Many consumers don't completely understand what debt consolidation is. They often are under the impression that it is simply a loan that they receive to pay off their debts. A debt consolidation program is, however, much more than just a loan. It is instead a complete program of paying down debt. debt consolidation loans
If you, like many consumers these days, are experiencing financial hardship to the point of considering bankruptcy, take a step back and make sure you understand all the options available to you. You might not realize that filing bankruptcy comes with some fairly significant and long-term consequences, and a better choice might be to embark in a debt consolidation program. debt consolidation loans
In taking the time to properly research both bankruptcy and a debt consolidation program you likely will learn many of the positive aspects of debt consolidation. One significant difference between the two is seen on your credit report. debt consolidation loans
If you choose to file bankruptcy, it will be noted on your credit report, and you can expect the negative consequences associated with bankruptcy to follow you for the next ten years. A bankruptcy on your credit report will mean that for ten years you will have extreme difficulty obtaining any financing, including a home mortgage, a new car loan, or any unsecured debt, like a credit card. debt consolidation loans
Bankruptcy can also impact other areas of your life. More and more employers are including a credit check as part of their hiring process, and you might find yourself losing out on a new job because of your credit history. debt consolidation loans
Insurers are also getting in on the credit reporting bandwagon, and many insurers are not only increasing auto insurance rates of clients with less than stellar credit, in some cases, they actually refuse to write homeowners' policies for clients with a bankruptcy on their report. debt consolidation loans
In contrast, a debt consolidation does not have these negative impacts on your credit report. Once the late payments, or other evidence of your financial struggles, fall off your report, your credit risk will look much more sound. debt consolidation loans
Once you are sure that a debt consolidation program is the right option for you, it's time to choose a company to work with. Here's an overview of what you can expect. debt consolidation loans
The first step that a quality debt consolidation company will take is to review your overall financial situation. They'll look not only at your current income sources and level, but also at all of your outstanding debts. They'll also want to obtain an understanding of why you found yourself in need of their credit counseling services (such as medical bills, or an unforeseen layoff). debt consolidation loans
Once that process is completed, they will then set about contacting each of your creditors, explaining to them your situation, and working up a program that is acceptable to both you and the lender. debt consolidation loans
When you find yourself in a serious financial crisis, it's important to get help quickly. Even so, take the time to make sure you're making the right choice. You may have to live with your decision for a long time, so before you choose bankruptcy, consider thoroughly a debt consolidation program.
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