Michigan residents who are looking for ways to better handle their high-interest debts may want to look into debt consolidation. This may allow them and others to make one payment each month at a lower interest rate than what is currently being paid. Debt consolidation may be best for those who have total debts that are less than 50 percent of their income.
It is also best for those who have good enough credit to qualify for zero percent interest credit cards. Those who can’t qualify may also benefit by using personal loans for consolidation. Personal loans generally come with a lower interest rate than credit cards and are paid off in a set amount of time. However, those who have small debts that may be paid off within the next year may not benefit from such action.
It is important to note that consolidation is only a way out of current debts. It does not address why the debt was accrued or stop anyone from accumulating new debt in the future. Those who owe more than 50 percent of their total income or who won’t see themselves paying off their debts in five years or less may benefit more from a debt relief program or by filing for bankruptcy.
Anyone who is experiencing financial challenges may benefit from bankruptcy. Filing for Chapter 13 bankruptcy may make it possible to retain property such as a house or a car. Other assets such as money inside of a retirement account may also be exempt when filing for either Chapter 7 or Chapter 13 bankruptcy. An attorney can explain the eligibility and other requirements of each chapter.