt counselling organisations you could turn to, but be careful here. The last thing you want to do is to start spending money you haven't got, and better advice would be to either go and see your bank manager, or look at what you may be able to do by yourself.

A couple of ideas you may not have thought about. Most creditors, being businessmen, do not like taking legal action against anyone, or hound them. They are mostly all negotiators, so the first line of attack is to approach every one of your creditors, and see if they will accept special terms at least for a shorter period. This is especially the case if you have fallen behind due to circumstances beyond your control - a major illness, divorce, losing your job, or perhaps something more drastic like Identity Fraud, or some fraudulent actions towards you. If it is because you have been extremely reckless with your spending, you had better cut up your credit cards...

Creditors (well, responsible ones) will not force you into bankruptcy. Why? Because it would cost them money and unless you have masses of assets, they will get nothing. If they can help you back into a better income generating situation, everybody gains!

If that does not do the trick, although you can not easily reduce the actual amount you owe, there are a number of ways that can at least reduce your monthly repayments.

So, if you have read this far, you are probably very serious in getting out of your present situation. It takes guts - believe me - I have been there and dug my way out!

Start by speaking to reputable debt consolidation companies - use your bank or people you know who can recommend one to you. Their small monthly fees are nothing to the reductions in your monthly outgoings.

Your bank may even offer a low interest consolidation loan, or may even advise you to take out a loan against your property ( but only do that with advice - your home may be at risk if you can not meet repayments), but it can in many cases be a very low cost loan.

Whatever you do try to remove the reason why you got into this situation in the first place. Think about using cash as opposed to plastic - it can be a great feeling to pull fresh notes form your wallet , and a great boost to your self esteem!

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