Debt relief, as the term implies, is all about pardoning or forgiving the debt of a person, a company or even a country. The term has a history dating back to Biblical times, when Moses pardoned certain people of their debts. In modern times, reprieve from debt has helped certain nations too. For our purposes here, personal or individual debt and its relief will be the focus. Almost every person has faced the burden of debt at some point in time. Whether it is the result of uncontrolled expenditure or other reasons, handling debt has become a huge challenge.
One of the biggest sources of personal debt is credit card usage. A couple of years ago, the US alone was facing $2.4 trillion in consumer debt. 33% of this figure was due to credit card debt and the rest is sliced up between various loans and mortgages. There are plenty of companies and individuals that offer help with debt management. One of the ways in which debt can be managed and done away with over a period of time is with debt consolidation. Debt consolidation is all about availing one loan to repay all existing debts. This single loan is normally a secured loan with the necessity of putting up fixed assets, such as a house, as collateral.
Benefits of such debt consolidation can range from lower late fees and, in some cases, writing off the fees entirely. There is also the possibility of enjoying lower interest rates in a debt consolidation program. Under such debt relief programs, an individual can get help with repaying credit card debts and outstanding bills as well. Some research is required before starting off on a debt consolidation program. With the growing necessity of debt consolidation, many companies based in the USA are also offering a no-charge counseling program. This will allow an individual to assess the ramification of a debt consolidation program and then decide on the best course of action.
Aspects like the benefits of a debt consolidation program, the length or duration of the program and the actual financial outflows are some of the critical aspects of such an option. One of the more important facets to such a consolidation program is the handling of existing debts. More often than not, credit card companies, perhaps justifiably so, will keep calling debtors to retrieve their money.
Such calls, in most debt consolidation programs, will be handled by the company or individual who is bailing out the debtor. This debt consultant then not only handles such calls but also conducts further transactions with the companies to whom money is owed. One of the keystones to choosing a proper debt relief program is to check out the antecedents of the individual or the company offering the program. Perhaps a simple rule to remember is that there is no free lunch. On the face of it, a debt consolidation program sounds great, but even this entails a loan repayment, albeit at lower rates of interest.
James J is a writer and blogger who loves to write articles on debt and finance.