Debt consolidadation- is do it yourself -good idea?

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  1. Karina S. profile image60
    Karina S.posted 13 years ago

    Debt consolidadation- is do it yourself -good idea?

    1. profile image52
      Charles Turnerposted 13 years agoin reply to this

      Yes, you'll save money by doing it yourself, and it really is just a matter of knowing what to expect and then actually dealing with it. You have to be a proactive individual and also be ready for a hassle.
      Get a good book like Kevin Trudeau's "Debt Cure$" and follow it to the letter.
      Organize yourself, keep track of who you talked to and what you/they said, and you'll be out of debt sooner than if you went the debt consolidation way.

      1. KeithTax profile image72
        KeithTaxposted 13 years agoin reply to this

        You can get out of debt without a consolidation company. Avoid Kevin Trudeau. He has a criminal record and has been sanctioned by the government more than once. I prefer the Dave Ramsey program and books. Dave Ramsey provides a simple step-by-step plan to get and stay out of debt.

        1. Karina S. profile image60
          Karina S.posted 13 years agoin reply to this

          I do noy know about Kevin Trudeau, but I read Dave Ramsey and i agree he is good.

    2. frynch profile image61
      frynchposted 12 years agoin reply to this

      You can TOTALLY do it yourself..I was slightly scammed by a debt settlement company and now am handling it myself just fine

  2. Ivorwen profile image67
    Ivorwenposted 13 years ago

    Most debt consolidation programs ruin your credit, so unless you are already behind on payments, doing it yourself is the only way to go.

    1. Karina S. profile image60
      Karina S.posted 13 years agoin reply to this

      Ivorwen, i think so, too. Nobody will do it better , than yourself

    2. profile image0
      DoorMattnomoreposted 13 years agoin reply to this

      Yeah, I tried a debt consolidation place, after forking over almost 900 dollars, I still almost got sued by the credit card company. I am now paying off my cards on my own.

  3. Jonathan Douglas profile image61
    Jonathan Douglasposted 13 years ago

    Kevin Trudeau is a skilled marketing strategist similr to the Slap Chop guy. They know how to sell-not to help

  4. blowww profile image60
    blowwwposted 13 years ago

    I would prefer to use do-it-yourself debt settlement solution since this is the best and effective way to solve some debt problems. I had the experience having thousands of credit card debts and at that time I tried to do-it-myself and finally I could reduce the total debts.

    1. Karina S. profile image60
      Karina S.posted 13 years agoin reply to this

      So you were able to reach debt settlement on you own without any help.

      Good for you!

  5. Wageslip profile image59
    Wageslipposted 13 years ago

    I went to a debt counsellor in an attempt to solve a business debt. They made it seem so easy and as my whole scenario was effecting my health I took their advice and paid them their fees.

    In hindsight, I would have researched more and what I know now is helping me through bankruptcy which maybe I could have avoided. With bankruptcy nothing is your own anymore, but at least with trying to solve your own debt, you will have control over what you do and what is yours to keep or sell to survive.

    1. Karina S. profile image60
      Karina S.posted 13 years agoin reply to this

      Wageslip, i agree with you about bankruptsy. It is not pretty

      1. Wageslip profile image59
        Wageslipposted 13 years agoin reply to this

        You just have to have a sense of humour or you have no chance. I believe there are happy people and miserable people and no amount of materials or wealth will ever change that.

  6. Wayne Orvisburg profile image62
    Wayne Orvisburgposted 13 years ago

    I think so. You are going to pay someone else if they do it. And they may end up just ripping you off. SOme creditors just want to cover their rearends at the moment so they are a little easier to deal with. I wrote a hub on my experience. Wish more people would find it so it may help them.

    1. Karina S. profile image60
      Karina S.posted 13 years agoin reply to this

      I agree with your opinion, an i am going to read your hub. Thanks.

  7. profile image0
    Ghost32posted 13 years ago

    I've got 2 bankruptcies in my past (including one I held off for many years before giving up and filing) and a hub or two on the topic as well.  Bottom line, for me at least, is that I would never use a debt consolidation outfit.  Like others have posted, they tend to ruin your credit (if you still have any left).  Additionally, some of them actually work both sides of the street and are secretly in league with the creditors, getting a bit of a cut for getting you to pay up (sort of an even sleazier version of the usual collection agency).  On top of that, some of the folks in those  places are just as nasty to work with as any repo guy--my wife (before she was my wife) once bounced a check, I went in to pay it off in full, and just about had to whip the entire staff before they'd accept my money. 

    Can you tell I don't like 'em much?

    There's even one more factor--and to me the most important one:  If you can stand the heat, you DON'T want your bills all jammed into  a single payment for any reason.  The enemy--and by this time, the creditor(s) = your enemy, big time--can bring all their pressure to bear on a single pressure point that way.

    My preference (and I've used it successfully a number of times; NOT every jam I've been in financially ended in bankruptcy) is to handle it myself.  My usual approach is to hammer the smallest bill(s) first, start sniping around the edges of the overall La Brea tar pit that's sucking you down.  If you owe, say, $100,000 in total, but can eliminate a bill that only cost you $20 a month tomorrow--WOW, is that a liberating feeling.  I always (when doing this) log the entire debt load  in a journal where I can see my progress at a glance, and highlight any final payoff of even the smallest debt so I can actually enjoy any success along the way.

