First, a properly negotiated “Debt Consolidation Agreement”, IS NOT A LOAN! With the success of debt consolidation programs, the term “debt consolidation” is being used or rather misused by many banks and mortgage brokers in order to sell you a high interest 2nd mortgage or to refinance your home. Going further into debt does not get you out of debt.

So what is Debt Consolidation then? 

Unlike a debt consolidation loan, your debt is consolidated and your interest rate reduced without the need for a loan. This is done through a negotiated agreement between you and your non-secured creditors, whereby,

• You agree to pay, on time, a lower monthly payment you can afford while meeting your other living expenses Payments are usually reduced by as much as 35%.

• You agree to stop using your credit cards or increasing your debt.

Your Creditors agree to:

• Stop all harassing phone calls or any other form of harassment.

• Reduce the amount of your monthly payments to one you can afford.

• Eliminate or reduce your high interest rates.

• Stop late and over limit fees, and other misc. charges.

You make just one convenient monthly payment which satisfies all of your unsecured debt obligation (that you can afford) and still allows you to meet your other living expenses at the same time. Payments are usually reduced by as much as 35%. Late and over limit fees are eliminated and very often by making the regular monthly payments on time, delinquent accounts get re-aged to current status again, saving your credit rating. Your restructured debt program will allow you to avoid taking the drastic measure of declaring bankruptcy or committing yourself to a long-term debt consolidation loan that doesn't really solve the underlying problem.