Debt Free – Two Magic Words

Written by admin on March 18th, 2011

DEBT FREE. The two words almost all American consumers hope to one day say about themselves. The fact is that they are harder to say than even I DO. Several decades of a strong economy and a lot of free spending gave consumers a sense of financial security, and few saw the economic troubles coming that now exist.

On top of weakened real estate values, the average consumer has amassed large, unsecured debt amounts. There is no sense of well-being, and the notion of becoming debt free seems so remote. There is no quick fix or magic way of becoming debt free. It is a process that takes just as long to achieve as it did to rack up all the debts that created financial muck and mire. But help is out there and consumers are looking for programs that can help them achieve the goal.

Today’s consumer has more resources than ever before to become educated in different debt relief tools and programs. There are many options before the thought of bankruptcy has to enter into the equation too. Debt counseling, debt management, and debt settlement are all ways of addressing debt relief. These options will apply to different people and different situations. Debt counseling and debt consolidation usually mean taking unsecured debt such as credit cards and paying them off through what is known as a consolidation loan. These loans are secured through collateral such as a home, piece of property or automobile. They allow a complete pay off of debts, but roll the amount borrowed into one lower monthly payment. While it sounds good, these loans by their nature can be dangerous. If a consumer fails to meet payments or defaults, the loss of collateral is probable. Debt management and debt settlement solutions do not require a loan. Debt resolution or debt relief companies can assist consumers in renegotiation of total debt amounts as well as lower interest rates. They typically have the consumer pay into an insured account and then they take over making all payments. For the consumer, their monthly payments are reduced to one, and it becomes a lower total amount. Each one works slightly differently beyond that and depends on individual circumstances.

Once the American dream was home ownership, but it is now being debt free. The consumer also has to take responsibility for the habits that got them into massive debt, and a personal program needs to work hand in hand with any debt relief process. Being debt free can only become reality with thoughtful work and a committed plan.

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