Debt Management Counseling – From Ask Bill

Question:
My husband opened a business that went sour and closed in April. We opened a home equity credit of line (variable interest) and put a lot on credit cards for the business. Now we are in the process of refinancing our 1st and 2nd mortgage in order to reduce our monthly payments of the 2nd mortgage since it was a variable interest. Two of our 4 credit cards have been closed by the credit card companies and they have lowered the interest rates to 2% (for one year till March 2007) and 9% (for six months till December 2006). The other two credit cards are in order (12.99% rate and 14.99%). Since April we have been on time on the credit card payments, but it will take many years to pay the $65,000 credit card debt. Our credit score was admirable before we started the business (11 months ago). Now it has decreased a lot. Since we are not behind on the payments on the credit cards, could we still qualify for a debt management counseling to reduce more the interest rate and pay all our debt faster?

Answer:
Thank you for visiting Bills.com. Here is an answer to your debt management counseling question.

First of all, you are not alone. With $13 Trillion out there of debt, we're just about all

depressed with bills. The challenge is to take charge of the situation and come up with a solid game-plan.

The first goal will be to budget. Start out with the attached Personal Finance and Budget Guide (which I have attached for you for free). It has some excellent tips on how to manage your money and how to get out of the cycle of debt and into a virtuous cycle of wealth.

If you need debt help, please contact a counselor (we have several online at: https://www.bills.com/debthelp/debt/).

It is imperative, however, to understand your personal needs and then tailor a solution to what best fits your financial game-plan. There are many forms of debt relief, including: i) debt consolidation loans, ii) credit counseling, iii) debt negotiation, and iv) bankruptcy.

But be aware, all forms of debt consolidation are not the same. You need to

consider your specific situation, including if you own or rent your home, your monthly debt to income ratio, and your credit rating. A program like a debt consolidation loan may lower your monthly payment, get you a lower rate than most credit cards, and the interest is tax deductible.

Alternatively, a program like negotiated debt settlement may lower your monthly payment, get you debt free fast, save half of what you owe, but it could negatively impact your credit rating.

Since your credit rating has already been negatively impacted, you may want to explore the lowest cost, shortest program, to get debt free without bankruptcy... which is debt settlement. We refer people to a partner company located at: www.freedomdebtrelief.com for these services.

These are a few of the considerations. If you would like more information, please visit our debt relief boot-camp at: http://www.bills.com/debt-relief-info-article/

Bill has answered all sorts of questions and has been able to provide those in need of financial guidance with helpful and valuable advice and information on their specific financial area of interest. If you need specific guidance on any of the above mentioned financial areas, feel free to Ask Bill your financial questions and get better informed.

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