Debt Consolidation: Phoenix Residents Have Options Available

August 3, 2022

Phoenix, Arizona is known for being a sprawling desert cityscape. The fact that its residents get to soak up nearly 300 days per year of sun is enough to make people who live elsewhere jealous. This beautiful—albeit dry—area has been inhabited since as far back as 700 A.D. by a community of people who built an expansive irrigation system to turn the land from barren soil to fertile ground. After the Hohokam civilization disappeared, Phoenix rose again from the ashes in 1868 when people started using canals to bring water to the arid land.

Now, Phoenix is the fifth-largest city in the entire U.S. with a population exceeding 1.6 million. But it’s not stopping there: It also boasts the second-highest population growth by city in 2017. It’s completely understandable why people choose to move to “The Valley of the Sun.” Phoenix even ranks 19th on U.S. News & World Report’s “Best Places to Live” list and 17th on the “Best Places to Retire” list.

While it’s more affordable than some major metro areas on the coasts, its housing costs exceed the national average—and they’re rising year over year. More than one-fifth of Phoenix residents live on or below the poverty line. As with any city, it’s difficult to get the most out of living here if you’re struggling to make ends meet on a daily basis.

Phoenix, in particular, is a city struggling with debt. Its median income is $29,643—while its average debt per person is $23,762. You see the challenge here. Luckily, debt doesn’t have to be a permanent state of being.

Step One: Finding the Right Debt Relief Solution in Phoenix

Defeating debt is a matter of first finding the right solution for your financial circumstances. Luckily, Phoenix residents do have options to explore like debt consolidation, debt management, debt settlement and more. Let’s take a closer look at what each of these options entails.

Is a Debt Management Plan Right for You?

Debt management is designed to address a couple of the trickiest aspects of debt: excessive interest rates and the difficulty of juggling multiple balances. Working with a credit counseling agency, you may be able to set up a payment plan that streamlines your debts into one payment while also reducing your interest rates.

A debt management plan (DMP) really only provides moderate debt relief. Consumers will still pay back all the debt they owe—it’s just the interest rates that may be lower. It also requires a fee to undergo credit counseling with a DMP.

Should You Try Debt Consolidation If You Live in Phoenix?

What about debt consolidation in Phoenix? This strategy also aims to tackle high interest rates. Consider the difference between repaying a credit card balance with a 25 percent interest rate vs. repaying a debt consolidation loan between 10 and 20 percent over time. The latter sounds more manageable, right?

Debt consolidation for a Phoenix resident would entail taking out a personal or consolidation loan, using it to pay off multiple other debts, then focusing on making this single payment each month for as long as it takes to pay back. While it doesn’t reduce the principal amount owed, it can take care of tricky compounding interest.

The primary risk here is falling behind on your loan repayment. If you offered an asset like your vehicle or home as collateral, you’d then be at risk of losing it. Failing to stick with your debt consolidation plan for as long as it takes—often two to five years—will also impact you negatively.

What Is Debt Settlement?

Another option for major debt is settlement, also called resolution. The goal here is to reduce the actual amount you owe through negotiations with creditors. First, you must deposit money monthly into an account you control, often in lieu of keeping up with your payments to creditors. Then it’s time to use these funds to negotiate with creditors, hoping they’ll agree to a lesser payment in exchange for it being timely—and better than nothing.

It helps to have experienced professionals on your side, especially if you’re new to debt settlement. Freedom Debt Relief resolves nearly 44,000 accounts per month on average, and has settled more than $9 billion so far. Enrolling in a reputable program like this one means you’ll have trained negotiators to contact creditors on your behalf, plus this organization has established relationships with many creditors.

Phoenicians should be aware debt settlement, like all debt relief options, comes with some setbacks. Whenever you stop making payments on your debts, your credit score will take a hit. While it can resolve your debt in 24 to 48 months on average, it will not stop collection calls. There are also no guarantees your creditors will “play ball,” so to speak.

Speak to a Debt Expert Today

Learn more about settlement, management and debt consolidation in Phoenix, Arizona today! Call 800-910-0065 to speak with a Certified Debt Consultant.