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Causes and Cures of Debt Consolidation

The idea behind debt consolidation is that it’s supposed to help you manage your debt in order for you to get free of it. Basically, you combine all your bills into one, which then has a lower monthly payment, than if you were to combine existing payments of each of your debts. Sounds good in principal, but I have read in more than a few periodicals, including the NY Times and Time Magazine, that many people are finding themselves with the same debt load two years later. How could this be you ask?

Simple, for these people, debt consolidation is treated like a symptom, not the underlying problem. Your debt consolidation will only work if you treat the cause. Let’s examine a few of the most popular causes of chronic debt and then I’ll provide some treatments for this particular cause.

CAUSE 1: You are very sick and/or had a major accident. In this case, depending on how sick you are and what your prognosis is, the best you might be able to do is tough it out until you get better or receive a major settlement. If you’re going to “tough it out,” then it’s critical that you stay current on all your non-medical bills. Next you’ll want to negotiate the medical ones (or use debt consolidation). In this case, as strange as it may seem to you, you should pay your utilities bill before your doctor bill. There are people to help.

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There’s a good chance that your hospital has someone on staff to help you find them. Let your medical care providers know that you are going to pay them, in time. Most doctors will work with you on a payment plan (or in debt consolidation). A few year’s back, about a year after our first child was born, we finally received the medical bills showing what we owed (after insurance had paid it’s claims). At the time, I couldn’t afford to pay the entire bill. We spoke with the OBGYN and asked to break down the payments into 3 terms. Believe it or not, the Dr. was overjoyed that we had contacted her and was very willing to let us pay over 3 months. Prescriptions, unfortunately, are trickier; because unless you have easy access to Canada, you probably can’t negotiate the price of your medication. You’ll likely have to do your best to buy your meds, while you work around your other debt. Bottomline, Medical bills are the largest cause of bankruptcy in America by a large margin. Look for help as soon as you think you’re getting into trouble. Don’t be ashamed. It’s better to get some advice and move in the right direction, than to wait too long and eventually have no options besides bankruptcy.

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