Behind on Bills and Options for Help
I'm behind on every bill that I owe - Are there any plans out there that can help me?
I'm behind on every bill that I owe (including car loan). I also got every kind of debt collector on me that I can't name them. Are there any plans out there that can help me?
Given that one of your delinquent accounts is a secured auto loan, I think that your best option will be to develop a strategy to lower your monthly payments on your unsecured debts so that you will have more money available each month to apply to your auto loan. There are several possible solutions to your predicament, but which one is the best for you depends on several considerations, including your income, your balances, your interest rates, and your creditors. I'll try to walk you through options from refinancing a home, to debt settlement, credit counseling, and bankruptcy.
First, if you own a home, a secured debt consolidation loan may be right for you. This type of loan is essentially a home equity loan which is used to pay off your other creditors. Secured consolidation loans help many consumers by consolidating all of their debts into a single monthly payment with a lower interest rate and payment amount. You may even be able to include your auto loan in a consolidation. However, be careful before you borrow money against your home to pay off credit cards and personal loans; you are converting what was previously unsecured debt into secured debt. This could cause you problems down the road if for some reason you are unable to make your payments, or if life circumstances force you to file bankruptcy, as you may not be able to discharge the secured debt as you would unsecured debt. However, secured debt consolidation loans work for many people, so this is an option to consider carefully - the Bills.com Savings Center, which you will find at the top of most pages on Bills.com, is a great resource to help you find a lender for this type of loan. Bills.com makes it easy to compare mortgage offers and different loan types, if you do own a home and can refinance. Please visit the loan page and find a loan that meets your needs at: Debt Consolidation Refinance Quote
Now for non-loan type of debt help options, it is very important to know that debt consolidation comes in many forms, so it is important that each consumer reflects on what their needs and concerns and financial situation is before signing up for an online debt consolidation program. The four primary concerns for most consumers are: i) monthly payment, ii) time to debt freedom, iii) total cost, and iv) the credit rating impact of the consolidation program. Be sure to evaluate each program, relative to your prioritization of these factors.
Since there are a variety of online debt consolidation options, including credit counseling, debt negotiation/debt settlement, a debt consolidation loan, and other debt resolution options, it is important to fully understand each option and then pick the solution that is right for you.
Credit counseling, or signing up for a debt management plan, is a very common form of online debt consolidation. There are many companies offering online credit counseling, which is essentially a way to make one payment directly to the credit counseling agency, which then distributes that payment to your creditors. Most times, a credit counseling agency will be able to lower your monthly payments by getting interest rate concessions from your lenders or creditors. It is important to understand that in a credit counseling program, you are still repaying 100% of your debts - but with lower monthly payments. On average, most online credit counseling programs take around five years. While most credit counseling programs do not impact your FICO score, being enrolled in a credit counseling debt management plan DOES show up on your credit report... and, unfortunately, many lenders look at enrollment in credit counseling akin to filing for Chapter 13 Bankruptcy - or using a third party to re-organize your debts.
Debt settlement, also called debt negotiation, is a form of online debt consolidation that cuts your total debt, sometimes over 50%, with lower monthly payments. Debt settlement programs typically run around three years. It is important to keep in mind, however, that during the life of your debt settlement program, you are NOT paying your creditors. This means that a debt settlement solution of online debt consolidation will negatively impact your credit rating. Your credit rating will not be good, at a minimum, for the term of your debt settlement program. However, debt settlement is usually the fastest and cheapest way to debt freedom, with a low monthly payment, while avoiding Chapter 7 Bankruptcy. The trade-off here is a negative credit rating versus saving money.
Debt Consolidation Loan
Many people think first of a debt consolidation loan when seeking online debt consolidation. This option typically means a second home loan (or home equity line of credit) or refinancing your primary mortgage. In a debt consolidation loan, you exchange one loan for another. The most frequent form is taking out a mortgage loan, which carries a lower interest rate and is tax deductible, to pay off high interest rate credit card debt. It is important to be aware that shifting unsecured debt to secured debt can create a volatile situation, if there is ever a chance that you cannot afford the new mortgage payment you are now putting yourself at risk of foreclosure! In the case of a debt consolidation loan, most mortgages are 30 year loan, which means that the total cost and the time to debt freedom could be very high... but the monthly payment will be lower than other options and there is no credit rating impact.
Net-net: while there are many forms of online debt consolidation, many people with good to perfect credit who own homes should look into debt consolidation loans, while consumers with high credit card debt and poor credit may want to explore debt settlement or debt negotiation. However, each consumer is different, so find the online debt consolidation option that fits for you.
Bills.com makes it easy for you to apply for the best solution that meets your needs, by following this link:
I hope this information helps you Find. Learn & Save.