No one wants to think about debt, especially when it’s going bad. The situation can feel even more hopeless when you have debt in collections. However, you may still have options. Here are some of the ways you can consolidate debts in collections.
Credit Counseling Can Help You Consolidate Debt
No matter your circumstances, if you’re struggling with debt, you should consider talking with a credit counseling organization. A great way to get your financial life back on track, this approach encompasses an array of services including the provision of general information and executing debt management plans.
This latter service can help you consolidate your debts in collections. You’ll meet with a counselor and go over your total financial picture in order to create a plan to repay the debts. They will then contact your creditors in the hopes of renegotiating the terms of your debt. You will then make a single payment to the credit counselor, who will distribute the money to each of your creditors.
This can be an effective way of getting out of a financial hole.
Get a Debt Consolidation Loan
If you’ve talked to a credit counselor, you now know some of your options for how you can take on your debts—particularly those in collections. It’s possible, however, the credit counseling agency you worked with didn’t have exactly the right services for your situation. In this case, it’s possible you’ll benefit from getting a debt consolidation loan.
There are many debt relief agencies out there, and not all of them are the same. Working with the right—or wrong—organization can have a huge impact on your success. For instance, those looking for debt consolidation with bad credit should consider working with Freedom Debt Relief.
With debt consolidation loans of this nature, you’ll take out a new loan with the debt relief organization, which negotiates your debts with your creditors. Often, you’ll be able to repay a debt consolidation loan back faster than you can complete a consolidated debt program. But it’s important to understand the terms of the loan before you agree to anything.
Enter a Debt Settlement Plan
A debt settlement plan works differently than the previous two options. While this path isn’t right for everyone, it does have a place for those who are struggling with debt they think they won’t otherwise be able to repay.
Debt settlement is a bit of a gambit move. In order for it to be successful, you have to stop making payments on your debts, which gives you, or the organization representing you, more leverage for negotiating. The next step is to come to an agreement with the creditor to accept a one-time payment in full of a reduced amount instead of your full debt.
There are some important drawbacks to think about when entering into a debt settlement plan. For starters, it can negatively impact your credit initially. There’s also a chance things will fall through somewhere in the negotiation process. So, while debt settlement can erase your debts for a lot less than what you actually owe, there are some important caveats to consider as well. The key is to work with a reputable organization such as Freedom Debt Relief, one known for its professionalism and efficacy.
It’s never too late to get your finances back on track. Even if you have debts in collections, it’s possible to consolidate these, and potentially get out of debt forever.