Benefits of Debt Consolidation
Many people are apprehensive about the concept of debt consolidation because it can appear to be too good to be true.Most wonder why a creditor would accept less money than what is owed, but to them, some money from you is better than none. Each year in the United States, over one million people file for bankruptcy. Excluding chapter 13 bankruptcies, a person struggling with debt that goes bankrupt no longer has to pay those debts.
If a creditor is owed money by a person that may go bankrupt, the choices are partial or lower payments through debt consolidation, or, if they go bankrupt, nothing. (This site is not advocating bankruptcy-it can create problems and should only be considered as a last resort.) Debt consolidation satisfies both the creditor and the person owing money. The creditor will not be receiving a full payment(s), but they are at least getting something.
- The individual in debt can rebuild their credit rating and steer clear of the pitfalls of bankruptcy by making lower payments agreed upon.
- The company that arranges the consolidation usually earns a bit off the new arrangements, but that’s not generally a concern to those consolidating.
Ideally, nobody would ever struggle to pay their bills. But if they do, debt consolidation is really is a great solution for everyone.