In the current time, bankruptcy and debt consolidation are well known debt management strategies. Which one is correct for you? Proponents of debt consolidation mostly promote the stratetas an easy way to protect your credit rating and save money. While consolidating your debts, you actually reorganize many debt payments into a single payment. It is a kind of debt refinancing that entails taking out loans to pay others. Ir is also commonly referred to as personal finance process of people addressing consumer debt. BUt mostly refers to a country’s fiscal approach to government dept or corporate dept. It can secure an overall lower interest rate to the complete debt load and also provide the convinience of servicing around only one loan. Debt means money owed by one party. It is basically repayments of interest and principal. Debt consolidation is something that is beneficial as compared to bankruptcy.
Clearly, there are many advantages of debt consolidation and it is certainly better than bankruptcy. Let us look at the points as in why it is better. They are as follows:
PROTECTS YOUR REPUTATION AND CREDIT RATING:
As compared to bankruptcy, debt consolidation is certainly not a matter of public record. Anybody who looks in detail will come to know about your bankruptcy. Bankruptcy records can be viewed via an electronic subscription called PACER. Though a debt consolidation loan may show up on the credit report, it won’t lower the credit score as compared to a bankruptcy filing.
MAINTAIN YOUR ACCESS TO CREDIT:
Unless not allowed by the debt consolidation agreement, you can keep the credit cards. This can be helpful during an emergency. If you owe a big amount of money or are in default, you won’t be allowed to use your credit cards andalso won’t be approved for additional credit.
SIMPLIFY YOUR DEBT MANAGEMENT:
When consolidation of your debt is done, youdon’t have to keep up with many payments with different interesr rates to different creditors. Rather, you can make one easy payment.
LOWER INTEREST RATE AND MONTHLY PAYMENT:
By consolidating your debts, you’ll be able to get a more manageable monthly pay and that includes a lower interest rate. And yes, you will have a lot of cash available per month to meet all your needs.