The Consolidation and Reduction of Debt

By Marion Jones

So, you can see the writing on the wall now, you are in too deep and your creditors are starting to call you at home in the evenings too. You are aware that you have to do something, but you don't know just what. It's so embarrassing talking to the kid from the debt collection department, especially over the phone, but you don't want to take time off work to go down there either! But you can't wish the problem away either. You think that you need to look into debt consolidation and reduction.

However, before you think about debt consolidation and reduction loans, analyse your debts to work out your total debt. Debt is a source of credit lines given to you by creditors who felt that you would repay the amount borrowed or owed. When creditors become aware that you are behind on your repayments, they will usually delay a few weeks before reporting you to 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 recover the money owed.

These agencies will try almost anything to pressurize you so much that you will go all out to find a method to pay up, or else stress you so much that you need to seek professional help. Debt consolidation and reduction is one of the processes 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 kind 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 make good your debts as agreed with your creditors to minimize any further complications. Communication is of the utmost importance, because if you have ceased talking to your creditors, they have every right to go all out to recover their money. This will assist you in your debt consolidation and reduction. - 23199

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