Struggling with debt is no fun. In fact the stress, anxiety and sleepless nights can be overwhelming. If you are looking for possible solutions, one option may be debt consolidation. Depending on your financial situation, combining your debts into one, and making one monthly payment to one creditor instead of making multiple payments to many creditors may be a viable solution. Educating yourself about debt consolidation will help you make the best decision, so that you can turn your finances around as quickly and painlessly as possible.
What exactly is debt consolidation ?
In short debt consolidation is a loan that allows you to pay off your current debts with a new loan that has different terms than your current loans or credit cards. A company, also referred to as debt management company, can work with your creditors to restructure your unsecured debt.
Their goal is to solve these basic problems:
- High Interest Rates – Some credit card debt comes with high interest rates that can be impossible to dig out from without help. Some debt can grow faster that you can pay it off.
- High Monthly Payments: Many people who suffer from high debt also find that the monthly payments are extremely high. This is a vicious cycle in that an inability to pay the high rate causes your interest rate to go up and so on. Consolidation solves this problem in that the bill will be manageable and hopefully a lower interest rate than your other credit cards.
- Multiple Bills. Many people facing large debt find that the sheer volume of bills can get confusing. Consolidation takes away that confusion and allows for one bill.
Debt consolidation can help manage the high interest, high payments and bombardment of bills. Please do your homework, There are a wide range of options when it comes to debt consolidation so find an expert who can help you find the solution that will benefit your specific situation. When debt consolidation fails, the call is then made to the bankruptcy attorney. Unfortunately, the only thing most failed debt consolidators have to show for their efforts is the fees charged and collected by the debt consolidator. My experience with clients who have utilized the services of debt consolidators is that while claims are rarely settled, the clients usually have paid thousands for nothing. In my 33 plus years of representing debtors, I have determined this . . . debt consolidators are a waste of a debtor’s time!