How Your Debt Can Be Reduced With A Debt Consolidator

Apr 22, 10 How Your Debt Can Be Reduced With A Debt Consolidator
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How Your Debt Can Be Reduced With A Debt Consolidator

by Mallory Megan

A debt consolidation program begins with appraising your financial position.  This procedure involves an in depth analysis of your financial standing. T hat analysis will a help you to evaluate whether it’s more beneficial to file for bankruptcy or go for a debt consolidation program.  A debt consolidation analysis will calculate the debtor’s potential savings through the program.

When a deal is finalized with the debt consolidation company and the debtor.  The next step is for one of the counselors to contact the creditors and work out a reduction in the interest rates and monthly payments at an amount that will be affordable to the debtor.

Through negotiations with the creditors, the debt consolidation company usually reduces or eliminates the interest charged.  The balance owed towards the creditors is reduced and they can even give the debtor a reduction in the principal amount.

The debt consolidation program will also help the debtors by inducing the creditors to stop the legal actions that they were taking against the debtor, which means they can no longer devour the debtor’s income nor can they bring the debtor to court.  Also, this starts bringing up the credit rating of the
debtor because now the debtor is repaying the debts under the new agreement.

With this process of debt alleviation, the debtor will no longer have to reply to embarrassing phone calls from his creditors.  The debtor won’t incur any bills or pay the creditors directly.  The debt consolidation program will deal directly with the creditors.  The debtor will just be required to pay the debt consolidation company a single amount monthly according to the budget that was agreed upon
with the debtors.  Thus, there is no need for any interaction with the creditors.

Most of the time, these systems are free to the debtor since the fees are paid by the creditors, as they would rather acquire something in return than lose all the money that the debtor owes them.  Also, programs like this work for those with good or bad credit.  It is a great solution for debt reduction to use a debt services company or consolidator.

Mallory is employed by a debt collection agency.  She also writes stories on business, finance, and collections.

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