Most everyone faces some kind of financial problem during their lifetimes. When debt becomes overwhelming, consumers often try to avoid bankruptcy with alternatives such as debt consolidation. Although this can work for some, it isn’t always the best solution. If you’re considering debt consolidation, here are some questions you should ask yourself before making a final decision.
Can I Consolidate Debt Myself?
While this may seem to be the cheapest method for getting finances in order, it isn’t always the safest or most effective. Even debt consolidation might require a professional’s assistance. However, if you have just a few debts, and you are able to contact each creditor to negotiate a lower balance and terms, you can save yourself in extra fees. In order to consolidate the debts, you will also have to seek out a lender, which can be difficult if your credit rating has already likely taken a hit.
Will Consolidation Result in the Same Situation?
Are you going to end up in the same situation after consolidating your debt? If there’s a possibility that consolidation isn’t going to provide the relief necessary to get your bills under control, you might be better off skipping consolidation and focusing on filing bankruptcy instead. Attempting alternatives that won’t work can end up causing your situation to become worse.
Can I Make the Payments?
Debt consolidation involves taking all of your balances and putting them together into one loan or debt. You then make payments on that one debt rather than on each one individually, which often costs more in interest payments and fees. However, even though the payment might be smaller, there is still a payment that you will need to make once your bills are consolidated.
One of the reasons bankruptcy alternatives don’t work is because if you aren’t able to make your payments before the consolidation, you likely won’t be able to afterward. If you aren’t positive you can make the payments required after consolidating your debt, there’s no reason to spend the time and money trying. Be realistic and honest with yourself. In some cases, debtors just don’t have the funds to pay their bills and consolidating does little to help.
Is the Debt Consolidation Service Reliable?
We can help you figure out if debt consolidation is a viable solution for your situation. However, through the years, debt consolidations services have gained a reputation for charging exorbitant fees for services that don’t accomplish anything. Before choosing a debt consolidation service, make sure you research whether they are reliable and able to help you. You aren’t in a situation where you can risk paying money for shady services that don’t work and won’t help you gain control of your finances.
If you’re not sure whether debt consolidation or bankruptcy is the best choice, contact us online, and we’ll help.
Have you consolidated your debt? Share your experience in the comments below. Also, don’t forget to share with others who may have debt consolidation questions or concerns.