| Debt Consolidation vs. Bankruptcy |
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| Written by Jackie Lee |
| Friday, 08 May 2009 10:30 |
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Debt consolidation may seem like the answer to your prayers, and it may be. It is generally a better solution to bankruptcy if you have some money to put toward your debts. However, there can be substantial fees that may end up devouring the remainder of any money you do have. It's best to get all the facts before you set yourself up with a debt consolidation program.
Debt consolidation may seem like the answer to your prayers, and it may be. It is generally a better solution to bankruptcy if you have some money to put toward your debts. However, there can be substantial fees that may end up devouring the remainder of any money you do have. It's best to get all the facts before you set yourself up with a debt consolidation program. Debt consolidation seems like a good plan. Put all your debts together and pay one monthly fee. The problem arises when the debt consolidation company increases your interest rates to cover their costs. They may also add a monthly fee to your payment. You need to make sure you crunch the numbers and make sure you don't end up paying more. You can also call your creditors, ask for some time to pay off your debt, ask for lower interest payments. Many companies will be willing to do this, if you only ask. If your bills are lowered, it will grant you time to land some extra cash to payoff the debt owed. Some creditors may charge the amount, but lower your monthly installments according to your wages. This will allow you room to repay the debts at lower rates. Be aware that paying lower balances on debts may lead to costly IRS obligations and taxes, since if you are a "write off" or else reduction candidate, the information is posted with the IRS. It can all be so confusing, so it's best to be armed with information. If you have called your creditor and they have provided you with assistance, whether it's a lower interest rate or a grace period on payments, you might want to run your numbers through a debt consolidation calculator. This is a free tool you can find online. This will show you what your monthly payment is likely to be with consolidation. It should help you make a decision if consolidation is your best bet. It can be completely overwhelming when you are in debt and see no way out. However, when you are trying to get things on track it gives you hope there is a way out. So many people just ignore the problem and let it go. The longer you ignore it the worse it will be, and the less options you will have available to you. Take the bull by the horns, open your bills and get clear on what is really going on, and what you can really afford, and then find a way to make it happen. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. There are many debt consolidation pros and cons. A good way to know if debt consolidation is the best option for you is to run your numbers in a debt consolidation calculator. Get a totally unique version of this article from our article submission service |
| Last Updated on Monday, 11 May 2009 15:52 |