Debt Consolidation or Bankruptcy

Over the past decade, Americans have accumulated excess debt. It was partly driven by low interest rates and increased equity in homes because the high real estate market pushed prices up. Excessive spending and no financial responsibility often leads to bankruptcy of consumers. Now with new bankruptcy laws in place filing bankruptcy filings has become much more difficult and much more expensive.

More and more people now have to look for different alternatives. Debt consolidation programs can help consumers to get rid of excessive debt burdens and can reduce consumer monthly fees by up to hundreds of dollars every month. Debt consolidation experts can help consumers assess each other’s situations and make recommendations for how to approach the situation.

With the help of professional debt consolidation, consumers can draw up a customized debt consolidation plan. Depending on the severity of the situation, professional debt consolidation will contact the consumer credit card company to negotiate a way out of the situation.

Debt consolidation is easy to start. All that is needed is a simple telephone call or online question. A consumer must research which company has a good reputation because there are several debt consolidation businesses out there that collect a lot of money and don’t provide valuable services. They really made things worse. A consumer also needs to be honest about the situation and willing to work with creditors. Hiding something will not help consumers get back on track.

Although filing for bankruptcy may sound like an easier way out, this is not necessarily true. Damage to credit scores and credit reports is worse than finding a way out of a large pile of debt. In the long run it also doesn’t help. Changes in the way people think about these things must be done. Filing for bankruptcy is another person who simply pays your debt. Credit card companies and banks will move these losses into bills and everyone has to pay more to cover bankruptcy losses. Consumers also don’t learn how to work on a budget and often filing bankruptcy is done twice or more by the same person. By biting bullets and paying off debts, a learning process has been established which will help to gain more financial freedom in the long run.