How To Consolidate Bills

Written by Abby Luttrell
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People try many methods to consolidate bills. One method is to get a second mortgage on your house or condo. Think carefully before taking this on. A second mortgage or a home equity line of credit will require your home as collateral, and if you can't make the payments, you could lose your home.

Beware of the Scams

Advertisements on how to consolidate bills may recommend an agency which demands a payment up front. Some may charge high fees to "fix" your credit rating, yet end up doing things you could do yourself. Still others may get you into a Chapter 13 bankruptcy without telling you the complex and lengthy process you are in for.

Some companies may tell you how to consolidate bills - by paying them a hefty fee in order to get a "loan" from their institution. Remember, legitimate creditors never guarantee that the consumer will get a loan, or make him pay an advance fee for it. Credit repair clinics may advise creating a new tax identity or falsifying personal information, both of which could make you vulnerable to federal prosecution.

Debt consolidation companies which work exclusively with non-profit credit counseling agencies are the best resource for debt assistance. These recommended and legitimate credit counseling services can negotiate with your creditors to bring your interest rates down and minimize your monthly payments. These services are legal, inexpensive, and can protect your home, your assets and your credit rating.


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