How Debt Consolidation Helps You Avoid Bankruptcy

When paying bills becomes an on-going struggle, bankruptcy can seem like your only choice; in fact, it may seem as though you have no choice at all.

This misconception is one of the most compelling reasons to consult a bankruptcy trustee, who can shed light on all of your options and thereby enable you to make an informed and strategic decision.

Debt consolidation is one such example of the options not everyone in financial difficulty is familiar with. Some of us may even consider this proposed solution as no more than yet another loan. Done correctly, however, debt consolidation is one of the most viable alternatives to bankruptcy.

This solution consists in taking out a low-interest or fixed-interest loan to pay off numerous other loans. The benefits are many; for one, it affords many the convenience of paying off a single loan rather than a variety of loans to different creditors. What’s more, it allows you to benefit from a much lower interest rate than, say, those of credit card debt. This lower interest rate entails less money spent on paying off interest -and so less debt to be repaid overall.

In a word, debt consolidation can save you large sums of money in interest. By transferring your current loans to another loan more adapted to your payment options, debt consolidation allows you to benefit from a lower, and usually fixed, interest rate. This means paying off your debt faster; a larger portion of your debt payment goes to paying off your debt, rather than being eaten up in interest rates. Debt consolidation is highly recommended in most cases of consumer debt, where credit card interest rates can significantly impair your ability to pay off your debt.

While debt consolidation may seem like a drastic measure, it is often a strategic decision which can save you both time, and money -and exempt you from filing for bankruptcy.

It is crucial to be correctly advised when applying for such a low-interest loan. A bankruptcy trustee will help you devise a realistic and usually more comfortable payment plan than expected, and this is where most debt consolidations can go wrong. If the initial assessment of your payment options and lifestyle expenditures is too optimistic or even too modest, you may find yourself struggling to adapt to even a single, lower interest loan.

The process of trial and error which can come from attempting to solve your financial problems on your own is often ultimately more expensive and more time-consuming than seeking out the professional guidance of a bankruptcy trustee, whose expertise ranges far beyond that of filing for bankruptcy.

Debt consolidation is a highly recommended alternative to consider for those with financial difficulty. It can be a surprisingly effective solution when based on an accurate assessment of your financial situation -saving you time, money, effort, and most importantly, the anxiety which inevitably accompanies the uncertainty of financial trials.

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