Ramsey County

Making $ense of Dollars and Cents

March 20, 2006

Debt Consolidation

        For individuals on the verge of bankruptcy or with maxed out, high-interest credit cards, a form of relief can be found in debt consolidation.  Debt consolidation is defined as the process of organizing loans and debts into one low-interest loan that can be paid off regularly. Consolidating debt can help avoid bankruptcy and aid in managing money more wisely. Debt consolidation is also convenient as it is easier to keep track of debt when only one loan payment, instead of several, is due. 

        Central to debt consolidation is a debt consolidation company. It is important to choose a company that will fit your financial needs.  There are many reputable companies doing business in the debt consolidation field, but there are also companies that use underhanded methods to siphon more money from the customer.  Avoid companies that use any of the following tactics:

-    Waiting until you are in dire straits.  Make sure the company starts working on your process immediately.  Some companies will delay any action until the customer if further in debt and has to pay the company more money in the long run. 

-    Charging exceptionally high fees to individuals who have high interest loans.  Ask what is included in the fees – is there a base fee plus extra charges, are fees based on the amount of your debt or on the length of time the company will be working with you?

-    Pressure you to take out a debt consolidation loan that is greater than the amount you currently owe. Using a debt consolidation loan to repay existing debts can be a first step on the road to a brighter financial future but using it to raise more capital and keep spending can lead to even more debt.

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524 4th Ave NE #5, 2nd Floor Ramsey County Courthouse
Devils Lake  ND  58301
701-662-7027
email - ramsey@ndsuext.nodak.edu