That’s why dishonest companies that promote too-good-to-be-true debt relief programs continue to rank as the top consumer complaint received by the Federal Trade Commission.
Here’s why you should skip debt consolidation and opt instead to follow a plan that helps you actually win with money: The debt consolidation loan interest rate is usually set at the discretion of the lender or creditor and depends on your past payment behavior and credit score.
Minimum monthly payments aren’t doing the trick to help nix your debt.
Something has to change, and you’re considering debt consolidation because of the allure of one easy payment and the promise of lower interest rates.
Managing your credit card obligations begins with assessing how manageable, or not, they really are. Zimmelman, a bankruptcy attorney from the New York City area says he often advises clients that they are "probably carrying too much credit card debt if you cannot pay it all back within six months without liquidating investments or retirement accounts." Kelsa Dickey, a Budget Coach with Fiscal Fitness in Phoenix, tells her clients that their credit card debt is too much if they "are tying up too much money in payments," and if their debt prevents them from making positive changes such as "leaving a job you hate or saving money for a vacation."Making a budget is a critical first step to managing debt and other obligations.
While that sounds relatively simple, financial advisors often have a hard time assigning a specific figure or formula that defines punishing debt. Christine Luken, a Certified Financial Coach with 7 Pillars, LLC notes that a "budget will keep spending on track so you don't go further into debt." People also need to "get organized from a debt standpoint," says Kelsa Dickey, and thoroughly review the interest rates and balances associated with their cards.
You don’t need debt rearrangement, you need debt reformation.