Free Debt Consolidation

What is Debt Consolidation? Debt consolidation usually involves the mortgage of property. When you decide to mortgage your property, you also need to take into consideration factors such as the process of application, evaluation of the market price of the property to be mortgaged, the insurance cover, scrutiny of the credit records, the legal fees, the closing costs and so on. These costs are usually made upfront by the borrowers. There, are however, borrowers who may have been badly trapped in debts. Misfortunes involving huge debts can occur to anyone regardless of income, jobs, or any other factor. For example, there may be cases of unexpected expenses or health problems. Such borrowers may be low on finances, poor on credit records and may not even have property or assets to mortgage. They may not have the sufficient records or even proper documents to support their application for consolidation of debts. The borrowers may also be harassed by their lenders through their notifications, telephone, mails, verbal threats, and so on. The lenders, in such situations, find themselves in a complete mess.

How Does Debt Consolidation Work? In spite of all these adverse circumstances, the borrowers can seek help from certain organizations who offer free debt consolidation or what may also be known as low doc or no doc solutions. The borrowers do not have to mortgage their property, or make any upfront payments. This, however, does not mean that the borrowers do not need to show any records at all. They have to produce their current credit reports, the details of their lenders, the schedules of their payments including the defaults on the payments, their means of income, their monthly domestic expenses and so on. Based on these documents and records, the counselor at the lender’s office makes a comprehensive assessment of the financial condition of the applicant to arrive at a suitable debt consolidation plan.

Agencies and Organizations offering Debt Consolidation Services There are certain public service organizations such as Consumer Credit Counseling Service (CCCS), which help such borrowers at no profit no loss basis to avoid collections, judgments, and bankruptcy. In some cases, these organizations are funded by the lenders themselves who contribute to the amount so as enable the borrowers to return their loans. These organizations negotiate with the lenders to soften their demands and make them affordable for the borrowers. The government policies also enjoin upon the lenders to increase the minimum repayments to borrowers who have genuine financial difficulties and are sincere in their intentions to pay off their loans.