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Debt Relief – Insolvency – Bankruptcy Information » Debt Consolidation and Refinancing » i need to get out of debt – how do debt consolidation companies work? and do u recommend them?

i need to get out of debt – how do debt consolidation companies work? and do u recommend them?

i have combined credit card debt of like 7000 and i am not being able to make payments. i need to move out of my parents hostile environment.. would consolidation be my best bet?

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3 Responses to "i need to get out of debt – how do debt consolidation companies work? and do u recommend them?"

  1. Heather says:
    No debt consolidation would not be your best bet and you are not going to be able to move without credit. Myth: Debt consolidation saves interest, and you have one smaller payment.
    Truth: Debt consolidation is dangerous because you treat only the symptom. Debt consolidation is nothing more than a “con” because you think you’ve done something about the debt problem. The debt is still there, as are the habits that caused it – you just moved it! You can’t borrow your way out of debt. You can’t get out of a hole by digging out the bottom. True debt help is not quick or easy. Debt consolidation seems appealing because there is a lower interest rate on some of the debt and a lower payment. However, in almost every case we review, we find that the lower payment exists not because the rate is actually lower but because the term is extended. If you stay in debt longer, you get a lower payment, but if you stay in debt longer, you pay the lender more, which is why they are in the debt consolidation business. Your best bet would be to get a job, stop using your credit cards, and pay down the debt. It will cost you less the quicker you can pay it off. Debt consolidation will trash your credit score.
  2. Michael Allen says:
    If you’re planning on moving out and stay on top of your bills then yes, definitely consider consolidating your debt. Find a good monthly payment that will enable you to make your payments and still live. Do some research on various debt consolidation programs and find what is the best fit for you.
  3. phxaz says:
    Do not take out a consolidation loan because you will then have $7000 worth of credit space and you will rack it back up then you will be $14,000 in debt (everyone says they wont..but they always do). The better thing to do is go through a credit counseling program. they will cut your payments in half by making a deal with the credit card companies. This will lower your credit score at first but it will actually get higher later from doing this. If you need to move out of the house fast, just move in with a friend or look in the classifieds for people that are renting out a room in their house for like $100 per month. Stay there until your debt problem is cleared up.

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