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Debit Consolidation

You know you’re in trouble when you reach the point where the money you are spending each month exceeds the amount of money that you are bringing in. And when you reach that point, you might be interested in debit consolidation.

What Is Debit Consolidation?

Debit consolidation, or debt consolidation, involves combining, or consolidating all of your unsecured debts such as credit card bills, into one payment which you pay to the consolidator. The consolidation agency, in return, takes care of making all of the individual payments to the various creditors.

When you are deep in debt, debt consolidation is not the only debt reduction solution available to you. In fact, it may not even be the best choice. A partial list of other choices include bankruptcy, debt settlement, debt negotiation, debt management, and budgeting.

The Debit Consolidation Loan

Debt consolidation involves you taking a loan from the debt consolidation company. In other words, you have displaced your loans from the creditors and moved it to the debt consolidator.

The total amount you owe will likely go up, because you’re not only paying the sum of the amounts that you owed your creditors, but you are also paying the cost of the debt consolidation service.

In practice, it works much like a home mortgage. Assuming the interest rate is identical, the monthly payment on a $200,000 home spread over 30 years, is going to be less than the monthly payment spread over 20 years. Even though the total payout on the first mortgage will be greater.

Why Your Monthly Payments Are Less

Under debt consolidation, even though the total amount that you eventually end up paying will probably be more than the combined total of all your debts, your actual monthly payments will be less. This is because the loan from the debit consolidation company will be stretched out over a longer period of time, much like the mortgage example.

Some people believe that debt consolidation is a scam. Maybe – but only in the sense that don’t work especially hard to make you aware that you are paying more in the long term. But, if you really need lower monthly expenses, and don’t really care much about the sum total that you will end up paying, it might be the best thing for you to do.

Why Debit Consolidation Does Not Always Work

Debit consolidation may help you to get out of debt, but if you want to stay out of debt, you are going to have to change your spending habits. That’s why debt consolidation works for some people and fail for others. If you are willing to take responsibility for your spending habits and change them, then it will probably work for you. If you enter into a debt consolidation program, but don’t change your financial habits, it won’t be long before you end up in the same predicament.

Debt Judgement
A debt judgement is when a creditor sues you for a disputed unpaid debt and wins the case. The court then orders you to pay the disputed amount.

Credit Card Debt Help
Here is some simple credit card debt help for those who are confronted with credit card balances that threaten to overwhelm them.


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