No one wants to be in debt, but it happens, and when it does, the solution is bill consolidation. It can help you get back in charge of your money and stop letting your debt ruin your life. Unexpected medical bills, education costs, credit cards, personal loans, and owning a home can all lead to debt. If you haven't been able to handle your debt on your own, you should first look at your situation and the total amount of debt to figure out how to pay it off in the best way. Debt consolidation is probably a better option than bankruptcy, and you should think about it. However, you might be able to handle your debt on your own, which is why it is important to look at your finances.
When you think about your options and the best way to pay off your debt, it's important to understand how bill consolidation works. Simply put, debt and bill consolidation is the process of adding up all of your outstanding debt, and figuring out how much you can pay each month toward this debt is part of figuring out your situation. Look at your income, how much you owe each month, how much you pay each month, and how much debt you want to include in the bill consolidation.
Next, you should figure out how much of your debt and total debt from consolidation each creditor owes. This is important if you want to find the best offer from your creditors to lower your payments. During negotiations with creditors, you might be able to get lower interest rates, smaller payments, or even a lower payoff amount. For example, if you have $5,000 in debt and bills to pay off, and you have to pay $400 per month to one creditor, divide $400 by $5,000, and then multiply the result by 100. This gives you a percentage, which in this case is 12.5 percent. Then you know that this creditor is owed 12.5% of the total amount you owe after consolidating your bills. If you have $1,000 left over each month after paying for things you need, you can pay this creditor $125 each month. One thousand times a percentage of 12.5%. When compared to paying each creditor yourself, the average amount paid each month through debt consolidation may or may not be less than, say, $125. If it isn't, debt consolidation might not be the best way to pay off this creditor, but it might be for others. Or, the consolidator may be able to work out a much lower payment with the creditor. In this case, reducing your debt through debt consolidation is probably the best thing you can do.
It won't hurt to talk to your creditors and try to work out a lower interest rate and smaller payments. Most of the time, they will work with you if you tell them what's going on. It goes without saying that bankruptcy should be the last option, but you might not want to jump right into debt consolidation.
