Texas Debt Consolidation: The Important Things You Should Know

What should I need to know about debt consolidation in Texas? Where can I get information in an easy
to digest manner? What information is accurate and comes from experts?

Just because a company calls itself nonprofit doesn't mean they are the best choice. Some companies
use the status in which they file their taxes to build a false sense of trust. Check with the BBB.org
website to find a recommend debt consolidation professional in Texas.

Find out if your debt consolidation agency that hires qualified staff. Do they have any certifications? Are
they backed by reputable institutions that have a good reputation for reliability? This lets you know if a
better idea of whether or not the company will be right for your needs.

Understand the pitfalls of working with any debt consolidators claiming they're a nonprofit one. Non-
profit companies are paid for by the creditors so they will consolidate your debt in the best interest of
the creditors and not necessarily yours.

If you are behind paying your debts, you have more leverage to consolidate your debt for less than you
owe. Many creditors would rather have something than nothing at all. If you are current paying your
debts, then they will almost always want the full balances plus any future interest charges.

Make sure to do your homework when researching a debt consolidation firms. Doing this can help you
make the best decision when it comes to your financial future since you'll be dealing with pros that are
serious about helping you becoming debt free.

Never take out a debt consolidation loan from a non-reputable company that you aren't familiar with.
Loan sharks are waiting to take advantage of you if you let them. If you are seeking money to borrow in
order to repay your debts, search for a lender who is reputable, offering fair interest rates.

When you're going through the debt consolidation process, reflect on how you got to this point. You
definitely don't need to run into this again five years down the road. Be honest with yourself and learn
what caused all of this to happen.

If you have old collections, some will settle for as little as 30% percent of the balance in one lump sum.
Depending on your situation, settling debt may increase your credit score.

Understand that debt consolidation loans have no negative impact on your credit score. If you make on-
time payments the debt consolidation loan may improve your credit score. Some other debt reduction
options will affect your score adversely, but if you cannot afford or qualify for a debt consolidation loan
your first goal should be to get out of debt rather than worrying about your credit score right now. This
may be done by reducing your high interest rates and combining your obligations into one with a debt
consolidation loan if you are able to manage the payments.

When you're consolidating the debts you have, consider what debt needs consolidating and what may
need to be kept separately. Credit counseling programs for example may not be able to help with
payday type loans. Debt settlement programs may require all debts enrolled have a balance of at least
$500 or $1,000. If you have a debt at a 0% interest rate, then you may want to pay that debt off
separate from any program. Go through each loan separately before contacting a debt consolidation
company.

Be sure your debt firm has a strong customer service that can help you so you're able to keep yourself
informed about what's going on. Most reputable companies will provide a dedicated customer service
representative that is always familiar with your situation. Consider a company based in Texas versus a
large national company that will be less familiar with your situation.

Also make sure that your company is licensed for debt consolidation or debt management in the state of
Texas. This can be verified by calling the Texas Office Of Consumer Credit Commissioner at 512-936-
7600. If you chose an out-of-state company, they may not be as familiar with the laws and protections
provided to Texas residents. Some companies also charge illegal fees as Texas has specific fee caps for
debt relief, debt consolidation and debt management services.

A Chapter 13 bankruptcy is another form of debt consolidation. If you are behind paying secured debt
such as a mortgage or vehicle loan, then it may be able to help save the property if you can afford to pay
the current payments plus the amount you are behind paying over time. It is much harder to discharge
debt in a Chapter 7 bankruptcy which requires you to sell all your non-exempt assets. Some people with
little income and few assets can resolve all their debt problems with a Chapter 7 bankruptcy.

You may not want to consolidate your debt if you have low interest rates on your current debt unless
you can no longer afford the payments.

Don't let anyone access your credit report unless you know they are a reputable debt consolidation
company or a reputable lender.

If you need to consolidate all your debt, consider borrowing money from family or friends. This can
make it easier to make a single payment on your debt each month. You also might have a lower interest
rate than paying the high interest rates from banks and lenders. Be careful consolidating debt in a
manner that could ruin your relationship with your friend or family member if you are unable to pay.

A debt consolidation lender will provide you one monthly payment. If the debt consolidation lender only
offers loans, you should consider checking out other lenders to find the best rate. Consider a lender that
will consolidate your debt by paying off all your other debt directly when you receive the new loan.

It can be hard to get a consolidation loan. It is easier in some cases to get an equity line of credit or
refinance a mortgage if you have enough equity. It is difficult to obtain a debt consolidation mortgage in
Texas because Texas law prevents a new mortgage that is higher than an 80% loan to value ratio. This
means that the portion of your mortgage used for debt consolidation and your existing mortgage cannot
be higher than 80% of the value of your home. Financial institutions know that you are a risk when it
comes to lending you money, so they are going to consider your overall financial situation before
offering you a new loan. This includes your debt-to-income ratio.

There are quite a few options to consider in a debt consolidation plan, from being able to schedule your
payment date to offering you courses and counseling as part of your plan.

Check online reviews for any debt managers you are considering. This is an ideal method of separating
the good companies provide good service. Be aware of companies who have more than a very small
number of negative reviews buried in positive reviews. Companies may hire people to leave fake
positive reviews, but the negative ones are usually real. The Better Business Bureau tries to verify all
reviews. Better Business Bureau complaints are always verified. Google, Facebook, Yelp and other online
companies do not verify any reviews.

Long story short, the BBB is a good first place to turn when looking for a reputable debt consolidation
company. These can lender offering debt consolidation loans, credit counseling, or debt
negotiation/debt settlement.

Make sure to get everything you set up with the debt consolidation company in writing. In fact, if an
offer in writing is not presented to you voluntarily, you should go elsewhere.

If you have excellent credit, then consider applying for a 0% introductory rate card. You may even be
able to combine all you owe onto this card and pay it off before interest accrues. You can also show your
existing credit cards your new offer and they may offer a similar term.

Balance transfers may not always as good as you're expecting. On top of these things, you will be
charged a fee and the reduced interest rate may last for only a few months to a year.

Debt consolidation programs other than a new loan will negatively affect your credit if your credit scores
are currently good. There is no form of debt relief that will not have an impact on your credit score if
you have good credit. The only way to retain your good credit is to obtain a debt consolidation loan but
if you do not qualify, you should consider other debt consolidation options to get out of debt quickly.
Once you finish a debt consolidation program you will be able to rebuild your credit in often a much
shorter time than you might expect.

Expert advice will be able to help find a path out to get out from under your debt problems. Look for
more resources you can use to learn about debt consolidation. Now that you know all about debt
consolidation, put that information to use and deal with your debt so you can have the financial future
that you have always wanted.

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