If you are up to your neck in debt, there may seem like there is no relief in sight. In fact this is not necessarily the truth. There are ways to take all of your stifling bills and roll them up into one neat package by using debt consolidation in two very popular forms Home Equity Loans, Refinancing Loans, and a Consolidation Credit Card. All of these instruments provide the debtor with one thing “relief” from the current debt by shrinking it down to a single manageable debt.
Using home equity to consolidate debts
One of the popular methods of debt consolidation today is the Home Equity Loan. What happens is that the debt is extinguished using the equity from a homeowner’s home. A loan is created outside of the mortgage in order to satisfy the debts. Should the homeowner default on the loan, their house is in jeopardy of being foreclosed upon if that loan is not satisfied with a specified amount of time.
Refinancing loans
People often consume the debt by rolling it into a new mortgage. This way the house costs more money to the borrower, but the debt is extinguished at close and the debt is neatly rolled away into the mortgage securely. Upon settlement of the loan, the debts are paid in full and satisfied. The clock on the mortgage is reset to day one.
Credit card consolidation
A low interest credit card is offered to the borrower to include any outstanding credit and loan balances. The interest rate is a low fixed rate for a period of up to one year, upon the year’s end it will resume at its normal rate. Upon acceptance and terms the account should be closed once paid in full and payments be made directly to the new credit card provider. Some people have been able to master paying off one credit card with another to keep the debt revolving and interest rates low. Some people fail to close out the previous creditors account and run them back up again as well.
All three of these options provide solid relief for the debt and help them reconstruct and manage their debt better.
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Frequently Asked Questions
Dear Mr. Berr, My Great-Aunt owned a Life ...
By: John | 24-08-2008
Dear Mr. Berr, My Great-Aunt owned a Life Insurance policy, for which she had a physical certificate. It was very old (1920s, 30s/not sure of the year). My mother was the benficiary of her estate when she died in 1992 or 1993. At the time, I asked a Financial Advisor if the certificate had any value. He said it did not, but he hardly even looked at it, so I took it home. Over they ears I married, moved etc. and cannot locate the policy. I remember it being from Traveler's Insurance. I have already checked the Connecticut and New York (states in which she lived) unclaimed assets sites, but found nothing. (1) Where can I go to locate information on this policy? (2) Can the death benefit still be recovered? (3) I imagine it was a cash-value policy because of the year it was issued, so is it possible that this policy has substantial value? Thank you. John M. Loiudice
I just found out that I inherited $3,400,000. What ...
By: Mr. Lucky1 | 23-08-2008
I just found out that I inherited $3,400,000. What should I do?
Need Immediate help!!!!!
By: emt | 23-08-2008
Do you know a legitimate lender that offers $5000 or more subprime personal cash loan for a person with bad credit and bankruptcy? Payday loans and loans with collateral will not help. i need to get out of financial debt and pay off credit cards.
Reverse Mortgage to settle debts
By: AMeans | 23-08-2008
Just retired, but not debt free.Are considering a reverse mortgage,then use the money to try to settle with each creditor for a lesser amount than we owe.Is this realistic?
Debt Management Programs
By: lost in debt | 23-08-2008
What about the debt management programs available? They appear to offer a quick solution, but do they really help individuals who are in a lot of debt? Can they negatively effect these individuals?
We have approx. $70,000.00 in credit card debt.We ...
By: landc11 | 23-08-2008
We have approx. $70,000.00 in credit card debt.We feel into the credit card syndrome with using the new cards wiht no interest to pay off other with high interest. In the last 3 years we have paid out almost $40,000.00 in doctor bills, medications and glasses,etc. We are now in a situation where with the price of oil, and gas and electric that it is becoming increasing hard to pay these bills. We are not sure if we should go into a debt management program, hoping that with some assistance we can get these bills under control and hopefully get a lower interest rate buy working with a company. I have thought of debt settlement just for the accts. in my name which is about $32,000.00. My wife and I have very good credit and I figure that if I took the hit in my credit it would rebuild a little faster because we have a few accounts with both names on them. The only thing that worries me is the possibily of being sued and oweing more that we started out with. Also are there any debt management companies that you would recommend using from the internet. Thanks and we look forward to hearing from you soon. Landc11
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