Debt Solutions
Depending on the extent of one's debt, there are a variety of solutions. At the least intrusive end of the spectrum, a quick lesson in how to manage one's finances could suffice in righting the ship. At the darker end of the spectrum, and individual may find themselves forced into bankruptcy protection, which offers protection against creditors in conjunction with a variety of extremely restrictive consequences.
What is Debt Management
Somewhere in the middle …show more content…
1. Reduction in Number of Payments - In most cases, people with serious debt issues are paying multiple bills to credit card and finance companies. A debt consolidation loan allows the debtor to roll most, if not all, of their payments into one loan payment to one lender.
2. Lower Interest Costs In most cases, debt consolidation loans come at lower interest rates than the rates being charged on credit cards. There is usually a direct correlation between higher interest rates and the debt problems of the borrower. On a larger debt balance, the amount of savings can be quite substantial.
3. Lower Aggregate Payment Amount - By lowering the aggregate interest rate and number of payments, the borrower is usually left with a significantly lower monthly payment. The cash flow savings can be used to start a personal savings or make larger principle payments and get out of debt faster.
The time to implement a debt management program is before one's debt issues begin causing stress and damage to their credit score. If handled properly, debt management could lead to the borrower finding peace of mind, while establishing a more stable financial