A Life Line in Debt Consolidation and Management
Money is the most mismanaged resource that human beings have within their reach. There is a power and a high from spending money that cannot be compared with any other high known yet. The world today highly materialistic, it somehow motivates people to live beyond their means. It is always tempting to go a little extra and push the limits of a fixed income until it spirals out of control.
What Happens When You Are Down and Completely In the Red?
You are faced with two options - (1) file for bankruptcy or (2) check out the debt consolidation and management solutions. Let us look at both these options. When you think of filing for bankruptcy you need to keep in mind that this would be on your credit record for a minimum of seven years no matter what you do. That means that you would not be able to get a decent loan from any bank or financial institution as you would be considered a high risk proposition. It also means that if you do get a loan, you would pay in incredibly high rate of interest - which would further put strain on your finances.
The second option is to check out the debt consolidation and management solutions and see whether that could save you from filing for bankruptcy.
What Is Debt Consolidation and Management In the First Place?
There are two components in the debt consolidation and management solution. The first one - debt consolidation - is in fact a loan which consolidates all outstanding debts you have into one large debt to the debt consolidating agency. This agency would then enter into negotiations with your lenders and improve the terms and conditions wherever possible. Besides, they will also try to waive the late fees, and other such things thereby saving you a large amount of money overall.
The second part of the term debt consolidation and management pays attention on how the finances would be managed after the debt consolidation. Both these aspects are important and interdependent as one cannot exist without the other. Management is a critical factor if you plan to stay debt free after the debt consolidation is put into action. Without proper management of finances and debt, you would tend to slip back into debt and related problems.
This is why debt consolidation and management is very often a life line for those people who have experienced the paralysis of extreme indebtedness and the helplessness of being forced to file for bankruptcy.
