Using Debt Consolidation to Make Your Finances More Manageable

Debt consolidation can be a vital step for a person that is wanting to take back control of their financial lives. While this can be an option that allows you to greatly improve your quality of life, it can be difficult to assess it as an option when a person lacks some key information.

Is Debt Consolidation the Same Thing as Bankruptcy?

A person may easily be under the impression that using debt consolidation will be the same as filing for bankruptcy. However, this is not the same process at all. While a bankruptcy filing will involve seeking legal protection, debt consolidation will often involve using a new loan to settle previous debts. Not surprisingly, debt consolidation will often be an option that may allow individuals to avoid the need to seek formal bankruptcy protection.

Why Can it Be Advantageous to Hire an Attorney For Debt Consolidation Negotiations?

Individuals may assume that they will not need to hire an attorney due to the fact that this will involve applying for a new loan. However, part of this process may also involve negotiating with the creditors so that the outstanding debts can be lowered as much as possible or even restructured so that they will have much easier or more favorable payment terms. For this process, hiring a professional debt consolidation legal service can be an excellent option for ensuring that your rights as a debtor are protected and leveraged to your benefit.

When Should You Apply For the Debt Consolidation Loan?

As part of the debt consolidation process, you will want to apply for a debt consolidation loan so that you can pay off these outstanding balancing and enjoy lower interest rates. Unfortunately, individuals may not know how much of a loan that they will be able to get for consolidating their debts. This can be important information to have for both your personal financial planning as well as for the negotiations with the creditors. For this reason, individuals should apply for their debt consolidation loan at the start of this process. By at least having your preliminary approval for the loan, you will be able to have this information without formally committing yourself to a loan amount.

Pursuing debt consolidation can be one of the most important steps that you take in order to make your debts more manageable. Knowing that debt consolidation is not the same as filing for bankruptcy, the benefits of having an attorney represent you during this process and starting the process with applying for a debt consolidation loan approval can help to make your experience with this process as smooth and productive as possible.