Most people have at least heard something about debt consolidation programs.
As our national debt load continues to rise even as the economy weakens, all too many consumers find themselves unable to meet the minimum payments on the debts that they have accumulated.
There are a number of different solutions to this problem, all of which fall under the vague heading of 'debt consolidation', but, still, even though they know they may soon need their services, borrowers keep their heads in the sand and do not investigate alternatives to their crushing financial burdens.
Debt settlement is quickly becoming the most advised option within debt consolidation - it does not have the negative credit report and FICO score consequences of Consumer Credit Counseling nor the most dangerous aspects (foreclosure from unpaid mortgage bills) of home equity loans.
Debt settlement professionals attempt a negotiation with the credit card companies and various lenders on behalf of their client debtor to try and resolve their disputes by essentially trading the guarantee of a strictly followed repayment schedule in exchange for an overall lowering of the total debt balances.
It's an exceptionally useful program for borrowers that have an income supporting such a plan and lenders that are institutionally agreeable to such negotiations (over three quarters of credit card companies do traditionally work with debt consolidation professionals but some of them, fewer every day, still refrain from settlements).
The creditors, after all, know that every borrower could potentially file for Chapter 7 bankruptcy protection and leave them with no access to the money that has been borrowed.
The debtors, meanwhile, do not have to risk the seizure of household goods and destruction of their credit that bankruptcy declarations eternally threaten.
For anyone with significant unsecured debts that they feel they cannot easily repay, looking into the debt consolidation programs should be of the highest priority.
Fortunately, the internet and world wide web now allows time-poor debtors (who are often working several jobs) to seek out their different alternatives online.
It's important to talk to the debt consolidation specialist one on one at some point so that they can examine the details of each case, but, before any of that happens, there are still aspects that each borrower can initially look for within company practices.
After all, as with any financial industry, not all debt consolidation firms are built the same way.
They all have different prices, expectations as to expected interest rates and savings, and they operate with different rules - also, it's important to get an idea of the term of repayment (generally under five years) so that the monthly payments do not force unnecessary deprivations upon the client family.
Potential clients should be sure to talk to a number of different firms so that they get an idea of the accepted practices across the debt consolidation industry.
For instance, some predatory firms hide their fees within small print additions such as transfer charges or advance fees that are never fully explained by the debt consolidation counselor.
The debt consolidation specialist should be certified, of course.
It's also always a good idea to check with the local chapter of the Better Business Bureau just to make sure that the companies you are considering working with has a good reputation within the community - the Better Business Bureau keeps a record of past criticisms from clients on hand for appraisal.
There is, after all, your future at stake.
An unethical - or, almost worse, an unethical - debt consolidation company could jeopardize potential home ownership, student loans for your children...
in the worst case, for borrowers not properly informed of their roles, there could be charges of fraud.
These sorts of companies wither and die from accusations of malfeasance, and borrowers shouldn't have to worry about any troubles with firms that have a history of fair and successful business practices.
Debt consolidation is a new industry and one that is borne upon word of mouth.
At the same time, just because somebody's uncle glowingly referred to his treatment by such and such firm, make sure that you yourself feel comfortable with the debt settlement negotiator.
He will be the one representing your needs, and you do not want to go to war with anyone that you do not entirely trust and respect.
In addition to shaving off debt balances, lowering interest rates, and making sure that the debts are paid within a reasonable amount of time, the debt consolidation specialist should also take the time to help you design a household budget both fair and livable as well as provide information about how to stop problem spending and begin to save for future calamities.
A good debt consolidation firm will not only eliminate any financial burdens that you currently face but also retrain lifestyles to prevent similar burdens from ever returning.