Bankruptcy has acquired such a negative connotation over the years that many Pittsburgh residents try to avoid this option at all costs. While exploring different methods of debt management is always a good idea, it may be unwise to dismiss one option or another out-of-hand. Discounting bankruptcy right away narrows a debtor's options and may in fact cause them to choose a debt management method that is disadvantageous to their situation.
Debt consolidation, which puts all of a person's debts in one place, is one such method that could end up being the wrong choice. This type of debt management does present an attractive face because it means a debtor must make only one monthly debt payment. It can also help the debtor formulate a plan to pay down their debt and eventually eliminate it altogether. However, it is important for those considering debt consolidation to be realistic about their debt.
Making a commitment to be debt-free is just the first step. A good next step is taking a hard look at your debt and determining if you truly are able to get control of your financial situation. If you believe debt consolidation is right for you, consider making it part of a larger plan to pay off your bills. Recognize when consolidation will not help. For example, if your debt exceeds more than half of your gross income, you might need to consider another option.
Finally, keep in mind that some debt management or consolidation companies could actually make your debt grow. Ongoing interests rates associated with these companies could worsen your situation in the end. Many of them may also demand a large upfront payment while offering no flexibility to those in debt.
One way you can approach your question is by getting legal advice from a Pennsylvania-based attorney. He or she can address your specific debt management concerns and also offer you other alternatives for managing your bills.
Source: NerdWallet, "Should I Consolidate Debt?," Amrita Jayakumar, accessed Aug. 01, 2016