    Good luck.  It's not easy lacking green.

    1. Karina S. profile image60
      Karina S.posted 13 years agoin reply to this

      Thanks for sharing, interesting insights of debt consolidation companies.
      Good to know.

  8. Miss Belgravia profile image60
    Miss Belgraviaposted 13 years ago

    Another issue to think about is that forgiven debt is taxable as income. If your creditor agrees to lower your interest rate and you can then afford to make payments, great. But if you negotiate a balance reduction, the amount of the reduction will count as income, and you'll be taxed. If you are completely over your head with debt, you should talk to a bankruptcy lawyer. Most will give you a free consultation, and you can find out whether that would be a better option for you. In the interest of full disclosure, I am a bankruptcy attorney myself, and while it may seem to be an extreme solution to your problem, you should explore your options. A bankruptcy can protect your assets and give you a chance to get back on your feet if you're really in desperate straits. Good luck.

  9. Karina S. profile image60
    Karina S.posted 13 years ago

    True, Miss B. is right, be ready to pay taxes on the amount of the reduction

  10. rmcrayne profile image92
    rmcrayneposted 13 years ago
    1. Karina S. profile image60
      Karina S.posted 13 years agoin reply to this

      Not yet, I am going to read it now. Thanks, rmcryne.

      1. pato7 profile image59
        pato7posted 13 years agoin reply to this

        A more advisable first step towards debt relief would be to contact a reputable credit counsellor. Credit counsellors sit down with you and help you assess your current financial situation. After a consultation, you may find that debt relief isn’t even the best option and that there is still a way for you to work things out on your own. Credit bills can indeed be intimidating, but this doesn’t mean you have to succumb to the first debt relief sales call you get. Do your homework. Shop around. If you find that debt relief is indeed the best way for you to handle your debts, then compare a few companies first to see which of them can be of the biggest assistance. You may even want to check these companies out with the Better Business Bureau just to make sure that it is safe to do business with them.
        Read this hubpage

  11. solvemybadcredit profile image60
    solvemybadcreditposted 13 years ago

    It really depends on your situation and abilities. If you are confident that you are able to evaluate your financial situation and set up a bad credit consolidation plan, by any means. But you have to take into consideration that credit counseling companies have a huge experience and hold a better chance to negotiate a good deal. Some of these companies offer a free consultation, therefore you have nothing to miss. The first step is to try and negotiate with your creditors.

  12. Marisa Wright profile image90
    Marisa Wrightposted 13 years ago

    Debt consolidation usually means taking out a big new loan to cover all your existing debts.  They make it look good by giving you a better interest rate, but they achieve that by spreading the loan out over many more years, so you'll end up paying a crippling amount in interest and you'll be in debt forever.

    Plus, hidden in those repayments are ongoing commissions to the debt consolidation company, which only increases your costs.

    There's no benefit in having all your debt with one company, and even if you do it yourself it will cost you to change.  That's just paying extra for laziness.  Talk to your existing lenders and see if you can agree payment terms.

    1. neversaydie profile image80
      neversaydieposted 13 years agoin reply to this

      This is true.   My credit card provider actually contacted me and offered to freeze the interest on my debt if we could come to a mutually satisfactory payment arrangement.   She went through, my income (which is currently nil as my business is earning me nothing), my assets (again not much of them anymore as I ended up remortgaging to save my business) and benefits (none for me as I am neither old, unemployed or infirm) but a state pension for my husband.     For those in genuine need, I would advise they contact their creditors individually or if in the UK seeks help from the Citizens Advice Bureau.

    2. profile image58
      Ray Twoposted 13 years agoin reply to this

      There is a difference between a debt consolidation "loan" and debt consolidation.

      A debt consolidation loan is just using debt to pay debt. Not a good idea.

      A genuine debt consolidation generates substantial interest savings. With timely payments  it IMPROVES your credit score. Since in a professionally run debt consolidation you pay your debts in full, the banks have no reason to penalize you... they like getting paid smile In short, this type of debt consolidation is not a negative entry on your credit report.
      Sure, they would like to continue to get 30% interest, but they really don't mind taking much less interest if they are getting paid.

      Essentially your revolving account becomes and installment account. That represents a new agreement with the bank. If it is paid in accordance with the monthly payments, you will have met the terms and that is nothing but good news for your credit score.

      Debt settlement is pure financial poison. If you do some real research you will find it destroys your credit. Your accounts need to be in default before your creditors will negotiate. If you are talking big numbers, the major creditors just sue you. If you do get to settle any debt, anything forgiven over $600.00 is taxable.

      Of course the 15%+ fees of your total debt is mostly paid in the first few months. If you drop out, and most do, you forfeit those fees you have paid. It actually gets worse. On top of all that it stays on your credit report for 7 years.

      Chapter 13 bankruptcy is a court ordered debt payment plan. It is a negative entry on your credit for 7 years. Chance are if you can afford these payments you can do a debt consolidation and not ruin you credit.

