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By: Adriana Noton
There are many people these days who have been facing the possibilities of bankruptcy or foreclosure, and this is primarily because of recent economic conditions that have included many layoffs or companies that are performing poorly. If you are one that has considered bankruptcy as an option, perhaps you should consider a debt consolidation instead.

This technique basically involves taking out a large loan in order to pay off all your smaller ones. It's frequently done in order to secure lower interest rates on your overall debts, or for securing a fixed rate which will not fluctuate according to the current market conditions. For many people it is also very convenient since it will only involve keeping up with one payment.

Regardless of whatever reason that you have, one attractive feature of this type of lending is that it will have a much less negative impact on your credit report as opposed to those filing bankruptcies. In many cases the borrower will simply transfer several unsecured debts into a single unsecured loan, however in many cases it's required that the consolidated debt will be backed up by some form of collateral.

Usually this collateral will be something of value that can easily cover the amount should you default such as your home or other properties that can be pledged as security. One advantage would be that the collateral is going to give you the benefit of having an interest rate which will be reduced. It's important to remember that even a small reduction in interest can equal thousands of dollars in savings

However, the downside is that when you put up your house, the lender always has the option to foreclose upon it should you end up being in default or unable to make payments. Usually this will be a last resort as most lending institutions would rather avoid this whenever possible and in most cases will work with you to try and resolve the matter in a way which will benefit both of you.

If you are considering this type of borrowing there are many resources available. Most people these days will conduct their research online to try and find a financial institution within their local area. Most will have websites that allow you to get further information and many will even feature calculators that you can use to instantly configure your payments.

These are also highly useful for debtors that have amassed a significant amount of credit card debts. These are notorious for having high rates and many people can very quickly find themselves in situations where they cannot handle the payments on these cards. By having one simple payment they are able to pay down the principal a lot faster.

Another alternative for those who do not want to borrow would be agencies that specialize in working with creditors on behalf of consumers. In many cases they are able to greatly reduce interest amounts as well as reducing the payments. Although this is a viable solution for some, it could have a negative impact on your credit.


A debt consultant can help you resolve your bankruptcy problems. Financial questions and concerns can be addressed by our financial debt experts in a friendly and professional manner.
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