How Debt Consolidation can help Prevent Wage Garnishment
If you don’t have enough money to pay all of your bill each month, then you know that it can be challenge to figure out what to pay and what to accounts to go delinquent on. For large debts, however, it’s very possible that the collection agency controlling the debt will decide to pursue a wage garnishment. This means that they will be able to have money withdrawn directly from your paycheck and sent to them.
Obviously, this can have catastrophic financial consequences. If you’re like most people who have outstanding debts, you don’t have a lot of spare money left over after paying bills each pay period. Small increases to your taxes or other deductions can have a huge impact on how you live. Imagine what 15% of your paycheck suddenly disappearing would mean. For many people it becomes impossible to make a mortgage payment, car payment, or even come up with enough gas money to get to and from work.
If you are facing the possibility of your wages being garnished in the near future, then you can take steps to make sure that this doesn’t happen. One of the best solutions for many people is to apply for debt consolidation. These loans pay off your all of your existing debts, including those that are delinquent. Instead of juggling dozens of credit cards, personal loans, and other debts, you are left with one loan with a monthly payment that fits into your budget.
Because debt consolidation loans require their borrowers to go through debt counseling, you’ll walk away from the application process with more than just a new loan. You’ll also get a financial plan that will help you to get your budget under control. The payment for the debt consolidation loan will be worked into the budget, so you’ll know that you can handle the payments before you agree to take out the debt.
Most importantly, all of your existing debts will be paid off. That means that you will no longer be bothered by creditors, collection agencies, and banks calling to demand payment. On your credit report, these accounts show up as being paid in full, possibly raising your credit score.