Debt Consolidation- What is it?

Debt consolidation is a form of debt relief often used to avoid failing to pay interest on an existing debt. It is commonly used by people in order to pay off loans or eliminate their own credit card debt. The act of debt consolidation usually requires the debtor to take out a new loan in order to help pay off a previously existing loan. Essentially, debt consolidation allows for someone to pay off multiple different debts at a time, by shifting them into one debt for them to focus on. Taking multiple different debts and shifting them all into one main focus can help the debtor relieve some stress by not having to worry about multiple companies coming after them for money owed.

Close the Books on Older Debts

Sudbury debt consolidation can benefit the debtor in many ways, which is what makes it such an appealing option for both the individuals and businesses that use it. One of the main advantages of debt consolidation is that doing so can help you close the books on older debts. Being able to pay off your current debts gives you a better reputation and lets other creditors know that you are able to pay off your debts in the event of you needing a financial loan again. Debt consolidation also allows you to reassess and organize your financial planning by moving multiple loans with interest rates that vary, into one main payment that you can put your attention into.

Avoid Bankruptcy

Being able to consolidate your debt allows you to gain better control of your finances, which can then help you avoid bankruptcy. Most people use bankruptcy as a tactic to prevent collectors from coming after them about debt owed. Filing for bankruptcy can ruin your credit score and stay with you for up to nine years after your initial filing. The effects of bankruptcy include the possible loss of your property and other personal possessions.

Bankruptcy can also ruin your chances of getting jobs in the future as well as obtaining a mortgage loan. In other words, filing for bankruptcy can be a ripple effect that ends with you in an even worse financial position than you were in originally. By consolidating your debt, you can avoid having to deal with bankruptcy and make progress in the direction of improving and stabilizing your current financial situation, instead of digging yourself into a deeper hole.

If you’re suffering from debt and are interested in learning more about how debt consolidation works in Canada, give 4 Pillars Sudbury a call and let us walk you through the process of consolidation and reclaiming your debt. We can help you with a variety of different debt management services, including professional financial consultation, debt consolidation, budget evaluation for your family or individual needs, as well as asset protection and refinancing recommendations.