Debt Consolidation: Do It Yourself
Debt consolidation is a big business,
especially on the internet. Companies advertise offering
to lower your payments by 50% and claim to be nonprofits,
giving consumers the idea that it will be cheaper
through them. Its not. Many firms offer a debt settlement
program in case you are unable to make the payments
calculated in their debt consolidation program. Some
say that they handle IRS debts and student loans,
as well.
Why are we so eager to hand our debt
problems over to someone else? Anyone with high school
math, actually 6th grade math is probably enough,
can calculate their own repayment schedules and pay
off their own debts if they choose. Anyone who can
use a telephone or write a letter can call the creditor
and ask about settlement amounts. Usually, the creditor
is at least as eager as you are to reach some agreement
and get the account off their books.
In order for any of these programs to
work, you also must learn to stop incurring debts.
That means: stop using your credit cards. Pay cash
for everything. That gets us to the place where we
are living within our means. The only debts that make
sense are secured debts. Secured debts are things
like car loans and home loans. If you are unable to
make the payments, there is some valuable property
that you can surrender to clear the debt.
Im not saying all debt consolidation
companies are bad. Theyre not. Some of them genuinely
work to help the consumer who is emotionally distraught
to the point that they cannot work out their own debt
issues. It helps to have someone to hold your hand.
However, to really end the problem for all time, you
must change your spending habits forever.
For real help with changing your spending
habits, we recommend Debtors Anonymous at Debtorsano
nymous.com. Good information can also be found
in How to Get Out of Debt, Stay Out of Debt, and Live
Prosperously by Jerrold Mundis or Your Money or Your
Life by Joe Dominguez. These and other self-help resources
will help you to correct the problems that got you
into these debts in the first place.
Celine Mettarod has been paying down
her credit cards bit by bit for a couple of years.
She predicts she will be completely out of debt within
3 years, including her mortgage. You can read more
articles about debt consolidation at For
Debt C onsolidation
