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When Is It Right to Consolidate Debt?

By on Apr 18, 2013 in Debt | 8 comments

People like to avoid bankruptcy as much as they can. They are wary of the stigma that is attached to this debt relief option because it is a matter of public record. Before people consider filing for bankruptcy, they have one last tactic they can try. They may be able to qualify to consolidate their debts with the help of a debt management company.

Are There Several Monthly Debts?

Debt consolidation is not right for everyone, but it will help people in several different situations. Some people have several unmanageable debts. For instance, they may have several credit card accounts with high interest rates. This requires that they make several monthly payments that are too high for them to comfortably afford.

If the consumers in the above situation decide to consolidate debt, they will reduce their several payments to just one. This payment will be lower because the debt management company will have the interest rates lowered. This means that consumers pay less in interest to each of their creditors. If they can afford to do so, they can apply the amount of money that they save on this plan toward the balances and eliminate their debts even faster.

Will It Take 10 or 20 Years to Eliminate Debts?

Some consumers are considering bankruptcy because they realize that they will be repaying their debts for longer than five years. Typically, people in this situation have balances on one or more debts that are between $3,000 and $100,000 that also have high interest rates. These consumers can consolidate debt and finish repaying their obligations in a shorter period of time if they engage in a debt management program.

Is a Home Equity Loan Impossible?

One way to consolidate debt without a debt management company is to obtain a second mortgage. However, those who do not own a house or do not wish to risk it by offering it as collateral in another loan would benefit from a debt management plan. Obtaining another loan does not help people learn how to manage their finances, and they often become mired in debt again after they have received a home equity loan. Those who seek the services of a debt management company do not have to worry that they may default on their payments and possibly lose their homes to foreclosure.

How to Find a Good Debt Management Company  

Debt management companies are in abundance because so many people are currently in debt and in need of a solution. Because of this, there are a few disreputable entities in existence that would rather take advantage of people than help them. Because there are so many people in this situation, Americans have several opportunities to ask others if they ever used a debt management company to consolidate debt and whether or not they received the help they needed.

Companies such as Consolidated Credit can help put together a free plan on how you can consolidate debt. Additionally, consumers can ask their friends, family members or even co-workers to find the best debt management companies. By asking people they know and trust about this subject, consumers have a good chance of finding the debt management company that will do the best job for them.

About the Author:

This article is composed by Elaine McPartland who is associated with “Consolidated Credit” as their community writer. You can add her at her google+ profile.


  1. Good post! I consolidated my credit cards when I was in debt and was fortunate to find a very good company to help me. They got my rates lowered to 0% on three of my four cards and was an immense help to paying off the debt.

    John S @ Frugal Rules

    April 18, 2013

    • Wow John! That is great that you were able to get you interest rates so low. We consolidated our debts as well when we were getting out of debt. We got a personal loan and didn’t use a company, but glad to hear from someone that I know that it worked out well. Thanks!


      April 18, 2013

  2. I was looking for a debt consolidation company when I was in a lot of debt, but luckily, I was offered a 0% balance transfer and interest rate for 18 months. I took advantage of it and that helped me get started on my debt reduction plan.

    Debt Roundup

    April 18, 2013

    • That is great! Thanks for sharing Grayson!


      April 18, 2013

  3. The only debt I have left is mortgage. I don’t know if I plan to pay it off or sell my property. Actually my wife and I both own property prior to getting married. It’s a decision I am looking at down the line.

    Jai Catalano

    April 18, 2013

    • Are you considering consolidating the debt on the properties? I have never thought of that before but I guess that could make sense depending on the situation.


      April 18, 2013

  4. Will consolidating credit card affect an individuals credit score?


    May 1, 2013

    • Hi Tyler, it depends on what kind of “debt consolidation” you do. Finding a way to improve your credit while consolidating your debt would be ideal. What we did was get a personal loan for a lower interest rate to combine all of our credit card debt. This improved our credit score because we were essentially paying off the old credit card debt in full with this new loan.


      May 1, 2013

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