Debt is a trap or hole that many people cannot get themselves out of. The good news is that there are many solutions. The most effective solutions, however, are bankruptcy and debt consolidation. Each of these options has pros and cons that consumers need to analyze before deciding to make a decision. Consolidating debts has more benefits than bankruptcy, so it is the better option. Bankruptcy, on the other hand, is something that should only be considered after everything else has failed.
Debt consolidation is the process of paying off all your outstanding, high-interest, high penalty debts using a new low interest loan commonly referred to as a debt consolidation loan. By doing this, you will have only one payment to make every month, which is convenient. Secondly, you will be able to boost your credit rating by settling numerous debts at once and having their statuses updated with consumer credit referencing agencies. Thirdly, you will be able to avoid high interest payments and punitive penalties, so you can save a lot of money.