In Florida and nationwide, our economy and other factors continue to draw many consumers to the point of facing uncontrollable debt. While services such as debt consolidation companies and second mortgage lenders may appear to be life-saving alternatives to get out of debt, they represent the depletion of a consumer's income and/or the spending down of one's assets. It is often discovered, after a period of painful failures in trying other remedies, that a personal consumer bankruptcy represents the best choice for getting a fresh start with a clean slate.
Debt consolidation programs can drain the consumer's income and make economic survival a desperate battle. Worse yet, such companies are not always reliable. Some of them may close up without notice and disappear, along with thousands paid over to the company by the innocent customer. In some cases, the company will close or disappear, taking with it thousands in customer payments that were supposed to go for debt reduction.
Debt consolidation is based on getting cooperation from all of one's creditors, a task that the debt consolidation company cannot guarantee. In addition, even one late payment may put the consumer's plan into turmoil. When a bankruptcy alternative is available, it is more often than not a counterproductive effort to spend one's resources on debt consolidation.
Consumer bankruptcy attorneys in Florida and nationwide usually offer a free consultation to go over the economic situation of the individual or the married couple who is struggling with debt problems. Such a meeting can be a valuable way for consumers to determine their true budgetary picture and the options that may be available. The bottom line will depend on how far into debt the consumer has gone and the impact that the debt burden has had on the ability to manage a monthly budget. The bankruptcy attorney will also review the situation to determine whether the individual or married couple are qualified under the law to file for bankruptcy relief.
Source: dallasnews.com, "Here's how debt consolidation can go wrong, and what you can do to avoid it", Liz Weston, July 17, 2017