If you're buried in credit card debts and are struggling to keep up with your payments, you may be interested in finding out how much you can potentially save by consolidating your debts. Also known as credit counseling or a debt management plan (DMP), debt consolidation generally allows consumers from New York and across America to combine their high-interest debts -- such as credit cards and unsecured debts like medical bills, utilities, or department store charges -- into a single and more manageable payment plan.
The goal is, with a more structured and more affordable repayment plan, consumers in debt can direct more of their payment toward paying the principal of the debts versus just the interest -- thus reducing debts at an accelerated pace.
Debt consolidation, however, is not the only option available for New Yorkers who need debt relief. An alternative is a process called debt settlement, or debt negotiation. What debt settlement typically allows consumers to do is negotiate with their individual creditors for a substantially reduced amount of what they owe. Today, both methods -- debt consolidation and debt settlement -- are popular alternatives to bankruptcy, which has a more severe and longer lasting impact to one's credit score.
To see if you qualify for debt relief, request your free debt relief analysis and savings estimate today. Start here.
Why Consolidate Debts?
For many consumers, high credit card debt is not always the result of reckless spending or impulse buys. Rather, for many Americans, their debt crisis was likely the result of unexpected financial hardships -- like unemployment or unexpected medical bills. As mentioned earlier, one proven debt relief option is debt consolidation, or a debt management plan (DMP). The goal of a debt consolidation plan is to "consolidate," or combine, your unsecured debts into a single, more manageable and more structured monthly payment made to a credit counseling agency.
Coordinated by credit counselors, the debt consolidation process typically begins with a review of your income, outstanding debts, and other assets. This process allows credit counselors to fully understand your debt situation, the interest rates that you are paying, and the balances on your credit cards. Then, when they have a clear picture of your finances, they typically submit proposals to creditors, on your behalf, requesting lower interest rates and the waiving of late fees and penalties. Creditors that accept the proposals are then added to the debt management plan, and receive payment through the credit counseling agency.
Debt Consolidation Savings
For many consumers who have the discipline to monitor their budget and stop using their credit cards for most of their purchases, debt consolidation can likely help them get on a path towards reducing their debts and potentially lead to relief and savings. Keep in mind, however, that while it is the credit counselor's responsibility to request from your creditors a more lenient repayment plan, it remains your responsibility to ensure that you have the funds available in the account set up by the credit counseling agency.
In addition, make sure that you understand how much savings you can potentially get, every month, when you consolidate debts. Typically, your savings depend on several factors: the total amount of your debts, the current interest rates, and any late fees or penalties.
The bottom line is, if you are ready to pay down your credit card and unsecured debts, take the next step and find out what consolidating your debt and debt relief can do for you and your family. To explore your debt relief options, request a free debt relief analysis and savings estimate -- at no cost to you. Start now.