To consolidate debt or not to consolidate

When it comes to eliminating and rising above any debt that has taken over your life, there are several options to consider. One of the best and often the most popular is debt consolidation. In this article, we’ll talk a bit about the top ten reasons to consider debt consolidation over any other form of debt relief method available.

Consolidate Your Debt #1 – Lower Your Interest Rates

One of the best things about debt consolidation is that more often than not, you will have a chance to LOWER your INTEREST rates. And, instead of several different interest rates, you will have one interest rate that is far lower than the many of the others combined!

Typically, when you consolidate your debt, you keep that same interest rate as well; it does not tend to fluctuate as your original debt interest rates may.

Consolidate Your Debt #2 – Lower Your Stress Levels

Just the word DEBT alone can cause a great deal of erratic feelings and afflictions, often in the form of both personal and mental levels. As a result, when debt begins to take control of your life, instead of the other way around, many things can and do happen. To name a few:

Thus, Debt consolidation will enable you to focus more on your life than on your debt.

Consolidate Your Debt #3 – Improve Your Life

When you consolidate your debt, you are taking the necessary steps to improve your life overall. You will find that your health is better, your relationships are better, you feel better, and best of all, your credit starts to improve, and more doors will open for you. When you are making an effort to get yourself out of debt, more people are willing to give you a chance. Therefore, you may be able to finally purchase that home you have been wanting or even find a better place to live, within your means of course.

Consolidate Your Debt #4 – One Payment

Perhaps one of the reasons debt is so stressful and hard to manage is because of the various different payments you must make each month. These payments are often generally different dollar amounts, due on different days, which alone can be enough to throw you for a loop. With debt consolidation, you have the opportunity to combine all of your payments into one affordable, easy-to-manage and easy-to-remember payment.

You’ll find that that one payment really is so much easier to handle each month than many payments. And you’ll see that when you start making these payments on time, every month, life becomes easier and, more importantly, stress-free.

Consolidate Your Debt #5 – Learn From Your Mistakes

Many debt consolidation programs offer a variety of other services, such as debt counseling, budgeting, and financial management. Once you have consolidated, it may be wise to take advantage of these other services; they are typically free. You can then start on the road to a new, debt free, and financially stable lifestyle.

So there it is in a nutshell!

We all make mistakes; so learning from them and knowing how to manage your finances properly is the best way to make sure you never dig that debt hole again.

And since more and more debt is a part of every day life, knowing how to manage it and living within your means can be one very positive aspect of debt consolidation.

Before Bankruptcy, Try These

If you’ve been reading the newspaper or watching the news in recent weeks, you know more and more people are losing their jobs, others are faced with having to take bankruptcy.

Perhaps you’re one of them!

If you currently have unbearable debts and are thinking of wiping them from your life by declaring bankruptcy, just hold off on your decision for a while.

Other options may be available.

Try to improve your situation before you investigate the bankruptcy option. And no matter which way you go, evaluate the 5 steps below to see if you could avoid taking that drastic step.

1. Make a list of all your debts

First, look at all your secured debts, such as mortgage and car loan. How much is the repayment for each month? What are the interest rates?

Then, list all of your fixed expenses, such as electric/gas, phone, insurance, food, etc. What are the total costs for these expenses?

Follow these expenses by examining your credit card debts. Take out all your credit card statements, and write down the amount you owe for each card and the interest rate.

Finally, write down all your other expandable expenses; these are your optional expenses such as entertainment, gym, memberships, dinners at restaurant, and other impulsive purchases.

2. Eliminate the unnecessary expenses

Now you should have a better idea where your money goes. Make a diet plan on your cash; In your Cash Diet Plan, list all your savings from the elimination of the optional expenses. You will be surprised how much money you can save by carefully controlling your expenses. The money you save can be used to pay down your debts.

3. Involve your family by working as a team

Don't do it alone because under such stressful conditions, you may be out of control and may not think and plan with a clear mind; get your family together to let them know about your financial problem, and have them work together to control the household spending and to eliminate unnecessary expenses.

4. Cash out with your assets

If you have equity, you are in a better situation because you could refinance or get a secured loan to pay off your debts. If you are looking for bankruptcy as your debt relief option, you may not have any equity at hand. But equity is not the only asset; many people tend to forget about things that have cash value, but not sentimental value. Think antiques, old clothes or collectibles.

List all the assets you own that you can sell and cash out.

Check your closets, the garage, and storage locker. Find out what you can live without. Then, cash them out through garage sales, eBay or consignment shops. Use the money to pay down your debts as much as possible.

5. Go for consumer counseling

Arrange an appointment with a credit counseling agency and let the counselor draft a budget for you. Review the debt management plan proposed for you before you enroll in the plan.

If possible, contact one or two other credit counseling agencies for comparison. Choose the one that best suits your current financial needs. Although a debt-management plan can have a negative impact on your credit, it's better than bankruptcy.

6. Get A second or part time job

Utilize your out-of-work time on a second, or part-time, job. Although you may not earn much in your part-time job, a little money coming in can keep a bad financial situation from getting worse.

7. Summary

Bankruptcy may seem like your easy way out from debt, but the consequences may follow you for 7 to 10 years. Always look for other alternatives and counsel before choosing this dramatic option.