Should You Consolidate Debts

November 27, 2009 · Filed Under Debt consolidation

Believe me I looked into whether or not I should consolidate my debts. There are two ways to consolidate your debts and they are to borrow enough money so that you can pay off your current debts or you can consolidate your debts using the services of consumer credit counseling.

Certain factors will play into the role of whether you will have the option of “should you consolidate debts.” Here are some pros and cons of trying to make this decision.

Taking Out A Loan To Consolidate Your Debts:

Can you get a loan big enough that is going to allow you to pay off all your debts.
Is the interest rate going to be low enough so that you do not get eaten up by the interest rates.
May hurt your credit score even worse because you are using more credit.
Does not give you a fresh start you are just restructuring your debt; however you are still over extended.
You may still get into trouble because you still have the ability to take out new loans.

Using Consumer Credit To Consolidate Your Debts:

They work with creditors to get your interest rates and payments lowered to where you can afford them.
They will work with you to learn how to manage your money and budget better.
You will not be able to open up any new lines of credit while you are using their services. This is a great benefit as this will prevent you from getting into deeper debt.
Using this method will still have a negative effect on your credit; however it will look a lot better than actually filing bankruptcy.
Some of your unsecured debts may not qualify for this program.

It is up to you to weigh the pros and cons of filing bankrupt. You can easily speak to someone about your situation for free at one of these services and they will hopefully be able to steer you in the right direction.

The choice of course is yours; my main mission of this site is to provide you with some valuable advice on what your options are and to share with you my personal experience and show you that their is life after bankruptcy. Click Here