Debt Consolidation and Reduction

By Marion Jones

So, now you can see the writing on the wall, you are in up to your neck and your creditors are starting to ring you in your home in the evenings too. You are aware that you have to do something, but you're not sure just what. It's so embarrassing having to talk to that kid from your creditor's debt collection department, especially over the phone; but you don't want to take time off work to go down to their offices either! And you can't wish the problem away. You've heard of debt consolidation and reduction and you think you ought to look into it.

However, before you rush into debt consolidation and reduction loans, analyse your debts to calculate your total exposure. Debt is a source of credit lines given to you by creditors who thought that you would repay the sum borrowed or owed. When creditors become aware that you are behind on your repayments, they will often delay a few weeks before telling the collection agencies.

During this time, you might want to contact your creditors and ask for an extension, balance reduction, or even a complete termination of the debt. Creditors expect their money and therefore, they may extend your credit, since they want to avoid the problems that arise when reporting customers for non-payment.

Creditors do not really want to make enemies of their customers, since they expect their customers to show good faith and pay the debts and eventually continue doing business with them. If you fail to contact your creditors, however they will turn your files over to the collection agencies in the end if they have to. These agencies often use much heavier tactics to retrieve the money owed.

These agencies will try almost anything to stress you so much that you will go all out to find a way to pay up, or else pressurize you so much that you need to seek professional assistance. Debt consolidation and reduction is one of the methods of eliminating debts; a loan may or may not be required.

When you do talk to your creditors, ask them for leniency, so that you can attempt some form of debt consolidation and reduction by reducing your expenses. If the creditors agree to debt consolidation and reduction by lowering your payments, terminating it, or else providing you with an extension and you refuse to take advantage of their offer, ie, if you fail to make repayments after the offer is made, then they will not be as cooperative the next time you speak with them.

Make sure that you repay the debts as stipulated by your creditors to avoid any complications. Communication is of the utmost importance, because once you have ceased talking to your creditors, they have every right to go all out to retrieve their money. This will assist you in your debt consolidation and reduction. - 23159

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