Consolidation service credit card consolidating debt

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Debt Consolidation: Consolidation is the process of combining all your debts into a single, lower payment by taking out a loan to pay off your creditors.

Companies usually attempt to lower your debt through debt settlement before recommending you take out a loan.

Furthermore, if you have bad credit, debt consolidation loans may come with high interest rates.

In addition to putting your home at risk, many consumers end up prolonging their debt.

Most often, the required collateral is a second mortgage or a home equity line of credit.

This is incredibly risky because if you cannot meet your payments, your home is on the line.

To pursue bankruptcy, you must qualify and complete the entire process, including pre-filing and post-filing counseling.While having one low rate and one payment is an attractive option, many people end up in similar or worse financial situations when attempting credit card debt consolidation.According to Cambridge Credit Corp., a nonprofit credit-counseling agency, 70 percent of Americans who take out consolidation loans end up with the same or more debt after two years.When you begin this process, you set aside funds each month into a separate, insured account.While you're building up your funds, the company or lawyer you've selected negotiates with your creditors to try to reduce the total amount of debt you owe.

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