Debt Consolidation Program

A typical debt consolidation program offered by a credit counseling agency is called a debt management plan. The CuraDebt team is experienced with debt management and consumer credit counseling from having offered it in the past. With this knowledge, you can receive a balanced evaluation if it is truly the best program to help you accomplish your financial goals.

CuraDebt also offers a debt settlement type of debt consolidation program where the balances are negotiated on, instead of solely focusing on adjusting interest rates and late fees.


A caller was considering a debt management program. She had $22,000 in debt and was making a payment of about $440 with interest rates on average of about 16%. She was feeling like she was going nowhere with the minimum payment and the balances were not going down. She had been paying for 18 months on the accounts already (e.g. she had paid back $7,920 and the balances did not move). A few extra hundred dollars per month would make a big difference in her lifestyle and give her more peace of mind. She had heard about debt management on TV and figured if it was on TV it must be a good program.

She had gone in to speak with her local consumer credit counseling agency. She was told that the credit counseling program was the best program out there to help the individual with their debts because it would, “lower their interest rates, stop over the limit fees, and get them debt free in a much shorter time.” The credit counseling agency went on to explain that “any other program out there will damage your credit and with a consumer credit counseling program there is no affect on your credit at all.” The new payment would be $485. She was very detail oriented and got a breakdown. This would be $435 to the creditors per month plus $50 monthly fee to the credit counseling agency for 70 months. All done, she would pay $30,450 including $3,500 in monthly fees to pay off her original debt of $22,000. She was skeptical but the credit counseling agency was very pushy and encouraged her to get started right then and there. She decided to investigate further.

She had a good friend who was a lender and she asked, “What could be the affect on my credit?” The lender explained, “There are two things you must understand. One is credit score, and the other is credit worthiness. Right now you have a high credit score but you have $22,000 in debt and are just paying minimum payments and interest. The debt isn’t going anywhere. You are not credit worthy and neither I (nor anyone I know) would give you a loan because you can’t pay it back. Additionally, if you enroll in a credit counseling program, many lenders look at that as equivalent to a chapter 13 bankruptcy because a third party is making your payments for you. So, my recommendation is that if you can pay your unsecured debts off in full, or make more than the minimum payments to be done quickly, do that first. If you’re treading water on your debts, while I used to recommend consumer credit counseling 20 years ago, the program now doesn’t work well. The creditors don’t reduce interest rates much – they used to go to 0% in some cases but not anymore. I think it’s actually worse than just paying more than the minimums.”

Her lender friend continued, “My suggestion would be to speak to a reputable debt settlement company to see if that would work for you so that you can get your debts taken care of faster and save more money. Then, when you are done, keep on saving the same amount in a savings account so that you have cash and can rely less on credit. I give you this advice as a friend who makes his money giving out loans – I don’t want to see you enslaved to creditors as I see so many people. Then, if you want to get a home loan, car loan or other large loan, you can do so much more comfortably and not risk losing your home or car because you can’t afford the payments.”

She decided to go with the CuraDebt debt relief program for money savings, lower payment, and overall more flexibility.

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Unsecured Debt Consolidation Loan

As another type of debt consolidation program, some people look to unsecured debt consolidation loans. Many  of these loans are advertised on television, radio, internet, newspaper, and other places. The unfortunate fact is that most have astronomical interest rates and put the individual in a worse place than they were before. For example, payday loans are a type of unsecured debt consolidation loan, but the interest rates are extremely high. Credit unions offer unsecured loans, but often unknown to the individual getting the loans, the credit union may have secured the debt against other things the client owns. The online ‘crowd funding’ unsecured lenders add various origination fees and are often very aggressive when a person has a challenge paying back the loan.


A caller had approximately $12k of unsecured debts and was considering the CuraDebt debt relief program.

Overnight, she decided to check with her bank and see if they would help her.

