There are many debt consolidation plans available. In some countries debt consolidation loan is the only way to get rid of debts; whereas in some countries debt management plans are popular among the consumers.
However, all the debt consolidation programs include unsecured debts only.
There is no program that can help you get rid of secured debt because secured debt is different in nature. If a person defaults on a secured debt then the lender has the right to repossess the property, be it a car, house or land, and sell it off to retrieve the fund.
Why you should be careful about the secured debt
That is the reason all the advisers would recommend you to make secured debt such as mortgage or car loan as your first priority. While planning your personal finance or making a budget you have to keep the mortgage payments on top of the list. If you somehow fall behind your mortgage payments your lender might repossess the house. This is not only taxing for your physical and mental health but it makes your credit ugly.
A history of repossession stays on your credit report for long; it reduces your credit score and makes it difficult for you to qualify for financial products such as credit card, loans etc.
Since recession hit the market a lot of people lost jobs and many mortgage borrowers defaulted. Thousands of houses were repossessed and thousands of people are still under the risk.
How to get rid of secured debts
You have to pay it off or you will lose your property. However, there is an alternative; you can sell the property and clear the mortgage debt. Whether it is a car or house, you can always sell it for instant cash and clear the debt. This would help you stop the stigma of repossession from entering your credit report.
The year 2011 is the year when people realized the usefulness of debt consolidation program that can cover secured debt. It is true that no debt consolidation company would offer such plan; but some of the lending institutes are offering affordable fixed rate mortgage products so that borrowers can refinance their properties and overcome financial crisis.
Since you cannot avoid it, look for some ways to clear the debt. If you are worried about your mortgage debt, see if you can make some money from your home. By letting it on rent or by selling it off for quick cash you can avoid repossession. And the new mortgage products introduced by the lending institutes might be useful. Hope more such products will be introduced down the line to help people manage their secured debts.