Debt Calculator
Friday April 19, 2024
Friday April 19, 2024
People that have had financial troubles in the past or who continue to have them, are probably familiar with the concept of non profit debt consolidation or have at least heard of it. Debt consolidation is available in a number of different forms. For instance, an individual could take out a debt consolidation loan, which is essentially, one lump sum of money that a person uses to pay off all of their bills. This works when the debt consolidation loan is cheaper than the cost of the original loan. The individual accepting the new loan will often pay off high interest credit card debt and then focus on repaying their new lender. In this article, we won’t be talking much about this type of debt consolidation. Rather, we will be taking a look at non profit debt consolidation programs and how they can help save an individual from bankruptcy.
Bankruptcy is about the lowest a person can go financially. It is in a sense, admitting defeat. The individual or family can no longer hold things together and are now forced to give up trying to. While bankruptcy certainly isn’t the worst thing that can happen to an individual, it can be tough and it will negatively affect a person’s credit and in a big way. For some people, working with a non profit debt consolidation program can help them avoid bankruptcy. Below, we will explain why.
The goal of debt consolidation is to make it easier for an individual to pay back their loans and avoid drastic measures such as bankruptcy. Companies attempt to help facilitate this by negotiating lower interest rates with a person’s creditors, getting late fees waived or reduced and by handling all of a person’s bills. Depending on the particular program, there might also be some sort of financial education and training involved as well.
The aforementioned can help individuals avoid bankruptcy for a number of reasons. However, the biggest is probably the reduction in the amount of money being paid out each month to a person’s creditors. The reduced interest rates that non profit debt consolidation programs can negotiate will help to lower the amount of money a person has to pay each month. For instance, if a person can get their interest rate reduced from 15% to 9%, they can save a lot of money and their monthly bill amounts would be dramatically reduced. People who are forced to file for bankruptcy are unable to pay back their bills. If a non profit debt consolidation program can help lower a person’s payments enough that they can afford to pay them, they may be able to forgo bankruptcy.
When at all possible, it is important to avoid bankruptcy. If a person or family is not able to, they will pay for it for the next 7—10 years of their lives, the period of time it will stay on their credit report. A non profit debt consolidation program can help people get their finances in order so that they do not have to file for bankruptcy.