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Debt consolidation may be a way to avoid filing for bankruptcy for some consumers
01/19/2010
Bankruptcy could be considered one of the most devastating things that could befall a consumer's personal finances, though there are ways to try and avoid it.
According to a recent report from Bankrate.com, one of the options consumers may consider is debt consolidation, which can help reduce the number of credit cards a person has.
"This does not mean you have to shut down lines of credit," the article noted.
In this sense, debt consolidation can take on a number of forms. For example, consumers may transfer a number of credit card debts onto a card with a lower interest rate. Or, they may focus on paying down a few cards in order to reduce the amount they owe.
Another option may come in the form of a debt consolidation loan through a consumer credit counseling agency. Through such a loan, people can transfer what they owe on multiple accounts, which can often lead to lowering the amount of interest they would otherwise pay.
Another advantage to debt consolidation is that it makes bill payments easier. Rather than deal with multiple bills, consolidation puts debts into one bill, which should be simpler to keep track of.
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