You have a half dozen credit cards, a few doctor's bills and are looking at choosing between making the car payment or the credit card bills. One the one hand, if you miss too many car payments you will ultimately lose your vehicle and transportation to work while on the other hand, if you miss the credit card payments you are going to be hit with late penalties and possibly over your limit fees and will lose the use of your credit cards. At some point, you will have to venture into the reasoning about how you became embroiled into this financial mess, but your first step should be in looking for the path to get out.
Many times you have probably added up the total amount of your monthly obligations and find that once everything has been paid, there is very little left over. In some cases, the money runs out before all of the monthly bills have been paid and unlike your cell phone minutes, the balances continue to roll over to the next month, until you find yourself in deep trouble. Additionally, you may not want to answer the phone as you know it is a creditor calling to demand a payment.
When bankruptcy is not a considered option, credit consolidation or credit repair services may be the best way out of your current dilemma. Seeking professional financial advice and guidance may take some time as you will have to disclose all aspects of your financial situation, but in the end the time will be well spent when you end up with some extra cash in your pocket at the end of the month. Using a professional credit consolidation firm may be in your best interests as they can also offer budgeting advice to help avoid falling into the same trap that put you there in the first place.
Essentially, credit consolidation involves taking all of your bills and if you receive a consolidation loan, it pays off the balances of all other obligations leaving you with only one bill every month. The size of the loan, the interest rate charged for your high-risk status and the life of the loan will determine if it is in your best interests to take this route. However, depending on the status of your credit you may not qualify for a consolidation loan and the cost associated with a credit consolidation loan may make it more expensive than paying off your bills.
Working with a credit consolidation company may offer the benefits of their experience in working with creditors to remove some of the late charges, lowering your balances and ending late fees and over the limit fees while you work to pay off your debt. You will pay the credit consolidation firm every month, based on your income and they will make the monthly payments to your creditors.
This will still end your use of your credit cards, but it will get you out of debt and with the right budgeting advice can help keep you out of trouble in the future.
