Avoid Bankruptcy: Debt Solutions That Actually Work

July 24, 2010 - PRLog -- Here is the bottom line: consolidate your debt and avoid bankruptcy. Bankruptcy is designed to be both disruptive and prohibitive. Securing a new line of credit can be agonizing and ultimately frustrating. Consolidation often entails taking out one loan to address you various debts. This new loan typically enjoys a lower, fixed interest rate and often proves more manageable for families and individuals alike.

Most consolidation service will grant unsecured loans, while some services require the loan be secured against some form of collateral, more often than not, a home or vehicle. The collateralization of the loan provides for a lower interest rate as the debt is secured against a profitable asset. Failing to pay off a collateralized loan often entitles the holder of the loan to take possession of said home or vehicle. In essence, since the risk of losing money is lower, so too, then, is the amount of interest on the loan.

In some cases both the principal and interest rate can be significantly reduced. If a debtor is on the brink of bankruptcy, the loaner will often buy the loan at a considerable discount. It would behoove the smart debtor to shop around for the best offers. Though never mentioned, a consolidation agreement can seriously affect a debtors chances of having his or her debts dismissed by a bankruptcy judge. For this reason alone, it would behoove the potential debtor to think twice before jumping on the consolidation bandwagon.

Debt consolidation is generally accepted as the most viable solution for debtors who are over their heads with credit card debt. Credit cars notoriously carry high interest rates. To combat this, debtors with viable forms of collateral can borrow against this collateral, securing a second loan to pay off their credit cards. This second loan, secured against say a house, can e paid off sooner as it enjoys a significantly lower interest rate.

Buyer beware. Some unscrupulous consolidation companies charge exorbitant processing fees. Often these fees are close to the maximum allowed by state legislatures. Often, they are not directly disclosed. Some companies realize all too well that a client does not have the time he or she needs to shop his or her debt around. In these cases, the consolidation company can charge any ridiculous fee it wants, knowing that the client in backed into a corner. A sword of Damocles can be worth millions. It should be noted this form of last minute lending is also known as predatory lending.

Free Debt Advice
(http://www.DebtDecreaser.com)

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Bankruptcy is not the only option if you are struggling financially. Debt settlement is the best alternative to filing bankruptcy. Most consumers are able to eliminate 50% of their unsecured debt while avoiding some of the negative consequences of bankruptcy. If you are on the verge of filing bankruptcy it would be wise to at least look into a debt settlement program.

Check out the following link to speak with a debt relief specialist for a free debt relief consultation. It’s completely free and could save you from filing bankruptcy.
Free Debt Advice
(http://www.DebtDecreaser.com)
Or Call - 8008940286