      Chapter 7 Bankruptcy is a court ordered liquidation of your assets. It stays on your credit record for 10 years.

      Hope that helps a little.

  13. MomCrafting4Fun profile image60
    MomCrafting4Funposted 13 years ago

    We did it through a debt consolidation company.  An dthen a few months after signing the paperwork we found Dave Ramsey's books.  We wish we would have had the books when we were so desperate.  It will take work and credit card companies aren't always the easiest to deal with, but if you have the time and energy to invest you can do it yourself.

    We were so desperate and feeling so hopeless and we had no idea where to start so going through a debt consolidation company made sense to us.

    Whichever you do make sure you make a life change or you will find yourself back in the same situation in a few years.

    If you haven't already, I would recommend you reading Dave Ramsey's books.  Total Money Makeover is a simple, easy and inspiring read--it make syou feel hopeful.  But if you are looking for the nuts and bots on what to do read Finacial Peace.

    1. getxposed profile image60
      getxposedposted 13 years agoin reply to this

      People that actually use a debt consolidation service are usually at a panic stage so they scour the net to find such services but if you're not in a desperate need the do it yourself. It's not that difficult. I myself have been debt free for over 6 years now and love it.

  14. J. McCoy profile image61
    J. McCoyposted 13 years ago

    I've seen too many people pay exceptionally high fees to debt consolidation companies.  There are some reputable non-profits out there but it's much better financially speaking to do it yourself. Dave Ramsey's program is excellent. People that refuse to do budgets may prefer David Bach. Both are easy to read or listen to as they're down to earth. Ramsey is hilarious and well worth your time.

  15. profile image53
    jmcdonaldsposted 12 years ago

    Debt settlement helps you in reducing your credit card debt & other unsecured debts. yourdebtfreeadvisor provides credit card debt settlement,tailor made plans for debt negotiation and debt settlement giving you relief from your debts & taking the burden off your shoulder.Visit for free consultation

  16. Smaridge01 profile image68
    Smaridge01posted 12 years ago

    I firmly believe that drastic measures are sometimes required in order to get one's debt under control. But I believe that there is a lot we can do for ourselves before calling an outside firm. Especially considering those outside firms are all going to want some of our sadly scarce money!

    I truly believe in the snowball payment plan for debt reduction. I've used it and I know it works. It doesn't cost a cent to set yourself up to follow such a plan, and the positive feedback you feel when you get first one and then another balance paid off is awesome!

    In fact, consolidating your debt all into one balance would make such an approach very difficult, so I don't know that I like the idea as much as one would think.


  17. profile image50
    jdethuinposted 12 years ago

    If you are going to use an outside firm for debt consolidation it is important to research the firm and make sure you cover yourself. Find out information about the debt consolidation firm such as: are they connected to the debt providers in any way; are they out for my interest or just to make money off of me; and if they do consolidate my debt what will be the consequences, will it hurt my credit or will I still be liable for the debt being consolidated.

  18. megmccormick profile image69
    megmccormickposted 12 years ago

    I have a lot of debt because we helped my daughter through college (a really expensive one) and I've been chasing the internet marketing dream.  My debt elimination plan for the next two years...I just took on more/extra work and raised my salary (I didn't want to but I could so I just had to). I'm going to have some long days and nights for the next 24 months (because I'm not giving up on my writing/blog empire) but I'll be debt free.  Then I'm following the old plan of pay off the highest interest card first by putting my extra salary onto the payment I already make...paid off in 6 months, then take that entire amount and add it to what I'm already paying on the next highest interest card...paid off in another 5 months, then I take all of that and add it to the next debt combined with what I'm already paying on that and that's gone in just 4 months...etc. Common sense, boring, I have to bite the bullet for most of the next 24 months...but then sweet freedom.

    1. ShawnS. profile image60
      ShawnS.posted 12 years agoin reply to this

      Good for you Meg.   Still, bad things do happen to good people and if they need to, they should speak to a bankruptcy trustee if they are in Canada.

  19. Zubair Ahmed profile image73
    Zubair Ahmedposted 12 years ago

    Hi Karina S,

    The dreaded word DEBT... unfortunately many of us find ourselves in this situation now-days and it can be the most stressful situations to be in.  I certainly say go for it yourself and don't involve the FEE-hungry agencies that don't actually care much about your well-being but the fee they will get from you.  My experience in the UK having gone through debt problems before, I decided to do some research on debt management then did everything myself by contacting each and every one that I had a debt with.

    Talking with many debt consolidation agencies the feeling i got was pay-us-first then we'll work on your case and if your lucky we might be able to negotiate a deal for.

    All the best

  20. debtisevil profile image61
    debtisevilposted 12 years ago

    I am new to this site, but completely agree that trying to do it yourself is a good idea.

    I am in debt and have purposefully avoided debt maangement companies, as I find that they are in it for themselves and all they are really doing is negotiating on your behalf, which you could do yourself.

    whenever I have phoned the companies I owe money to, I have found that they are usually quite responsive and willing to help. I am really committed to getting myself out of debt and I think this comes across to these companies.

    Anyway, just wanted to put my opinion in here.

    well done on a good post!


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