I would first like to state that this will be a somewhat long article and only continue reading if you are someone who is seriously looking for a way to get out of debt in New Jersey. I have been working in the debt relief industry for over ten years now and I have a vast knowledge to how it works. This article is going to focus on New Jersey debt consolidation and New Jersey credit counseling and how some people may feel they have been scammed! There is a large difference between both of these types of programs, while they both can help people they both also come with their downfalls that people must understand before going down any particular path.
Let’s first discuss the prospect of obtaining a New Jersey debt consolidation loan and explain why for the vast majority of people this is a horrible idea! Before going into detail as to why its bad one must understand the motive for people to get this kind of a loan. What people do with the loan money is pay off their credit card debts, leaving them now having to pay towards the loan instead of all the various credit card companies. The benefit of this is twofold, one is now there will only be one monthly payment to the loan instead of many to the card companies; two is that usually a debt consolidation loan will come with a lower interest rate.
Now for the bad news about debt consolidation loans; with the economy the way it is the only real type of debt consolidation loans available will be secured, this is where the problem lies. Most people will use their home as collateral to get the loan. So right off the bat this eliminates the debtors who do not own a home from exercising this option at all. It’s extremely hard to get an unsecured debt consolidation loan even with perfect credit, and even for those people who have never missed a payment and feel they have great credit, the simple fact that they have so much debt hurts their chances of ever getting the unsecured loan.
The problem with the secured New Jersey debt consolidation loan is the risk you will be assuming. You essentially are transforming your low risk unsecured credit card debt into high risk secured debt against your home. Where many people mess up is once again finding themselves stuck once again in credit card debt. Over 75% of the people who obtain debt consolidation loans within five years find themselves right back in credit card debt, except now there is an additional secured loan that must take precedence over the credit card debt. The bottom line is many people either end up losing their homes or have no alternative other than bankruptcy.
New Jersey debt consolidation loans may seem like an easy way out; but you know how the saying goes “no pain, no gain” and that applies greatly to this method of debt relief. The trap is just way too easy to fall into and the vast majority of people never see it coming. The majority of horror stories come from people who mess this process up and the majority does!
Next let us move onto New Jersey credit counseling programs and what they are. Let me first state this is a much better option than getting the loan and is less of a risk, however shares many of the same benefits. The benefits of a New Jersey credit counseling program are to have one monthly payment; which gets paid to the credit counseling agency and then they will disperse it to the creditors on your behalf. The second benefit is the program usually comes with lower interest rates. So as you can see the benefits are similar to the debt consolidation loan without having to assume the risk of getting a loan.
There are however a few drawbacks to credit counseling; one is the high monthly payments, typically close to and in some cases even more than the monthly minimum payments towards the credit cards. Right now with the economy the way it is many people simply cannot afford this option. The second problem is tied into the first; what most people do not realize is that by missing more than one payment the creditors themselves will kick you off the credit counseling program thus revoking the benefits of one monthly payment and low interest. The graduation rate of credit counseling programs is extremely low; most people over the course of the program at some point begin missing payments and get the boot from the program.
So you may be thinking gee what can I do? Both of these options seem like dead ends but I desperately need to get out of debt! Well the good news is that there is another option that has been working wonders for overextended debtors suffering from a corroding economic climate. This option is debt settlement; millions of people have been getting out of debt using this method. The benefits of settling ones debt are greater than consolidation and counseling plans; saving money and time are the backbone of a debt settlement program and no other debt relief method can achieve the results settlement does. Many debtors find themselves out of debt in two years or less and save over half of what they currently owe! With the economy the way it is people cannot afford to be passing up on great savings, especially when concerned with credit card debts!
Click the link below to explore how you can get out of debt!
New Jersey Debt Consolidation
