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Debt Consolidation, Debt Settlement, Debt Relief - Options or Mistakes


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These are all “buz" words and pitches you will see in marketing for Debt Consolidation, Debt Settlement and Debt relief programs. As each have their own pitfalls and uprisings, I think it is important to point out each of their short and long term impacts. In order for a consumer to make a well thought out decision, they need to be full disclose all options available, and not wait for that lottery ticket.

* Debt Consolidation Loans:

Because these loans are usually taken out to get lower interest rates and to lower your monthly outgoing expense the money will most likely go to a credit card company or several, all of which are “unsecured debts". In order to get this debt consolidation loan your going to need to use a personal item as security, ie “to make sure the loan gets paid back". This security will probably be your home or its equity. Lets look at this under the light without the pressure of the loan officer.

Your home is yours, LEAVE IT ALONE. What is going to happen if your late 3-6 months on a credit card? They are going to call and bother you send you to collections where you going to be able to work something out. What happens if your late on your mortgage payment? They will foreclose and you loose the home. If your reading this as a consumer, looking for help with your debt, you must know that you can not borrow your way out of debt. Trading your unsecured credit cards for your mortgage is not wise or recommended. If your worried about your credit, ask yourself this; what credit report I have a debt report. By now, given your current debt loan you know life happens and some time is is wonderful and some times it hurts real bad. Don't make it worse by handing the keys to your home over to the credit card company for a debt consolidation loan.

*Debt Settlement:

Debt Settlement is real simple, just know the facts before you jump. First, before you can join a debt settlement company that has your best interest in mind you will need to go through an application process. This should include a complete review of your finances. If you can no longer maintain the obligation to the banks your most likely a candidate for debt settlement. But make sure the company takes you through what is called “FELL DISCLOSURE". During this period you must be given full access to the facts in debt settlement. If they do not do this, thank them for their time and hang up the phone. The agent or officer of the company needs for the consumer to fully understand this process. The consumer will get lots of collection calls, it will impact the consumers credit report short term, the accounts could continue to incur interest and late fees, the account could go to further collection efforts that include a law suit. Most consumers who get into trouble in a debt settlement program did not have to right payments schedule set up. The agent needs to spread their fees out long term rather than all or most of their fees up front. This allows for the consumer to save for debt settlement, this eliminates most if not all law suits. It is proven, that with good direction debt settlement is a viable, swift option for debt relief. With the right approach your creditors can and often will settle for much less than what you owe.

Credit Counseling:

- Just look at the obvious here. Less than 30% of all enrolled actually finish the program. It lowers the interest, MAYBE, Your in the program 5 years, and you pay 100% of what is owed. It reports to your credit file that you have hired a credit counselor to manage your finances, and your not allowed to to any financing during this period of 5 years. No cars, homes, new bank accounts, no credit activity at all. These can be grounds for termination of their services. Who pays them? Your bank! the company you ow money to. Where do they get the money? From you!

When making the decision to become debt free through either debt consolidation , debt settlement or CCCS, what program really has your debt deduction goals in mind?

Absolute Debt Solutions was established to make a positive impact in people's lives by freeing them from the burden of debt. The debt management programs we can offer are designed to help people become, and continue to live debt-free. We do not and never will outsource, sell or share your protected information, and are committed to providing all of the information, support and guidance you need.

Tom Bates, CDA
CEO - President
Absolute Debt Solutions
901 South Mopac Expressway
Barton Oaks Plaza Suit 300
Austin, Texas 78746


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