How Do Debt Consolidation Services Work??
Posted on August 26, 2009 at 3:36 am
i filed for bankruptcy previously and i am aware that i'm not able to file again immediately since it was just 5 years ago since i filed....so i want to consolidate my debts and have them taken care of....but now i want to ask, how do debt consolidation services work?
Posted on August 26, 2009 at 4:24 am
It depends on which service you'd like to avail, because on a basic level there are a lot of them.
You can either utilize one of the following:
1. Secured debt consolidation loan
2. Unsecured debt consolidation loan
3. Chapter 13 bankruptcy
4. Debt settlement
5. Credit counseling
Posted on August 26, 2009 at 4:47 am
How is chapter 13 bankruptcy a way to consolidate debt? That's pretty interesting.
I am aware also about getting a consolidation loan. I mean from the little I know you can either get a credit card to pay off your other credit cards and whatnot. I've read enough on this forum not to get one of those especially the home equity loans because there's a risk of losing your home
Posted on August 26, 2009 at 8:58 am
How do debt consolidation services work? Lurker's response is correct- depends on what you are trying to do. To address your question Curious George, people refer to Chapter 13 bankruptcy as a debt consolidation service (infrequently) because of the repayment structure used.
Someone who files Chapter 13 bankruptcy makes a monthly payment to a court appointed trustee handling the case, who disperses payments to each of the owed creditors. It is nearly identical to the structure of credit counseling (just replace the trustee with the agency), and Chapter 13 payment plans also on average are set up over a 5 year period.
Posted on August 28, 2009 at 2:56 am
To answer the question on how do debt consolidation services work--Lurker you forgot to mention balance transfers. Curious George you're right on that respect--it involves using a low-interest or zero-interest credit card to pay off all other bills. Truth be told, the balance transfer idea may be good if you're able to pay off the balance on the new credit card immediately--if not, you're just basically paying for more interest charges and other fees. Besides, the low-interest promo stands for only a limited period of time, so if that promo period is over, the interest rate may shoot up so high, you may hardly be able to pay for it.
Posted on August 28, 2009 at 3:30 am
let me rephrase the question a bit just to keep the juices flowing
how do scammy debt consolidation services work?
Posted on August 28, 2009 at 4:28 am
If they immediately insist on you signing the contract without having you read it, that is not a good sign. Also, if they make some tall promises while having a very vague contract, don't bother signing up with them.
Posted on October 5, 2009 at 3:15 am
how do debt consolidation services work especially if your credit is bad?
Posted on October 6, 2009 at 6:32 am
Alfred, what do you mean exactly by that?
Posted on October 15, 2009 at 2:08 am
how do debt consolidation services work especially if your credit is bad?You mean how can debt consolidation fix a bad credit? Or if it does that at all?
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