Can debt consolidation help me to avoid bankruptcy?
If you’re struggling with your debt, then odds are you’ve looked at many different options in the process of figuring out what to do. As you try to determine what you need to do to get your finances in order, odds are you’ve thought about bankruptcy. While this process can erase your debts, it comes at the cost of ruining your credit and the public being alerted to your private business. Debt consolidation, on the other hand is completely confidential and can still help you to pay off your debt. The question for many people, however, is whether or not debt consolidation can help them to avoid bankruptcy.
In many cases, debt consolidation works to help people with their debt problems, allowing them to avoid bankruptcy. Because the process begins by having a person take out a loan that pays off their current credit cards and other debts, it will stop the current problems that you’re having with your debt. Debt consolidation immediately pays off your other debts, stopping any harassing phone calls from your creditors.
In addition, everyone going through debt consolidation has to go through debt counseling. In this process, you’ll meet with a financial professional who will review your budget, debt levels, income, and work with you to create a plan to fix your finances. That means you can start fixing your finances as soon as you are approved for a debt consolidation loan.
Once you and your debt counselor find a debt consolidation loan that will fit into your budget, you can start working on fixing the other parts of your finances. With the extra money you’ll free up each month from lower loan payments, you can build up your savings or make extra payments on your mortgage.
People file for bankruptcy when there’s just no way that they can pay off their debts in a reasonable period of time. If you’re feeling overwhelmed by your debt, it’s worth it to apply for debt consolidation and have a debt counselor take a look at your situation. Since this is one of the mandatory steps for people going through bankruptcy and the consultation is free, you literally have nothing to lose by exploring your options.