Downsizing is an ugly term that appeared sometime in the last ten years to take the place of a term we all hated even more, being fired.
Well let's take that downsizing term and turn the tables as we use it to describe what can be done to the money you owe.
Let's look at one of your options, debt consolidation, how it works and where to begin.
If we are going to downsize the money you owe through debt consolidation we need to know what we are up against.
Many people feel better about the whole situation by not even acknowledging that it exists.
Bills come in the mail and they go straight to the trash.
No news is bad news.
But in this case we need to know all of the news, good and bad, to help you reverse the damage that has been done.
Make a list of all of your debts and be sure to include both the total amount that you owe as well as the monthly amount.
With this information you'll find great advice at Comprehensive Debt Management.
Debt consolidation is a plan that involves combining all of your debts into one loan.
The total amount you will be paying off is usually much lower than what it would have been without this plan and the monthly payments will be far less as well.
The creditors agree that if they are paid off by the new loan they will take substantially less, after all they do not want to be left out entirely.
If all of your creditors agree to a new lower total that will clear your debt with them, then the new loan will come into play, paying off all of your debt and leaving you with one loan to pay.
If you go this route and choose debt consolidation, one of the most important steps of the process is keeping the same thing from happening again.
You will want to closely look at the new payments and how they compare to the income coming in.
If the new loan payment is still too high, this is not the best route to go as you may end up in the same place again.