As the economic recession continues to worsen, the last thing you want to deal with is the burden of debt. If you are deeply in debt and looking for quick debt relief, then debt consolidation may the answer. It may very well be your own personal "financial bailout package".
As the name implies, a debt consolidation agency consolidates your debt . In other words, the agency rains all of the information about your income, who all of your creditors are, and how much you owe to all of your creditors. They then contact each of your creditors, acting in the capacity of an agent on your behalf. You no longer have to deal directly with your creditors. In fact, soon after you sign up for a debt consolidation plan, you can expect that the harassment phone calls will stop, and the collection notices will stop filling your mailbox. This is quick debt relief at its finest.
The agency will negotiate with your creditors for lower interest rates, lower monthly payments, and even a lower payoff balance. You will then send one monthly payment to the agency for the total amount due, rather than sending a payment to each one of your individual creditors. The agency will then be responsible for disbursing the funds to each creditor, after taking a small percentage of your payment as a fee for providing this service.
Within a few short years, your debt will be paid off in full. One point to be noted, however, is that for the duration of the time that you are on the debt consolidation plan, your credit score is likely to take a hit. However, the upside is that your debts will be paid off sooner, and will show up on your credit report as paid in full, so improving your credit score in the long term.