She called them in the morning and they offered her help with a debt consolidation loan, they rang around her creditors and got payoff amounts totaling $12k. The bank offered her a loan for 5 years at $294 per month with interest. Doing the math, 60 months x $294 = $17,640. So, with an unsecured debt consolidation loan, she would pay $17,640 to pay off her loan of $12k. She decided to go with the CuraDebt debt relief program to save money, have a lower payment, and enjoy much more flexibility in her payment.

The best solution for her was to leave the debts where they were (on the individual credit cards) and get help (instead of getting an even larger unsecured debt consolidation loan).

Secured Debt Consolidation Loan

Often, if you have a home or other property with equity, you will receive offers to take out a secured debt consolidation loan against your property. The lenders often claim that this is the best way to eliminate your debts and that it is the best choice to maintain your credit score.

While this sounds attractive, in reality, it is one of the riskiest types of debt consolidation and decision a person can make. For example, including loan and closing fees, to pay off $12,000 in unsecured debt, the new loan could be as high as $25,000. In addition, the unsecured loans are now replaced with a secured debt. Now, you still have a monthly payment, but if you fall delinquent or miss a payment, you risk foreclosure and losing your property.

While the payment part of your credit score may still look OK, your credit worthiness is extremely low because you cannot afford to take out any new credit, now you owe more debt than before, and you now owe secured instead of unsecured debt. This is why taking out a loan secured against an asset is so risky. If you’re in financial troubles and you are having a hard time making your monthly credit card payments, then it will probably be just as hard to make another loan payment on your property.

Additionally, statistics show that 70 percent of Americans who take out a home equity loan or other type of loan to pay off credit cards end up with the same (if not higher) debt load within two years.

Since your spending habits have not likely changed, in a few years, statistics show that you will probably have your home equity loan payment plus a new payment on your credit cards (that you had paid off). The bad news is that in a few years you may be so strapped financially that the only option is bankruptcy and potentially losing your home.

The whole point of debt relief is just that, to relieve you of debt and the stress that comes with it. At CuraDebt our first goal with all clients is to educate them on their options.

The best solution for unsecured debts is to pay back your credit cards in full by paying significantly more each month than the minimum payment. However, if you are in a situation where you are finding that the minimum payment is causing challenges in your finances or if your accounts have already gone delinquent, the best solution is a debt relief program because settlements can be reached with unsecured creditors. With secured debts (e.g. a home loan), the only solution in most cases is to lose the asset (e.g. lose your home).

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What Is The Best Solution?

If you are considering a debt consolidation program, chances are you have debt and are looking for a solution. Your CuraDebt counselor can advise and give you free information on debt consolidation. Our counselors counsel thousands of people each month and nine times out of ten, after speaking with callers, the best option is determined to be debt settlement.

Debt settlement is a process in which you accumulate funds in a trust account (or other dedicated account) to use for paying the negotiated reductions on your debt. CuraDebt works with consumer protection attorneys to identify collection violations that could result in debts dismissed or reduced and/or cash awards for the client. For the remaining debts, CuraDebt negotiates agreed to resolutions on your accounts with the goal of saving you the most money possible, being as flexible as possible, and getting your debts resolved as quickly and painlessly as possible.

In this type of program, your home and property is not affected, if you miss one payment, the program is flexible, and the program is designed to reduce the balances as much as possible and resolve the debts based on the payment or funds that you have available.

If you’re wondering whether or not debt consolidation is for you, call CuraDebt for a free consultation, 1-877-850-3328. Our expert counselors will listen to your unique situation and inform you of the most logical and effective way to help you get out of debt. In addition to providing you with valuable information about debt consolidation services, they will attempt to help you understand your finances better and encourage you to make the most educated financial decisions that you can.

Deciding to consolidate your debts is a risky decision and should not be taken lightly. Invest the time to research the best debt consolidation program and debt elimination services thoroughly before committing to a debt reduction program.

Feel free to ask our professional debt counselors any questions or concerns that you might have and let them help you decide if debt consolidation is right for you.

At CuraDebt, you can rest assured that our experts have your best interest at heart and will provide you with excellent free advice concerning your individual financial hardship.

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