Debt Consolidation Agencies

IMF Forecasts Slow U.S. Growth, Warns on Debt

The International Monetary Fund Wednesday forecast a slow pick up in U.S. growth over the next half-decade, with continuing housing market woes, high unemployment and its budget problems weighing on the economy.

In the fund’s annual review of the U.S. economy, the IMF also warned the U.S. risks losing credibility in the debt markets, potentially causing a sudden spike in the cost of debt and a downgrade by rating agencies.

“Fiscal policy consolidation needs to proceed as debt dynamics are unsustainable and losing fiscal credibility would be extremely damaging,” the IMF cautioned.

Months of negotiations between lawmakers and the White House over both raising the near-term debt ceiling to pay for the current budget and how to balance the governments books in the coming years have yet to yield a solution.

“The main policy challenge is to implement a substantial and durable fiscal consolidation effort while ensuring that the still-fragile recovery remains on track,” fund staff said.

The IMF said the proposals put forward by the government in February call for too much budget belt-tightening in the near term given the weak recovery and not enough in the years ahead to stabilize a growing mountain of debt. Staff said even President Barack Obama ‘s April proposal for additional medium-term savings may not be sufficient to adequately lower the debt as needed.

Besides reining in entitlement spending and reducing tax expenditures, the fund also proposes that the U.S. raise revenues through a national tax.

In addition to the impasse on debt talks, the risks of the housing market and persistently high unemployment undermining a weak recovery have also increased since last year, the IMF said.

Fund staff said there is the possibility of further house-price declines, said there is merit for further policies to ease the housing-market adjustment. Options recommended by the fund include allowing the terms of residential mortgages to be changed in courts and encouraging the government’s housing programs to participate in principal write-downs.

Unemployment is expected to slowly fall, from 8.9% this year to 8.4% in 2012 and 7.7% in 2013. The fund said the protracted high unemployment calls for a re-examination of the existing job-training programs, warning that with more than 40% of the unemployed out of work for six months or more, there is a good chance of permanent loss of work skills.

Help With Debt Consolidation Agencies

Debt consolidation agencies offer services to you that can help to lower your monthly payments, or lump them into one single payment. They contact your creditors for you, as they are able to negotiate to get your interest rates lowered, and often reduce or eliminate late fees and over limit fees. They also contact your collection agencies, so the harassing phone calls and letters will stop. Which agency to use depends on your individual debts, and your current financial situation. If you have good credit, you may be able to just apply and get a loan to pay your debt off completely. If you have bad credit, however, you may need to opt for a loan for which you will need to offer some form of collateral. Often, this is your home. Before going this route, look into your other options like refinancing your home, or even just a home equity loan. Most of these agencies also offer counselling to help you understand the extent of your debts, and your financial situation before they offer their services to you. Most will offer you a meeting at no charge, so you will be able to shop around and find the best fit. It’s not always wise to go for the first offer that comes your way. They will also help you to handle your ongoing expenditures in a different, better manner, and help you to change your spending habits. Some will offer you everything you don’t need, like additional insurance or offers for investments. Stay focused on the task at hand, which is to lower your debt, not create more. Often, these additional items only cost you money in the long run, and this just isn’t something you’re ready for. If you want to repay your debts, and gradually rebuild your credit, a debt consolidation service is likely the best idea for you. It’s up to you to decide which is best for your unique situation.

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Directory of licensed billing, factoring, collection and debt consolidation agencies, as of October 1, 1980

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