Will Debt Consolidation Always Work For Me?
Debt consolidation can be an effective solution for individuals and businesses that are struggling with high interest rates and repayments. But it is not always the most appropriate solution.
What are some of the other options available to me to assist me get in control of my debts?
# Bankruptcy: This is the solution available in extreme cases. In such cases, you declare yourself bankrupt and get your debts cancelled. Under bankruptcy you can lose most of your assets and will also have to live with certain restrictions.
# Debt agreement: If it is possible for you to meet your debt obligations by restructuring your debts such as with lower repayments, moratorium or an extended payment period, then you can propose a debt agreement to your creditors. A debt agreement is a legally approved arrangement with your creditors. This can affect your credit rating however.
This articles, from BCHL outlines additional pros and cons of debt consolidation.
When is debt consolidation not appropriate?
# Your problem is very serious
If you have accumulated huge debts and cannot possibly repay them within your existing financial means then debt consolidation may not be an option for you.
In such circumstances, bankruptcy or a debt agreement may be a solution.
# Your income is low or irregular
If your income is low or not regular enough, it may not help you to meet your debt obligations in a timely manner, even with relaxed repayment terms and conditions.
Slashing down you expenses to only the essential items may help bridge the gap between your income and repayments.
Debt consolidation is ideal as a solution to minor debt problems, with minimal negative implications. However, depending on the gravity of your situation, it may not be always be a workable proposition.
If you'd like to find out more about how you can escape the debt trap, contact BadCreditDebtConsolidation.com.au on 1300 724 307 today for a free consultation.
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