Apart from providing a healthy lifestyle, Colorado is a beautiful state to reside in. Even then, the cost of living in Colorado is 5% higher forces residents to fish out loans. In turn, they choose debt consolidation in Colorado to save themselves from bankruptcy.
If you resonate with this, you are not alone in this. Research shows that by 2026, the Colorado debt will reach $26.39 billion.
Even though debt cannot be avoided due to unavoidable circumstances, you can avoid bankruptcy. This way, you no longer have to fear your credit card. In turn, you can live a dignified life in the beautiful state of Colorado. The only way to save yourself from a whirlwind of issues is to choose debt consolidation in Colorado.
This article will take you through the debt consolidation strategies and more.
What is Debt Consolidation in Colorado?
Colorado debt consolidation is a safer alternative to bankruptcy. It is a sensible way to become debt-free when you have exhausted credit card limits and minimal monetary funds.
In its essence, debt consolidation in Colorado will require you to refinance your debts. For example, you need to take out a loan to help you pay the remaining debt. Indeed, it will help you become debt-free without overwhelming and exhausting your financial stature.
It is a perfect solution when you have high amounts of consumer debts.
Coloradoans are good at solidifying their finances because there was a 16% decrease in state-wide bankruptcy filings. However, there were still 4,552 bankruptcy claims in 2021.
Indeed, you would want to refrain from adding to the number. That is why debt consolidation in Colorado is crucial. You can eradicate personal debt through loan refinancing and help enhance your finances while living a stress-free and debt-free life.
Note: Debt consolidation is a long process and does not occur overnight.
The Debt Consolidation in Colorado Options
If you have taken out loans and exhausted your credit limits, consolidation should be your lifeboat. Life is unpredictable, and you might not have control over your spending. Using your credit card might seem more manageable, but it eventually piles up a huge debt.
That is why you need an escape plan or a plan to avoid debt initially. There are various Colorado debt consolidation options that you can choose.
Debt Consolidation Loans
These loans are helpful if you have built up a considerable debt amount. You can refrain from credit card closures through these loans, but it comes with limitations.
For example, you are taking out another loan to pay off the one you already have. It means you would have to pay that loan off within a set timeframe but at a lower interest rate. In addition, you will need an average to good credit score to be eligible for these.
Debt consolidation loans like credit card balance transfers and unsecured personal loans can be great options. However, home equity loans and HELOCs can be a risky move.
Fun Fact: Colorado does not allow home equity debt settlement or settlement for debts from credit unions.
Debt Management Plan (DMP) and Credit Counseling
The most popular strategy for debt consolidation in Colorado is using a debt management plan. If you couple it with professional credit counseling, you can have a structured approach.
The Colorado government offers you a debt management program by providing credit counseling. Indeed, the government is trying to help the residents, which might motivate you. With a DMP, you can streamline your debt and make monthly payments.
For example, the program will club the debts together and help you make one payment. The agency you choose will deal with the negotiations. All they require is a certain fee.
Similarly, credit counseling will help you understand your finances and keep you on a budget.
Both these options are the best ways to seamlessly consolidate your debts without hurting your mental health and bank balance. You will have proper strategies to relieve you from upcoming and ongoing debts.
Apart from these, you can apply for debt settlement and negotiate with your lenders. It can reduce the principal balance and minimize the total amount owed.
This option should be your last resort when other consolidation techniques do not work. The settlement will highly affect your credit scores, but it will make you debt-free. Moreover, the reduced debt balance from this will lower the interest rates.
Some Coloradans believe that this is the least costly option when you have a massive debt pile. It indeed is the last step before declaring bankruptcy.
How to Remain Debt-Free in Colorado?
The Centennial State has a lot to offer. It means that the news about Colorado being 4th for credit card debt is accurate. Would you like to deal with the debt before it occurs or after?
Indeed, you would want to find a way to remain debt-free forever. Once you have already gone through consolidation, you will need a strategic plan. Otherwise, you might spiral back to your old habit.
You can help yourself by successfully keeping a check on these:
- Have a realistic budget
- Minimize or quit using credit cards
- Look for moral support
This way, you will no longer need debt consolidation in Colorado to live a better life. No more debt stems from your understanding of financial management.
The Bottom Line
Colorado is a great place to reside, but financial challenges loom in every corner. A financial crisis can happen to anyone. But you have to option to deal with it without declaring bankruptcy.
Debt consolidation in Colorado is the only option to become debt-free seamlessly. You can either choose a DMP or take out loans for the same.
Either way, it will help you live a dignified life without stress. It would be wise to choose credit counseling to help you prepare for the future. This way, you can deal with your ongoing debt and manage your future finances.
Remember, Colorado does not allow the refinancing and consolidation of secured loans.