Debt management and settlement can be done without help

The amount of debt currently held by the American public is staggering. We are spending money at a huge pace and savings has dropped to nothing. When lower salaries, reduced benefits and outsourcing of jobs is factored in, we are, as a group, in a lot of financial trouble. All you need for proof is to look at all of the advertising for debt consolidation firms that fill the airwaves, newspapers and the inbox on your computer. If we didn’t have a lot of money problems, these advertisers would be doing something else.

Suppose that you do have a debt problem. Do you need the help of these professionals? They certainly promise great things, like cutting your payments in half or even making your payments go away. Do you need to hire them to help you?

The short answer is no. These companies are not going to do anything for you that you cannot do yourself. They cannot get your bills cut in half. They cannot get your payments to go away. All they will do, for a fee, is have you pay them a monthly sum of money. They will hold it for a while. In the meantime, your creditors will not get paid. After they haven’t been paid for a while they will be willing to work out a payment plan. At that time, the debt consolidation firm will try to negotiate with them to accept the amount of money that you have paid them. In the meantime, you will have months of bills that have not been paid and your credit report will reflect that. 

Instead of hiring someone to help you who might do more harm than good, you should attempt to solve the problem yourself. If you have a problem paying off a creditor, call them directly and talk to them about it. If you are overdue on your bills, they will probably believe you when you say that you are having trouble making ends meet. They will probably be willing to work something out in terms of a repayment plan. It might be painful, and you might even have to surrender your credit card so that you cannot use it again, but you can probably come to a solution without having to hire a debt consolidation firm and without having them wreck your credit in the process.

Alternatively, of course, you could go out yourself and obtain some other financing, such as a home equity loan to pay your bills. This would be a better solution if it were available to you, since it would not involve protracted payments to someone to whom you already owe too much money. And be aware that using a home equity loan to pay debts has risks. You could end up losing your house if you fail to pay off the loan.

No matter what you do, you can do it alone. You don’t need to pay a high priced firm to do it for you.

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