Debt Consolidation

Credit Counseling Video #2

Debt Consolidation:  Fundamental Evaluation of Service Options

Hi. Welcome to the Falcon Credit Management video series on Debt Settlement.  I am Loss Mitigation Specialist and Nevada Licensed Debt Adjuster Damian Falcone and in this video series we will discuss all the frequent situations associated with Debt Restructuring (while avoiding Bankruptcy).  We will begin with a fundamental evaluation that everyone should use to decide where they are in the process and what form of debt help they should use based on the options available.  Our first option is Debt Consolidation.  

This is Get Settled - your source for consumer debt management information.  As always, for even more information, go to

There are a number of very common reasons why people end up with outstanding bills and require debt advice  for: medical services, credit card debt, department store cards, personal loans, student loans, and bounced checks.  Home mortgages are typically handled through loan modification.  These bills are unsettling for a number of reasons but The most important thing is to address your situation quickly and with techniques that are best for you.  The easiest way to assess your situation is to understand the services that are available to You from licensed Debt Consolidation Companies, Debt Management Companies, andDebt Settlement Companies.  The first service we will discuss is Debt consolidation.

Debt Consolidation is a service consisting of a borrower taking out one big loan to pay off their smaller debts – with little if any negotiation.   Debt Consolidation is typically the best move for consumers that are current on their payments and able to pay their balances while adding as little disruption to their lifestyles as possible.  The big loan is frequently from equity in an asset such as a home.  Since the account is up to date with payments these consumers don't have to worry about debt collection, a debt collection lawsuit, or the tax consequences of a 1099 c cancellation of debt.

The Benefits to this technique are:

  1. it is relatively low stress – if you are paying someone the money you owe them typically they will respond by offering you improved services to get you back to being a customer, they are happy to get the money, And will most likely speak to you in a nice way at all times;
  2. You will have 1 convenient payment and it is likely that if you are re-financing your home or taking out equity your interest rate will be better than the rate you were getting on the smaller items;
  3. you have the opportunity to stretch the payments over a longer period of time; and
  4. The credit bureaus should report – Paid as Agreed on the paid smaller accounts while reporting additional positive information for the new loan.
  5. You likely won't have any reason to send someone a cease and desist letter.

This may be the most suited service for performing the work yourself or having a service provider work purely on results – typically qualified service providers cannot provide service based purely on performance due to the amount of variables or other peoples behaviors that can affect the outcome - but in this situation it would be logical to find a qualified provider that would only require a minimal escrow deposit – This is money that is only released to the provider if some behavior of the client negatively affected a settlement in all other situations the money is returned to the client or deducted from the performance based fee.

Negotiating Balances is always an option and should be considered in every Debt Management plan, based on the expense involved with collecting money.  But for people who have the money to pay their bills or people who have been living with the debts for a long period of time and finally receive a settlement, inheritance, or winning lottery ticket -  they shouldn’t expect the same reduction as someone who doesn’t have the money and typically they don’t want the stress associated with negotiating debts.

The Negative side to Debt Consolidation is

  1. You are most likely taking unsecured debts that could be discharged in a bankruptcy or more difficult to collect on and paying them off with a new secured debt.  In the event you experience a financial hardship in the future the new secured debt if secured by your home could cause you to go into foreclosure or could remain valid for 3-5 years even after you file for Bankruptcy.
  2. It is expensive – Money Today Is Worth More Than Money Tomorrow that’s why people pay interest And that same fact can motivate consumers to post-pone paying their bills - This results in a mountain of debt which many times results in the same situation repeating itself.

So in Summation:  Debt Consolidation Can alleviate many bills in the short term; it can be relatively low stress; and potentially beneficial to your credit report.

Unfortunately it will likely turn an unsecured debt into a secured debt; it requires money or credit in the short term; and it feels so good you may be inclined to do it again.

All Las Vegas Debt Management and Las Vegas Debt Consolidation companies are required to have a Debt Management License

In our next episode we will discuss Credit Counseling Agencies.  Until then, I’m Loss Mitigation Specialist Damian Falcone and this is “Get Settled.”


Previous Credit Service Organization License # 3501
Previous Covered Service Provider License # 3379
8430 West Lake Mead Boulevard, Suite 106
Las Vegas, NV 89128
Telephone: 702-489-6575
Fax: 702-489-6576