Invis - The Siemens Group Highlight 4 Debt Consolidation Myths
 October 2 2016     Posted by Siemens Group

Debt consolidation has become one of the leading methods for those with financial challenges to achieve a foundation for success in the future. But most don’t have a clear understanding on what the debt consolidation process involves, and this has led to the formation of many myths on the subject. Within this post, we’ll present our guide for four of the most common debt consolidation myths.

1. Debt Consolidation is the Same as Bankruptcy

Debt consolidation and bankruptcy are different in many ways. And a person going through the process of filing for bankruptcy should carefully consider debt consolidation as a leading option. Debt consolidation involves working directly with a company or counselor to reduce the amount of money owed. It also involves repackaging debt so that one low monthly repayment is required while paying as little interest as possible. Bankruptcy, however, involves discharging all debts under the guidance of a judge. This is a legal process that is completed over several months.

2. Debt Consolidation Will Hurt the Person’s Credit Score

Completed correctly, the debt consolidation process will not impact the person’s credit score. Other debt reduction processes such as bankruptcy do have a significant impact on credit scores as they make the person a higher risk for loans. But debt consolidation can actually improve a person’s credit score over time. That’s because the person is being proactive and making a plan for paying for their debts with their creditors. Through this plan, they can then show they’re responsible in paying for their debts and then build a foundation for future lending.

3. Debt Consolidation is Not for People Who Can Manage Money

There is a significant idea that debt consolidation proves a person has poor financial management skills. But nothing could be further from the truth. By entering into the debt consolidation process, the client is showing that they understand the options available to them and is taking decisive action to address their financial issues. It’s simply a way of organizing debts that gives the debtor the advantage and greater payment flexibility.

4. You Have to Be a Homeowner to Consolidate Debt

While being a homeowner gives you an advantage when you go to consolidate your debts with a professional, it isn’t a requirement. You can consolidate your debt whether or not you own a home. You simply have to be willing to prove your financial capacity to pay the debt over time and to commit to the repayment process with your creditors.

The team at Invis – The Siemens Group is available now to help guide you on the debt consolidation process for home owners. To learn more, call their offices today at 604-351-7438 or visit their business website at www.siemensgroup.ca.