Debt Consolidation Articles
What Is A California Debt Consolidation Loan
California debt consolidation is no different from any other state's consolidation firms, only that the laws may change slightly. Many of the debt consolidation loans offered in California are lent to families and individuals to help them payoff their debts. If the money is used for any other purpose, the debtor may face penalties. Many firms--instead of giving the debtor cash--will manage the loan them self, using it to payoff the debts owed. Instead of paying your pending debts, you'll now be paying off a loan lent to you by one of the debt consolidation agencies in California.
Rather, if you're paying for a vehicle, mortgage, or credit cards, then the debt consolidation agency will use the loan to payoff these debts, leaving you owing the amount of the loan, plus interest. Don't be fooled! No one can really lower your debts in most instances. Rather, no can lower your debts more than you can yourself. If you contact whoever you owe money to (your creditors) before you land in the hands of the collection agencies, you can negotiate on your own. Some creditors will lower you debts, while others may terminate the debt entirely.
The downside is that if the creditors wipe out your debt, or else lower your debts, then in one instance you'll be a 'cancel." Put differently, the information given to the IRS, which in turns adds the debt back to you by increasing your taxes. The solution isn't entirely a bad deal, since the IRS only comes around once every year, which will give you some time.
Most people with credit cards utilize the cards to their limits and fail to make full payments on time. This is one of the primary reasons why people search for debt consolidation, since most credit card lenders include high rates of interest. If this sounds like you, stop borrowing and try to increase your income; try to get your finances on track before you ever even consider contacting a debt consolidation agent.
Article obtained from: web publishing content