Debt consolidation is a type of debt refinancing in which a debtor takes a loan known as a debt consolidation loan to pay off a number of loans that they have. Debt consolidation programs are often thought as a scam and ineffective solutions. However, we would like to challenge such thoughts by sharing some success stories with you.
We must appreciate the fact that just as there is no get-rich-quick scheme, there is also no get-out-of-debt-quick scheme. The following are just a few examples of many individuals who were able to get out of debt over time.
Dann Berg’s story was featured on the Business Insider. He graduated from the University of Hofstra at the age of 22. Along with his degree, he was facing the world with his credit card debt that amounted to $21,000.
Just like many individuals, he had indulged in excess spending, thus found himself carrying credit card debt on five credit card companies.
This reality hit him hard and as he knew he was on his own now, he had to get a solution. At that time, he was unable to make the $600 payment on a monthly basis.
However, after getting into a debt consolidation program, he was able to make manageable payments. This was also possible as he restricted his spending and put in more effort at work as well as skipping meals at times.
Within four years, he successfully paid off his debt. His debt consolidation company negotiated for better terms with his creditors.
Dann was then expected to make a single payment of $500 to the debt consolidation company, and this would then be transferred to the creditors.
This led to him successfully paying off his creditors and he feels relieved that credit card debt consolidation has enabled him to become debt free.
Paula’s story was featured on the Consolidated Credit site. She is a mental health counselor whose financial problems started when her father got unwell. She went to take care of him and had to manage the finances.
This resulted to using her credit card so as to pay the bills.
Although she refinanced the house and had paid off the credit card debt, the bills still become larger and she could not keep up with the minimum payments on her card.
She knew even better that the situation was taking a toll on her mental health and she had to find a solution.
She made a call to a debt consolidation company and started her journey back to financial well being only to be set back because that company was bought out by another debt consolidation company and her $1000 payment had not been used in clearing her debt.
She then called her previous contact person, who was then working at Consolidated Credit. She is on track again and feels confident with the current debt consolidation program. They are certified credit counselors who are also caring about their clients.
This goes to show that there are success stories of people who successfully consolidate debt and manage to pay off their loans without straining their budget. Paula’s story also shows that a debtor should be careful when choosing a debt consolidation company. It is possible to get out of debt and debt consolidation does work.