When you have got yourself into a position where you need some serious help to get out of your debt situation, you will be used to ignoring phone calls from numbers you do not know. You’ll have experience in not opening a letter out of knowledge of what they contain. Whatever internal dialogue you have, telling yourself you don’t care as you do these things, you also honestly know you also have an underlying pit-of-the-stomach sinking feeling that you know at some point you will have to deal with this. It’s daunting, for sure.
We at The Bargain Radar speak with experience! We have been there, done that. However, what we can also tell you is that we’ve come out of the other side. Positive action in most situations means a relief of stress. Doing something about a problem, as in life itself, is the most important action you can take. Taking that first step, committing to the decision to make a change is the hardest step you can take. Once you have, the solutions are there waiting for you.
What to do first?
Research your best options. Read about all the different companies you could talk to. Read some blogs by those who have taken that step already and are on their journey. Once you have researched and decided who you will call, have all your debts – every single dollar and cent – with the companies you owe and you’re the details on your salary, your outgoings, so you can speak with clarity to the advisor with certainty.
The reason why is that the advisor you speak to will go through your total debt amount, and what you can afford to pay on a monthly basis. In our experience, the advisor you speak to will be very sympathetic and non-judgmental. They will want to help you and – of course – win your business! Remember that.
Remember also that they ARE trying to sell you their solution. Be confident to ask them the questions you want to know. What are their fees? What is the timeline for each of your debts to be closed? What do you do when you get a call or a threatening letter? What do they do better than their rivals?
Once you have chosen the company you prefer and worked out what you can afford each month that agreement is with your debt consolidation partner, not the creditors. In our personal experience, we agreed a $267 payment per month in total, to cover a debt of over $15,000 built up with 6 credit card and store card companies. That payment then goes to your account with the debt consolidation partner until they agree with individual credit plans.
As soon as you start on this path, you will feel the stress taken from you. When you sign up for your consolidated debt plan of your choice, the company you decide to employ should field ALL the calls. ALL the letters you didn’t want to open, you will open and send to them. They will send you the deal they have negotiated with the creditor and you will be able to approve on refuse. If you agree, the payments will start to go to that creditor from an agreed date. If you refuse, the Debt Consolidation Partner will go back to the creditor and work on another plan.
What to look out for/be careful of?
READ the agreement before you sign it. Look at the fees the Debt Consolidation Partner will charge. Talk to them about those fees. Talk to them before you sign about anything you are not sure about.
More about fees:
What we found in our experience at The Bargain Radar was that you need to evaluate the ‘deal’ your Debt Consolidation Partner comes to you with. You will see that they list the following: The ‘total original debt’ (the total balance you owed), the ‘negotiated debt’ (the amount that the debt consolidation partner has agreed with the creditor) and the fee charged by the debt consolidation partner. Make sure you check closely the fee – as often the ‘negotiated’ amount plus the fee charged is not too much less than the original debt.
You should be hoping and aiming for the debt consolidation partner to negotiate down to around 50% of your original balance. If their ‘fee’ is high, call your representative and ask them. Explain to them if they want their fee, they need to negotiate the debt amount with the creditor to a far lower amount.
Here is a list of some of the top debt consolidation companies to help you start on your journey:
- National Debt Relief
- ClearOne Advantage
- Accredited Debt Relief