If you are having trouble managing your debt, consider seeking assistance with your debt from a non-profit debt consolidation organization. Achieving designation as a non-profit means that the organization is not run for profit like a typical business.  However, a non-profit debt consolidation organization will likely still charge a fee for their services, but it may be at a more affordable rate than a for profit organization. A non-profit deb consolidation organization may offer many options to you concerning how to consolidate your debt including using a low interest credit card, or using your home to obtain a cash out refinance or second mortgage.
 
First, meet with a non-profit debt consolidation credit counselor to discuss creating a debt consolidation program for you. Most non-profits will meet with you in person for little to no money. During this initial consultation, bring all relevant information about your financial situation so the organization will be able to review your information. At the end of the consultation, obtain a copy in writing of all the information concerning your non-profit debt consolidation program. For example, it is important to have the non-profit’s fee in writing in case a discrepancy arise later on.
 
The non-profit debt consolidation organization may recommend that you transfer your debt to a zero interest credit card. If you have a lot of debt on several credit cards, this can be a good option to consolidate your debt on a zero to low interest card. However, it may be difficult for you to qualify for a low interest card. In addition, you may only be able to move debt from your high interest credit cards to a low interest credit card, thus not consolidating all of your debt. There are also many fees and restrictions associated with some low interest credit cards. For example, it is common for the new credit card to charge you a balance transfer fee that can be based upon a percentage of your debt. Also, the low interest rate may only be available for a limited time, like one year. However, if you are able to repay your debt within a short time, this may be a good debt consolidation option for you.
 
If you own a home and have significant equity in the home, the non-profit debt consolidation agency may recommend that you do a cash out refinance or apply for a second mortgage. In a cash out refinance you refinance your home and take out a portion of your home’s equity to use to repay your debt. In addition, you may also consider taking out a second mortgage on your home. A second mortgage is a subordinate mortgage to your original home mortgage, and will not change the terms of your original mortgage. You will be able to lower the interest rate on your debt and you may even qualify for a tax deduction because the interest will be combined with your home mortgage. However, be careful of predatory lenders that offer you more for a cash out refinance than your home is worth. In addition, if you plan to sell your home in the future, this may not be the best option for you in terms of debt consolidation.
 
Debt consolidation can be a confusing process, with many options to choose from. Therefore, to learn more about dealing with debt, visit www.ftc.gov/MoneyMatters. In addition, if you have questions regarding your rights in terms of debt collection, visit http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre18.shtm.