What is Debt Consolidation?

There are several different types of debt management programs available:

• Debt Consolidation
• Debt Consolidation Loans
• Debt Settlement (otherwise known as debt negotiation or debt recovery)
• Bankruptcy

Debt consolidation is the process of taking multiple debts, such as credit card debts, medical bills and personal loans, and combining them into one monthly payment.

The FreedomQuest Debt Management Program is a debt consolidation program. This type of debt management program offers the highest benefits and the least amount of risk. Consumers are able to consolidate their debts while lowering their monthly payments, reducing their interest rates and getting back on track with their personal finances. A debt consolidation program does not put their car or home at risk. Many consumers are able to get out of debt in 36 to 60 months without hurting their credit rating.

Learn more about the FreedomQuest Debt Management Program by calling 1-800-320-9929. A certified credit counselor from Consolidated Credit Counseling Services will provide you a free debt consultation and advise you whether or not a debt consolidation program would best fit your financial situation.

Other Debt Management Programs

Debt consolidation loans usually require some type of collateral, such as your car or home. Your credit rating usually needs to be in good standing to qualify for the loan. This type of debt management program does nothing to eliminate your debt; it only transfers your unsecured debts into a secured debt. If you’re unable to make your payments, you risk loosing your car or home. Learn more about the risks of getting a debt consolidation loan.

Debt settlement is oftentimes confused with debt consolidation, but these types of debt management programs are quite different. Debt settlement companies create a monthly payment for you based on what they predict they can get your debt settled for or what you can afford. In most cases, you will hold off making your payments to your creditors until the accounts have been charged off and you have enough money saved up to settle. It may sound good on the surface, but this type of debt management program has serious effects on your credit rating and your creditors may sue you. Learn more about the risks of using a debt settlement program.

Bankruptcy has serious and devastating effects on your credit rating. This type of debt management program stays on your credit report for seven to ten years. Since the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, you’re required to go through a credit counseling briefing and a means test to make sure that bankruptcy is your only option. Your attorney will conduct a “reasonable investigation” into your personal finances to make sure you qualify, and you must complete debtor education before your debts are discharged.   Learn more about bankruptcy before writing off your debts.

Credit counselors at Consolidated Credit Counseling Services can help you decide which debt management program will work for your financial situation. Call 1-800-320-9929 for a free debt consultation and find out the best way to eliminate your debt.