Does Debt and Loan Consolidation Really Work?

Having lots of debt is stressful and for many the thought of getting to a position where you think you will be able to pay it all off seems pretty much impossible. 

Debt consolidation is the process of taking all of some of your debts and putting them all together. The thinking behind this is that by lumping all your debt into one loan with reduce your interest rate and make it more "affordable" or "payable". 

In theory, consolidating seems like a good and viable option. However, in practice, debt consolidation rarely works out, and experience shows that in the long run, people don't save money but in fact it ends up costing them more. Learn more about why debt consolidation rarely works here, Debt Consolidation Traps.

Even finance guru's like Dave Ramsey admit that debt consolidation services don't work and are nothing for than a "con". Read, The Truth About Debt Consolidation.

There do exist some somewhat reputable consolidation services, but many so-called debt consolidation companies are just scammers doing what they can to take advantage of people who are drowning in debt and are looking for help. Many of our former bankruptcy clients have tried debt consolidation companies and they all reported the same thing, it cost them a lot of money for the service but balance of their debt did not change. 

Rather than waste your time, money and sanity on debt consolidation, Congress has provided another option whereby people who are in debt with no foreseeable end to paying it off can get help and have a fresh start. 

By filing for relief under the Bankruptcy Code, people have a variety of options to get there financial lives back on track. Chapter 7 allows for a complete fresh start, lets you just start over with a clean slate. Chapter 13 lets you make a plan to pay back some debt in a way which you can afford. Also, the time frame for getting your life back through bankruptcy is much quicker than using unproven debt consolidation. 

Our office has been helping people for many years get relief from the stress that comes from overwhelming debt. Call Richards & Godfrey, PC today for a free consultation and let us show you all of the options you have to deal with your debt. Call 801-621-7443 or email us as office@richardsgodfrey.com.