Briefing on Debt Consolidation
Bankruptcy and debt consolidation are not one in the same. Bankruptcy can impair a person�s credit rating for up to thirteen years while debt consolidation can offer a road recovery. Obviously, lawyers and financial professionals see the two options, differently. There is overwhelming controversy surrounding the finance term, referred to as �debt consolidation.� In certain circles, it is deemed a dirty word combination and is dubbed as a personal financial disadvantage. In other circles and depending on who is the financing company or debt service, compacting debt to its lowest denominator is precisely the way debt consolidation works.
Debt consolidation is an exceptional option for the person, who only pays the minimum amount of credit debt each month and who, if not careful, will soon be required to remand his | her bill payments through a collection agency.
Not all debt consolidation services work the same way. The best service to utilize is a debt consolidation company that does not require an upfront payment. The best service will be willing to negotiate bill or credit card payments at a lower interest rate.
Home owners who are overextended in the way of credit card bills, and other loan payments, have the option of using the equity in their home to pay-off bills. Depending on the amount of equity in one�s home and the current interest rate, residential property owners may opt to consider the possibility of refinancing their mortgage.
Refinancing a mortgage is an optimal solution if a homeowner is presently paying a higher monthly mortgage rate and may now qualify for a lower interest rate. As there is no limit to the number of times residential property owners can refinance their home, during the period of ownership, many persons often refinance several times.
All financial solutions aside, debt consolidation can be a way of both responsibly taking control over one�s economic plight, as well as, progressively moving towards to a time of debt-free living.