Pay/paying off high interest credit cards by refinancing

There exists a small industry, which I describe as the "

debt consolidation

business." It's primary practice and claim is to "eliminate" your credit card debt! I am not a big fan of these companies for a few reasons. Most of these operators are organized under a 501(3)(c) "non-profit" corporation which entitles them a "tax exempt" status, much like a church or charity.

Although I don't profess to be an expert in corporate tax law, I know there are (or were) companies that are literally offering franchise business opportunities in this debt consolidation industry simply because of the ownership advantages of being involved in a "tax exempt business." If I had witnessed only positive results on client's credit dispositions, I would be thrilled with the work they perform and would have aligned with the best of them so I could refer our clients to their beneficial services. Unfortunately, in my experience, I have been disappointed with the results of these companies. If they perform such a terrific service and help families back onto solid financial footing, then the value created for the client would naturally translate into economic benefit (typically profit) for the company, and these operations would be a mainstay in our financial services sector. In my view, they are not. Worse still, much of this "cottage" industry's operating capital actually comes from the credit industry itself which has created inherent conflicts of interest for the consumer and government regulatory scrutiny.

Clients who have come to me after becoming involved in "

credit counseling

" have usually told me a similar story. They told me that the counseling company said " they would negotiate the rates down on all my cards. They also said they would negotiate down the balances on my debts; then they said I would make one easy payment to them and they would pay all my bills." In theory, this all sounds great, but in practice the process hasn't delivered to the degree that instills the confidence in me to the point where I would recommend their services. As a consumer, you can perform the same "negotiations" with your creditors that a representative would perform on your behalf. Some folks have a fear of this process because of its nature or their lack of knowledge, but they're YOUR finances, and you are going to be left with the results. See (Link To Credit repair) for more suggestions on this.

There are two main issues I have with the results that credit repair companies have produced. First, they often charge setup fees to begin their services; this adds balance to your total debt. Secondly, they are often responsible for inconsistent payments to the client's creditors after the client has agreed to and made good on one single, larger payment to the company. I have had many clients complain of this.

When these credit counseling organizations show up on credit reports, it can create havoc when applying for a new home loan. There are many circumstances when underwriters will view the existence of creditors, with a "credit counseling tag" on them, in the same context as a bankruptcy. The underwriting guidelines they utilize make the judgment this consumer needed outside help to manage their finances. If many underwriting scenarios are going to view the involvement of a credit counseling company as a bankruptcy, then perhaps it is wise to consider bankruptcy (and the anticipated discharge of the debts) as an option to resolving your situation. Please consult a bankruptcy attorney or expert.

As an alternative to credit counseling or bankruptcy, if you own a home, perhaps you might consider refinancing or applying for a second trust deed as a sound solution to your financial challenges. One Touch Lending has helped thousands of homeowners through difficult times and kept in touch with them as they have gone on to later flourish with financial success.