Although it is normal to feel helpless when faced with these situations, there is no need to feel shameful or desperate. There are options available. The challenge is to understand your situation and find the best solution. Although the choices you have before you may not be easy, you need to know that there are several options to help you overcome financial hardship. Understanding the implications of each option is the first step in regaining control over your finances.

What Is Debt Consolidation?

For those with good credit who have the ability to take out one larger loan at favorable terms and pay off multiple high-interest accounts, debt consolidation is not as effective. You can reduce the time it takes to pay off your debts and even lower your monthly payments by simply rolling all of your debts into one monthly installment. This is better than continuing to pay interest on credit cards that add more and more charges every month while you try to pay them off. This type of debt consolidation is a way to help people get rid of crippling debt.

What Happens If I Choose to File for Bankruptcy?

There are many types of bankruptcy plans. Some will eliminate all debts or financial obligations, while others will impose a structured plan to resettle under court supervision and management. This involves fully disclosing all debts and sometimes surrendering nonexempt assets. It also allows for financial assets to be reorganized into more manageable terms. Although filing for bankruptcy can have a negative impact on your credit score for many years, it may be the best option.

This post was written by Trey Wright, a lawyer with extensive experience as a Florida bankruptcy lawyer! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, specializing in bankruptcy law, estate planning, and business litigation.

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