If you are having trouble keeping track of multiple debt payments, it may be time to consolidate existing balances. Consolidating existing debts into a single payment minimizes the risk that you miss a payment. Furthermore, it may reduce the interest that you pay to your Florida creditors.
Debt consolidation options
A balance transfer allows you to consolidate multiple credit card balances onto a single card. Typically, credit card companies waive interest charges for up to 18 months for new customers. This may allow you to pay down your debt without the need to file for bankruptcy or take other drastic action. You may also be able to consolidate debt through a personal loan or through a home equity loan. Assuming you have good credit, these loans may come with rates of 5% or lower.
Comparing debt consolidation with bankruptcy
A Chapter 13 bankruptcy generally allows you to reorganize secured and unsecured debts and repay balances over a period of three or five years. However, doing so may come with a significant hit to your credit score and creditworthiness. Conversely, consolidating debts with a balance transfer or personal loan has little impact on your credit score. As a general rule, it is the ideal way for those with high credit scores or positive credit histories to manage their debt in an affordable and timely manner.
Failing to make debt payments in a timely manner may result in the loss of property and other consequences. Although bankruptcy may enable you to eliminate or reorganize debts without losing property, it may not necessarily be the best option in your case. If you think that you won’t be able to make a debt payment on time, it may be best to ask your lender about your options.