<p style="text-align: justify">A lot of people choose the option of debt consolidation in order to easily repay their debts. While it is true that credit counseling and debt consolidation agencies can help you to repay your debt, in some cases the results can be completely opposite to your expectations. For this reason it is important for you to educate yourself in the matters of debt repayment. In this article we will tell you everything you need to know regarding Debt Consolidation.</p>
<h2 style="text-align: justify"><strong>It’s a third Party Payment System:</strong></h2>
<p style="text-align: justify">Understand that debt settlement is a third party payment system. The first two parties are you and your creditor. The debt settlement agency is an independent third party and has no relation with the creditors. In some cases the debt settlement agencies work in close relations with the creditors but this is only an exception. Even if a debt settlement companies has some sought of ties with the creditors, still they are two independent entities.</p>
<h2 style="text-align: justify"><strong>Not all Agencies provide the same level of service:</strong></h2>
<p style="text-align: justify">If you think that all debt settlement agencies offer the same quality of service then you are under the wrong impression. Understand this that since debt consolidation agencies and creditors are two different entities, the creditors are not liable to comply with the debt consolidation agencies. What it means is that there is no guarantee that your debt consolidation company will be able to successfully renegotiate your debt. Chances are that if you choose a less reputed debt consolidation agency then they won’t be able to renegotiate your debt.</p>
<p style="text-align: justify">In order to get an idea of the quality of service that you can expect from the debt settlement agency, you must check for accreditation. Currently there are two organizations that offer accreditation to the debt consolidation companies. The first one is National Foundation for Credit Counseling (NFCC) and the second is Association of Independent Consumer Credit Counseling Agencies (AICCCA).</p>
<h2 style="text-align: justify"><strong>It’s not meant for everyone:</strong></h2>
<p style="text-align: justify">Yes, you read it correctly. Debt consolidation is not meant for everyone. In order to benefit from debt consolidation, the first thing is that all your balances must be unsecured debts. Don’t worry if you do not understand the term “unsecure debts”. Examples of unsecured debts include credit card debts, personal loans, mortgages taken for buying vehicles etc. Contrary to this, if most of your liabilities include tax debts, divorce alimony, child support balances or any other federal debt then debt consolidation cannot help you at all.</p>
<p style="text-align: justify">Another important thing to note is that you must be confident about your ability to make payments not just for a month or two but for a considerably longer period of time.</p>
<h2 style="text-align: justify"><strong>No more charging until you&#8217;re done:</strong></h2>
<p style="text-align: justify">When you enter into an agreement with a debt consolidation company, you also agree to cut on your spending. If you are someone who is very fond of swiping his/her credit card every now and then, then it can be pretty difficult for you to control it. Hence before you sign up with a debt settlement company, you must be well prepared to live on a small budget.</p>
<p style="text-align: justify">Paul is an associate at National Debt Relief, a BBB accredited business that has helped thousands of Americans resolve credit card debt problems. Consumers can take advantage of a free debt counseling session to discover their options for debt relief with no obligation.</p>

All You Need To Know About Debt Consolidation
