Debt Consolidation vs Forgiveness

Debt consolidation involves combining several high-interest debts into one low-interest loan. This can result in lower monthly payments, simplified monthly payments, and a reduction in interest. A personal loan or a home equity loan is often used to consolidate debt. There are also companies that offer debt consolidation services. These companies work with your creditors to negotiate lower interest rates and monthly payments. You may be able to get out of debt through debt consolidation, but it is important to ensure that you work with a reputable company and that your finances are not put at extreme risk.

An individual may be granted debt forgiveness when they are granted a debt cancellation or writing off. Debt forgiveness can result in the creditor writing off the debt completely, or they can sell the debt to a debt collector. There are several things to keep in mind about debt forgiveness. First, debt forgiveness does not eliminate the debtor’s obligations. Secondly, debt forgiveness may result in tax implications for the debtor, and thirdly, debt forgiveness may hurt the debtor’s credit score.

The risks involved with applying these solutions can still leave other people liable for a debt. Even though both of these options can help you get out of debt, they have important considerations. Not all debtors are the same, nor do they have the same financial standing. Anyone seeking help with debt problems should consult a Hurst bankruptcy lawyer to learn about the options.  An experienced lawyer can help individuals make an informed decision about their path to debt relief.