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There Are A Number Of Advantages Of Using Debt-Consolidation Companies
A lot of individuals who find themselves in debt use one of the professional debt consolidation companies to rid themselves of the worry of sorting the problems out themselves.
While some simply give up and file for bankruptcy, others still feel there is a stigma attached to filing a bankruptcy and it is they who will be likely to consider the debt consolidation companies.
Today's unpredictable economy has caused a lot of individuals to have debts that they never expected to have. They were going along nicely with two incomes, when out of the blue the bottom fell out and either one or both incomes were lost due to outsourcing or downsizing; in some instances to actual company failure because of no new business, or not ample money with which to obtain supplies, consequently salaries can truly not be met.
Thanks to the many specialized debt consolidation companies, people can now see a way out of the despair.
As a result of this economy, both individuals and companies have been forced into a new way of life. The options are usually Bankruptcy or debt consolidation. Let's consider this from the perspective of the individual instead of a company.
In the event that the individual takes the Bankruptcy route, there are two options; a Chapter 7 filing which will clear out all of the unsecured debt. Secured debts would, needless to say, have to be reaffirmed; a Chapter 13 is a debt consolidation.
Some individuals feel that they do not want to wipe out the debts since they may want to do business with these lenders when things get back to normal. In that case, they could file a Chapter 13 which makes it possible for them to pay the creditor a percentage, calculated according to the amount of the debt, over a period of three to five years.
Throughout this time the individual is under the protection of the Federal Bankruptcy Court and cannot be harassed by the debtor.
The debt consolidation company offers the same service as the Chapter 13 bankruptcy does. The difference in between the two is that with a Chapter 13 you are in the protection of the Federal Court System. Utilizing a private debt consolidation company you are certainly not protected, and you creditors can continue to harass you even if they are receiving payment each month. Unfortunately, because the payment is, in both cases, calculated on the balance due to the creditor, the payment may be smaller than the creditor would like it to be. This is where the harassment typically comes into effect.
In the event that there is a foreclosure along with the outstanding debts there is not much that might be done unless the individual gets there quickly. In a Chapter 13, the house payments may be lowered and a reaffirmation is scheduled. In a private debt consolidation there is little chance of saving your home from foreclosure unless it is still very early and then the house payments can become part of the consolidation but lowered..
In the event that you are an individual that is facing the debt predicament that is striking many these days, then calculate your current earnings (worker's compensation, social security, retirement fund, savings, investments, etc.) and think about which of the choices will best suit your present state of finances. You may want to talk to an attorney that will steer you in the direction of bankruptcy or debt consolidation. There are attorneys that will help you pro bono (free) in the event that you will call your local Bar Association.
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Before you decide to take out one of the various debt consolidation loans first see if your finances are sufficient to make the payment.
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