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Beware of Bad Debt Consolidation

One of the number one complaints of people trying to dig their way out of debt or restore their credit is that there are simply too many bills, receipts, and statements at the end of the month. People hardly verge on bankruptcy because of just one credit card that got out of hand; instead, numerous cards, several lines of credit, and various loans and expenditures add up. The result is one person trying to keep track of too many collections.

Debt consolidation promises to fix the overbearing weight of dozens of bills by lumping all your debts together into one. Sounds pretty great on the surface, especially when the institution consolidating your debt also claims that they can lower your payments in the process. Who wouldn't want to consolidate their debts at that point?

You. You probably won't want to, depending on your situation and the consolidation you are being offered. Many consolidation loans will only lower your monthly interest rates because they extend the lifespan of the loan itself further. You must do the math to see if this lower monthly amount will really save you in the long haul, or else you could pay thousands more on your debt just for the convenience of paying one bill at the end of the month.

Is Debt Consolidation Ever Smart?

Absolutely, but only with the proper planning, behavioral changes, and accurate math completed. High interest rates and high monthly payments might be putting your back to the wall, and a consolidated loan could feasibly help you keep your head above water, even if it means you pay more when the debt is finally discharged. But nothing you do is going to really make a difference if you do not create a plan that prevents you falling right back into debt, as so many people do each year.

If you want help determining if debt consolidation is right for you, or if bankruptcy would be the better option, you can contact Glenn F. Russell, Jr. & Associates, P.C. Our Massachusetts bankruptcy attorney can be your legal advocate during this trying time. Call 888.400.9318 today.