What is Debt Consolidation?

Debt consolidation is when an individual makes a conscious decision to re-organize their own debt using another form of financing. Hopefully, when the person makes this decision to consolidate their debt, they are doing so in hopes of getting a lower interest-rate and have the mindset of reducing overall debt.

Yet, just consolidating your debts is not enough. An individual must make a conscious choice to eliminate those debts once consolidated; otherwise, they run the risk of falling back into the same situation they were in before.

The debt consolidation industry has grown dramatically as Americans are carrying higher amounts of debt than ever before in this nation’s history. Although many people fear bankruptcy and will not even consider it as an option to their debt problems, bankruptcy may be in their best interest.

When considering debt consolidation, the best way to approach it is to look at all your options and choose the best one. However, for some reason, many individuals would rather turn to the debt consolidation industry for help despite its track record of high costs, unreachable goals, and failure rate.

There are psychological reasons and financial reasons why a debt consolidation industry is not the correct answer for 95% of Americans with debt problems. There have been many articles written on those topics.

But, for some people, it is easier to go with the debt consolidation group for emotional reasons than it is to even consider the bankruptcy option. This is unfortunate, and pride leads many people down the wrong path, leaving people caught in a debt cycle which they may never recover from. Even worse, debt consolidation keeps them in the debt cycle for much longer than they need to be which could take years to recover from.

Debt consolidation is an option for some people, and it should definitely be considered by everyone before making the decision to file for bankruptcy protection. But, when looked at with an objective eye, it usually can be quickly discarded as an option when you look at the cost and the failure rate for most debt consolidation plans. However, if you ask someone in the debt consolidation industry how effective their plans are to help the American public, they will tell you otherwise, probably because they are working on commission. If you want to know if bankruptcy is the right option for your financial situation, call The Dellutri Law Group, PA at (800) 391-4337 or fill out our online contact form today to schedule an initial consultation. We have offices in Fort Myers, Naples, Orlando, Port Charlotte, and Tampa, FL!