Your debt has spiraled out of control in the face of the pandemic, and you’re seriously considering declaring bankruptcy. This decision is hard and is something you’ve taken very seriously. However, it is important to understand that you have other options. For example, consider a debt consolidation loan before you damage your credit with bankruptcy.
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Bankruptcy Vs. Debt Consolidation
Bankruptcy has advantages that may make it an attractive option for many people. After all, if you declare bankruptcy, your debt is basically temporarily waived and you don’t have to pay it anymore. While this period typically lasts seven years, you can continually declare bankruptcy on it if you’re still in a financial situation that makes it unpayable. But there are obvious downsides.
First, your debt doesn’t ever truly go away when you declare bankruptcy. It is typically right there at all times and is something that can haunt you for many years. Furthermore, your credit score will be destroyed if you choose this option. Yes, you can build your score back over several years. But getting a loan or even a credit card with a bankruptcy on your record will be nearly impossible.
In this situation, a debt consolidation loan may be the wisest decision you can make. If you didn’t qualify for federal relief during the pandemic, a debt consolidation loan can help you by taking control of your debt and minimizing your payments. How does this process work? Let’s go through the step-by-step method that companies like Priority Plus Financial use to help people in your situation:
- Examine your debt history to figure out what kind of loan works for you
- Create a loan that pays off your debt and transfers it to their ownership
- Produce a repayment package that works for you, including monthly payments
- Set interest rates that are fair for you and which don’t negatively affect you
- Work with you to get through your repayment cycle on schedule
Many people are using this method to handle the historic debt levels that are affecting the world. This type of personal and governmental debt is almost always a warning signal for a serious global economic downturn. We’re likely in the early stages of this problem right now, so it’s important to get your fiscal record clean and your debt managed ASAP.
Paying off your debts, rather than foregoing them for a few years, is a smarter choice in these challenging times. Doing so may help you stay strong while the world recovers and ensure that you’re in a great position to handle your debt should it become too big to manage otherwise.
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You Deserve a Second Chance
As you can see, debt consolidation loans are a viable alternative to bankruptcy and make work well for people in a variety of financial situations. Talk with a financial provider or adviser to learn more about the different options available to you. These professionals will work with you to help you understand this process.