Will Debt Consolidation Close All Your Credit Cards?

When searching for a solution to problems surrounding personal finance, it is always a good idea to get the point of the assistance you are receiving and understand the consequences and the results of any program you get involved in. People that seek out the assistance of a financial expert to help them get their monthly debt under control usually have choices even in the most extreme of circumstances. When bankruptcy is filed for there is a list of assets that are not covered by the bankruptcy. A judge may decide to ignore that list, but the person filing for bankruptcy can still submit one for consideration.

Collecting a multitude of high interest rate credit card accounts can cause a great deal of strain and stress on a person’s credit report, and on their entire financial portfolio. The accumulation of high interest debt will lead to increased monthly payments and that can cause the monthly budget to be difficult to manage. There will come a time when the monthly obligations will push up to the level of the monthly income, and that is when it is time to get a debt consolidation company involved in your situation.

When people take on the service of debt assistance for the first time they usually have many questions regarding the process and the outcome. One common question is the status of the credit cards after the debt program is put in place.
In the cases where it was necessary to settle the credit card debt in order to get it under control, those credit cards are no longer valid. The payoff amount was negotiated and the accounts were paid off and closed. But in the case of a consolidation loan, that situation could be much different.

The final fate of your paid off credit cards in a debt assistance program is something you will discuss with your debt expert before executing the plan. They will more than likely advise you to cease using the cards, destroy them so they cannot be used and then focus on paying them off. In some cases the choice will be up to the consumer and in other cases closing the accounts may be part of the agreement.

Since it was using the cards that put the consumer in their bad position in the first place, it is recommended that all credit accounts paid off by consolidation be closed.