DH Expert Guides

The Help Center contains over 100 articles written by industry experts.

Guide to Debt Consolidation, Management, Loans, and More.

What is debt management?

Working with a professional to make a plan for how to handle your debts is one way to get in control of future. With debt management you establish a plan and agree to stick with all of the terms. Your creditors also agree to the plan and expect you to make your payments accordingly. Failure to make required payments or leaving the debt counselor you worked with could mean that your creditor could cancel the agreement.

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When should I see a debt counselor?

You should see a debt counselor as soon as you find that you are having difficulty making your monthly payments because of the amount of debt you have. Don’t wait until collection agencies are calling you. By staying ahead of the game you can try to get things worked out before things get too out of control. The debt counselor will help you gain control over your finances.

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What collateral can I use for a debt consolidation loan?

Not having perfect credit does not have to keep you from getting a debt consolidation loan. While many lenders are unwilling to approve a large unsecured loan, they may be willing to accept collateral such as a home, boat, or car to secure your loan. Whatever is used must be owned free and clear by you. The item must also have enough value to equal the amount of the loan. Your lender may also have certain credit granting criteria that you need to meet even with the security on the loan.

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How do I deal with a debt collector?

Debt collectors are not in the business of being your friend. They have one goal and that is to get the money you owe. When a creditor turns over your account to a collections agency, the collector needs you to pay up in order for them to get their money. Often this means that collectors will stop at nothing to get to that point. However, there are laws to protect you from an overzealous collector. If a collector starts to harass you, call you in the middle of the night or tells your employer about your debts, this is all illegal. You should contact the police regarding the harassing behavior. You can also send notice to the collector in writing that they should not contact you. Remember that it is not in the best interest of the collector to let the debt slide so they may try different tactics to intimidate you into repaying the debt.

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Can a senior use the equity in their home for debt consolidation?

As a senior citizen with limited income, the worst position you can put yourself into is to have more debts than you can afford. Finding yourself in this situation can be scary but you may be able to find options to consolidate the debts and reduce your monthly payment. Since many seniors have owned homes for a long period of time, you may find that you have significant equity in your home that can be used as collateral for a debt consolidation loan. The disadvantage to this is the fact that you could suddenly find yourself short of funds to make the monthly payments due to medical bills and other expenses. If you use your home as collateral and then fail to make the payments, your lender could foreclose on the home and leave you empty handed.

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Can debt consolidation be done without the help of a professional?

Debt consolidation can be done without the help of a professional. The advantage to using a debt management professional is that they have more experience working with creditors and may be able to make the process much easier. An obvious disadvantage of using a professional is that they work with you for a fee. To handle this on your own, start by gathering all of your debts. Next contact your creditors and see if you can negotiate for them to accept less money. You must have discipline to handle this on your own. If you don’t stick with your plan this won’t work and you could end up finding yourself in more trouble in the long run.

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When is debt consolidation not a good choice?

Is debt consolidation always the right decision? It may not be. If you can not control your spending then debt consolidation on its own is not the answer for you. Once you consolidate your debts, you don’t want to turn around and run up your bills again. It may be more difficult for you to do debt consolidation a second time around. You need to be ready and willing to make the commitment to stop overspending. Until that point, debt consolidation may not be the answer for you.

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How can consolidating help with my debts?

Finding yourself in a position where paying monthly bills is getting difficult can be very disconcerting. You can improve your financial situation by getting a debt consolidation loan and reducing the amount of money you are paying out each month. Many banks offer unsecured debt consolidation loans to qualified customers. If you are paying off credit cards, you may find that you can get an unsecured loan at a lower interest rate for a longer length of time. This can help you get better organized when it comes to your debts and possible help you get credit under control. Check with your bank or credit union to see what loan terms they can offer. You can also find information on debt consolidation loans through websites like DebtHelp.com.

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How does debt settlement work?

When you work with a debt settlement company to handle your debt problems, it is possible that they can get creditors to accept less money than you actually owe. They handle all of the negotiating for you. Basically, rather than making payments to the creditors you save up money in a special account. As the money accumulates, the debt settlement company will contact creditors and negotiate with them to determine how much they will take. They work with each creditor until the debts are considered paid in full. While a creditor may not like accepting less than they are owed, they know it is better than receiving no money at all. If you find yourself in over your head with debts, this may be a more reasonable option for you than to file bankruptcy. An attorney or other debt management professional may be able to give you advice to determine what option is best for you.

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Is a short term loan right for me?

There are a number of financial companies that offer short term or payday loans to needy consumers. Be careful about turning to this option. The idea behind these loan deals is that they give you enough money to make it to you next paycheck. Unfortunately, the amount of interest you will have to pay may be more than you can really afford. These often leave people in even more debt and cause more financial difficulties. If you find yourself living paycheck to paycheck or unable to meet your monthly obligations, maybe you should visit a website like DebtHelp.com or talk to a debt management professional to see about setting up a plan to possible consolidate some of you debts.

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Where should you go for credit counseling?

There are a number of companies advertising their services as credit counselors so how do you know which one is the best one for your needs? This is when it pays to do a little investigating. Since there are people out there who won’t hesitate to take advantage of your vulnerability, before selecting a company to help you, contact the Better Business Bureau to see if there are any complaints about them. Also, take some time to ask the debt counseling company what services you can expect from them. Generally, you are paying a fee to the company to work with your creditors and negotiate a way for you to repay them. This may include setting a plan where your payments are reduced or the creditor may agree to take less money than was owed. Either way with the right credit counselor, you can get on the right track to reduce your debts.

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