Tag Archives: debt management

Consolidation loans saved me!

Consolidation loans - is it for you?

Consolidation loans – is it for you?

A quick background on how I ended up opting for consolidation loans:

About 8 years back, I was stuck in a vicious circle of debt.  It all started a few years earlier.  I had just married and bought a new house.  At the time I had a good job in what you may call “upper middle management” of a large corporation.  Then the part of the corporation I worked was sold to a Chinese group in a pretty surprising takeover (among other things the company that bought was much smaller than we were).  We didn’t initially expect much changes, but within 18 months practically all production and R&D had been moved to China and it was becoming pretty clear that the main interest of the Chinese had been the brand and intellectual property, and they never had any intention of keeping any real operations in the US.

As a result of this I was laid off.  I got a new, pretty good, job within 10 months.  But during these months we had been struggling financially.  We had solved that by basically maxing out our credit cards and buying everything we could on credit.  Obviously not the best situation, but at the time we didn’t have much choice – my wife was pregnant and we had a new house with a mortgage.  And we were pretty confident I would get a job quickly.

What we didn’t realize was the enormous borrowing costs on these types of credits.  Even after I got the new job it was clear that we were going to have a problem paying back the debt.  Facing defaulting on our house mortgage we were several times forced to increase our limits on our credit cards (my salary was pretty good so increased credits was easily accepted) and using credit card debt to pay the house mortgage.

The situation kept escalating and caused a good deal of stress and anxiety.  Male pride prevented me from talking to anyone about the problem, but in the end I felt I could no longer handle it and contacted Ardwine Schultz, a local debt advisor.  For me this was a huge turning point.  Not only did I get to sit down with a professional and really look at my situation objectively and try to analyse where the problem arouse, but he also from the first meeting made it clear that this was manageable if only short term consumer debt was converted to longer consolidated loans.

I’ll spare you the boring details, but within 4 weeks he had managed to negotiate a deal with a bank for consolidation loans.  I was able to use my car as security for part of the loan, and the bank accepted an additional charge on the house for another part.  The rest remained as unsecured debt, but still at much better interest than my card debt.  In the end the consolidation loans reduced my monthly repayments by over $650 – enough to balance my monthly budget and end the vicious circle of borrowing more to repay old debts.  The repayment period was lengthened to 60 months, but even after that the lower interest rates gave a total of nearly $10,000 less in borrowing costs over the whole loan period!

Basically consolidation loans saved me from complete financial ruin.  I am not saying it will be helpful to everyone, but I still think it is important for people to be aware of this option and that is why I am putting together this website.  If you do end up in a situation like mine, the sooner you take actions, the better it is!