California residents who have substantial debt do have options. Debt consolidation is one of them. This option allows debtors to combine all of their high-interest debts into one with lower interest.

With debt consolidation, debtors can lower their debt and reorganize it in order to pay it off quicker. However, it is not a cure-all for debt problems, and it does not address unwise spending habits. It also may not be the best solution for individuals who have significant debts for which a lower payment would not help.

There are two primary ways individuals can consolidate their debt: The first is to obtain a balance-transfer credit card that charges zero interest during an initial promotional period, transfer debt onto the card and then pay the balance within the promotional period. Another option is to obtain a personal loan with a fixed rate to pay off their debt and then pay back the loan.

Certain conditions affect the outcome of debt consolidation. The total amount of debt should not exceed half of the debtor’s income, and the debtor should be able to qualify for a no-interest credit card or low-interest personal loan. The debtor should also have a stream of cash sufficient enough to cover the consolidated payments, along with a strategy for avoiding getting into debt again.

Individuals who have overwhelming debt may obtain counsel from a bankruptcy attorney about their legal options. The attorney may be able to assess a client’s financial situation and advise whether Chapter 7 or Chapter 13 bankruptcy are appropriate. The attorney may also explain how bankruptcy may cease collections by creditors and provide a fresh financial start.