Debt Consolidation Advice | Debt Solutions

All Credit Cards (Regular, Store Cards, Gasoline Cards)
Credit card debt is the most popular type of debt accepted in Debt
Consolidation
Any Unsecured (Signature) Loans
These are primarily personal loans also referred to as signature loans. There is no
collateral securing this type of loan.
In some cases the lender may have the applicant submit a list of household goods
in order to receive such a loan. This is just a scare tactic lenders use to make the
applicant think that they will come an repossess their furniture, appliances, ect.
if they default.
That will not happen! This is not a secured loan and can be included.
What About a Personal Loan from a Friend or Relative?
That can be included, but it will be up to the person who lent the money to accept
or decline the proposal from the consolidation agency.
With traditional lenders, a reputable consolidation company has agreements in
place. They should know based on the consumers situation, if a creditor will accept
their proposal as opposed to a friend or relative that loaned them the money and can
either accept or decline. It is recommended that the consumer consults the friend of
family member before submitting to debt consolidation agency.
Student Loans
Most government student loans are very low interest. Unfortunately the government
does not negotiate.
They will accept a student loan into a consolidation program, but the payment and
interest will remain the same.
So why include a student loan? For most consumers it's the convenience of one
monthly payment for all creditors that attracts them to a consolidation program.
So the advice is to go ahead and include all student loans. But if most of the
consumers debt consists of only school loans, there are special programs to
consolidate student loans.
Closed Utility Bills
Consumers may include any utility bill (gas, electric, phone, cable ect.) only if the
account is closed and they are not using the service of that utility company.
Usually these type of accounts are from previous residences.
Collection Accounts
Any account that is in collections can be consolidated. There is usually no
exception to the rule.
All Repossession Accounts
If a consumer owes a balance on any account that was defaulted on and the
collateral (car, property, boat, ect.) was repossessed, the collateral no longer
exists and the debt can be consolidated.
Medical Bills
All medical bills can be consolidated.
Any Other Unsecured Debt With No Collateral
If you are unsure if a certain debt qualifies, ask your consultant or contact us with
the question.

There are a few other things consumers should be aware of when applying for debt
consolidation.
Unlike bankruptcy, consumers may choose the accounts that they want to consolidate
and the accounts that they want to keep out of the program. In other words, you don't
have to consolidate every debt you have.

The reason it's important to know this is because the creditors require that all revolving
accounts (like credits cards) to be closed when accepted into a debt consolidation program.
This only makes sense since the goal of Debt Consolidation is to eliminate debt, and the
first step in achieving this goal is to stop charging.

A few things to know about American Express, Credit Unions and Checking Accounts:

American Express
If a consumer has an American Express credit card, it's advised to include it in a
consolidation program. The reason is that American Express is the only creditor
that conducts regular credit checks on all their clients. If an account is excluded,
American Express will eventually find out that the consumer in a consolidation
program and take away their charging privileges.
On the other hand, if a consumer completes the program without late payments,
American Express will eliminate their interest.
Credit Unions
If a consumer has a loan or credit card with any Credit Union, they may want to
consider keeping them out of Debt Consolidation. Most Credit Unions are a privilege
and carry a much lower interest rate than other creditors. Many consumers
that use Credit Unions have additional accounts with them such as Insurance
Policies or Checking Accounts. If they consolidate a credit card or loan from a Credit
Union, they may lose all other accounts or policies associated with that lender.
Checking Accounts
If a consumer has a credit card and checking account with one bank, their credit
card may be used as overdraft protection for the checking account. In a case as
such, they should close out the checking account and reopen with a different bank.
Otherwise when the credit card is accepted into a consolidation program, they may
loose the checking account.

Type of debts that are Not Acceptable for Debt Consolidation:

Garnishments
Usually associated with child support, this is when the employer garnishes a
part of the wage as ordered by the Courts.
Child Support
No one can change the outcome of a Court Order.
All Judgments and Court Orders
Payday Loans or Advances (unless in collections
Rent To Own
Usually pertains to furniture and appliances that are rented with the option
of owning.
Time Shares
Just like any real estate, this is a secured debt.
Current (Open) Utility and Phone Bills
Consumers may only include utility bills (gas, electric, phone, cable ect.)
if that account is closed and they are no longer using the service of that utility
company.
Any Type of Tax or IRS Debt
Traffic Fines
Court ordered, no exceptions.
Business Accounts
Consumers may not include any account that solely a business
(not the individual) is responsible for.
Any Secured Debt Tied To A Major Collateral
In other words, anything that can be repossessed (Car, Home, Boat, ect.)
would not qualify for any debt consolidation program.

If you are unsure if a certain debt qualifies, you may ask your consultant or contact us
with the question.

These Debt Consolidation laws are created and governed by the creditors. Only the
creditors may change them. If a Debt Consolidation agency ever tries to convince a
consumer of anything other than what is outlined in this report, they are not the
type of agency that a consumer should get involved with. Detailed information about
choosing the right agency to consolidate debt can be found here.

Victoria Egnatova
Senior Financial Consultant

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