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What Are Your Debt Consolidation Alternatives?

Debt consolidation may strike some as the best way to handle overwhelming debt issues. Going from owing multiple credit providers to just one can make the situation seem much more manageable. However, for many who deal with debt that would require consolidation, having the necessary credit history to secure an adequate loan may pose a problem. In this case, there are a few debt consolidation alternatives that you might consider if debt consolidation is not the way to go.

Debt Consolidation Alternatives

Debt Settlement

Settling your debt, whether with the assistance of a debt settlement company or on your own, can be one of the debt consolidation alternatives that can help you out when other methods fail. Debt settlement does not require you to have a certain level of credit in order to qualify, which can help those who cannot get a debt consolidation loan. During the debt settlement program, you will most likely make smaller payments than what you would have paid to your creditors. The main benefit of a debt settlement program as one of many debt consolidation alternatives is the ability to settle your debts for less.

Credit Counseling

As another alternative to debt consolidation, credit counseling might not seem like much at first glance, but it can be a powerful tool in sorting out your financial life. While it might not have the direct benefits of other debt consolidation alternatives, it also doesn’t have to cost you anything. Many credit counselors have their services listed online and while some may charge you, most will not. If deemed necessary, your counselor may suggest a debt management program to help you rid yourself of bothersome debt.


Having to resort to bankruptcy can be a relief or a disappointment. Bankruptcy is largely seen as a last resort, but it can help eliminate debt instantly in the right situation. Filing for bankruptcy can discharge many forms of unsecured credit. Bankruptcy will stay on your credit record for at most 10 years and may hinder you from receiving new lines of credit within that time. Because of the many detriments, many people try to avoid bankruptcy at all costs. Even though these negative aspects exist, the fact remains that bankruptcy is one of many viable debt consolidation alternatives.