Debt consolidation companies can and have provided excellent services to thousands who have had severe credit card debt and who were suffering financial problems as a result. However, these services are not free and also many people don’t like the idea of handing over their personal information to these companies. The solution: DIY debt consolidation.
With the state of the world economy at this time and the effect it is having on peoples’ lives, it is little wonder that so many more people are now considering debt consolidation as a means of relieving the immense financial pressure that many households are reeling under.
The problem is that many are overwhelmed by the choices available to them. There are literally thousands of debt management companies, consolidation loan providers, credit repair specialists and every other variation of ‘problem with personal finance’ dealing companies!
Many of these companies do not make things as clear as they should and provide little in the way of information regarding how they do what they do, and behave as if it is a closely guarded secret yet they expect you to disclose every single financial detail so they work their magic.
This isn’t to say that some of these companies don’t do a terrific job, because they do, but why all the secrecy over the methods they use?
Quite simply these companies are protecting their interests, there is nothing these companies provide or do that you couldn’t do yourself; and for no fee!
Has the penny dropped?
There are advantages and disadvantages to dealing with your own debt consolidation and management but the first thing you should do is seek the advice of a free credit counseling service of which there are many.
When dealing with a credit counselor remember not to withhold any financial details, if you are going to tackle this problem yourself you have to deal with it honestly.
It’s always worth remembering that there are free resources available for practically everything you will ever need to know and on every subject matter; including personal debt. Use these free resources, they will be invaluable and the last thing you should be doing when it comes to something as important as personal debt and debt consolidation is winging it!
You should always start by assessing your situation, how much debt you have, how old each debt is and whether or not the debt is still with your creditor or whether it has been passed onto a debt collection agency.
You should then prioritize your debt, any debt you have that is secured on property or possessions will be your main priority. Correctly dealing with debt in a methodical fashion will not result in the loss of anything you have used as collateral.
Do not give in and make payments to companies that constantly pressurize you that are not as important as those that are not constantly calling you. Do not be swayed from your plan.
As soon as you have a clear picture of your situation start to use the free resources and advice received to contact your creditors to begin the negotiation process. This process is not as complicated, or as time consuming, as some debt management companies make out and can often be quite a speedy process.
If you have concerns about calling your creditors because you feel you may be pressured into accepting an offer that may not be as good as the one you need you should consider contacting your creditors by mail. It may take longer but it will have the same results as well as providing you with a written record of negotiations and agreements that will help to avoid any possible future disagreements over what has been agreed and what has not.
Conclusion: Taking control of debt consolidation yourself can be an uplifting as well as being a little more stressful way of dealing with your debt than having a debt management company do it for you, but you save money have complete control and have a valuable education into negotiation techniques and methods and a better understanding of credit and debt consolidation that you can share with friends and family who are facing similar problems.
(Author: Daniel Major – Published: September 25, 2009)