Debt Elimination Programs

Debt Elimination Programs

Being up to your earlobes in debt is a very helpless feeling. It seems like there's no hope--other than bankruptcy, and who wants that? About ten years ago, you would have been right. But now, there's a whole industry committed to helping you get rid of your debt--the debt elimination industry.

How Debt Elimination Programs Work

Since there are debt elimination programs for almost any kind of debt, the best way for us to explain them is to outline them below:

• Debt Consolidation - This debt elimination program works by using negotiation to get the balances and interest rates of your unsecured debts reduced. Then they are all combined into one, and you make one monthly payment to the debt management company instead of several monthly payments to your creditors. This is the most popular form of credit card debt elimination.
• Debt Settlement - Allows you to pay off your debt at 30-50 cents on the dollar, but you have to have access to enough money to pay the new, lower amount off all at once. Some debt management companies will give you one to three years to pay it off though.
• Debt Consolidation Loan - This is a loan to pay off your unsecured debts. The benefit is that you pay it back at an interest rate that is half as much as what you're paying on your unsecured debts--sometimes even in the single digits.
• Debt Consolidation Mortgage - Allows you to borrow from the equity in your house to pay off your unsecured debts. Your payment is combined with your mortgage payment. (Note: If you don't think you can afford the new payment, don't do this because your house is your collateral, and if you miss payments, you could lose your house!)
• Student Loan Debt Consolidation - Combines all your student loans into one and locks in a much lower fixed interest rate.

These are just the basic debt elimination programs to get you started. Most of these debt elimination programs have variations. For example, if you have a lot of credit card debt, you can get help from a credit card debt consolidation program to eliminate credit card debts, or you can get a credit card debt consolidation loan. There are even Christian debt elimination programs and debt elimination services for those with bad credit. And recently (last week, in fact) Congress enacted a bill that requires anyone filing for bankruptcy to go through a debt management program first. What better endorsement for this fairly new industry?

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