Debt Consolidation – An Alternative to Bankruptcy

man grips head looking at papers

It seems like the number of bills is endless these days. With car payments, phone bills, an infinite number of media subscriptions, and household bills, how are you expected to save money or buy gifts for loved ones? People who feel like they’re drowning in debt don’t necessarily have to file for bankruptcy. Debt consolidation is a great bankruptcy alternative that simplifies debt payments and creates a layer of financial stability. 

What is debt consolidation?

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Debt consolidation is the process by which an individual takes out a large loan to quickly pay off a variety of smaller debts. Essentially, the purpose of this is to avoid the hassle of paying off multiple debts with varying interest rates and sizes by concentrating them into a single debt with a single monthly payment. Debt consolidation is a great bankruptcy alternative that gives you more financial freedom. 

People typically take out large loans and use the funds to eliminate credit card debts, overdraft fees, household and car bills, and other “small” debts. The interest rates, offered by banks and credit unions, are not fixed rates. Rather, they are determined by a combination of your credit score and the collateral you offer the bank.

When is debt consolidation a good idea?

Debt consolidation is a good idea when you’re overwhelmed by a large number of monthly payments. Navigating through various banking portals and company websites can be a serious drain on you and makes it easy to forget about a payment. Next thing you know, you’re even more behind on your debt payments. 

The simplification of your debt payments through consolidation typically lowers the cost of your monthly payments. A lower monthly payment opens up more opportunities for financial activity such as a larger grocery bill or building your savings. 

Debt consolidation is a great bankruptcy alternative that is an attractive prospect for many people. Are you not sure if its the right fit for you? The financial experts at Lazard & Associates can analyze your finances to determine if you qualify for debt consolidation and if it’s the right fit for you. 

Is debt consolidation the right fit for you?

Although we recommend you speak with an expert to get a full picture of your unique situation, there are a few broad guidelines that can help you determine if consolidation suits your needs. 

You may not qualify for the loan if you have a poor credit history. Another roadblock to debt consolidation is your employment status. You’ll likely be denied a loan if you are not employed and lack the level of income required to meet your monthly payment. 

young couple surprised by debt consolidation papers

Failing to put up collateral is another reason why banks may deny your consolidation loan application. Collateral, such as your house, is a way banks can minimize their losses should you fail to pay the consolidated payments. 

There are, however, instances when banks will approve your debt consolidation loan despite lacking the criteria for it. Contact the experts at Lazard & Associates to determine whether or not this is an appropriate route for you. 

Licensed Insolvency Trustee in Ottawa

Have you been drowning in debt payments and struggling to keep up with them all? Debt consolidation is a great bankruptcy alternative and may be the right solution for you. Contact Lazard & Associates today for a consultation and we can walk you through every step of the process. 

Lazard & Associates is a family-owned insolvency trustee practice in Ottawa and we have more than 20 years of experience helping people through financial hardship. Are you ready to join the Lazard & Associates family?