Debt Consolidation: Modesto Residents Have Options Available

August 3, 2022

Modesto, California offers residents the best of both worlds: Access to beautiful nature and a bustling downtown area with the feel of a city. Long serving as an agricultural shipping center, the Modesto area is surrounded by ranch- and farmland. In fact, famed Star Wars creator George Lucas was born here in 1944 and grew up on a walnut ranch just outside of town—a fact that’s celebrated by the city’s Lucas Plaza.

The city’s motto is “Water, Wealth, Contentment, Health,” but life in Modesto doesn’t come cheap. The cost of living and the median cost of buying a home are higher than the national average here. Meanwhile, the unemployment rate surpasses 8 percent. Almost one-fifth of Modesto residents live on or below the poverty line.

There’s no shame in seeking debt help in Modesto. If you’re running up debt just to stay afloat, you owe it to yourself to consider your options for debt relief before the situation gets more out of hand.

Learn About Debt Solutions Available to You

Your first question is likely something along the lines of “What are my options?” The best solution for Modesto residents depends on their circumstances, like the amount and nature of their debts. Here are a few debt elimination strategies to explore.

Debt Consolidation: An Option for Major Debt in Modesto

Do you have multiple debts totaling more than $10,000? You might be a strong candidate for a debt consolidation loan in Modesto. Consolidation involves taking out a loan to cover your debts. Then, instead of trying to coordinate repayment for multiple balances, you can focus instead on making monthly payments on this loan.

Debt consolidation for Modesto residents only works if you can get a lower interest rate on the loan than you were paying on your other debts; otherwise, you’ll just be exchanging one debt for another. To secure the best interest loan, you may have to offer up collateral—making it all the more important to pay back your loan in full, on time.

Tips for Pursuing Debt Settlement

Debt consolidation can help you get better interest rates, but debt settlement aims instead to reduce the actual balance you owe. It’s a viable option for people who are having trouble keeping up with minimum payments.

The first step is enrolling in a reputable debt relief program with a proven track record—like Freedom Debt Relief, which has settled more than $9 billion in debt. If you’re accepted, you’ll start making monthly deposits into a dedicated account. Note: This often occurs at the expense of keeping up on your payments to creditors, so you’ll keep getting collection calls and your credit score may take a hit. This is why it’s so important to stick with the program, so you can reap the rewards.

Once you’ve saved up a certain amount, negotiators will contact your creditors in an attempt to reach a settlement. The goal is to get creditors to accept a settlement that’s less than your outstanding balance—which they often will because it’s better than getting no payment. If they accept, the money you’ve deposited will go toward paying down your debt for less.

Debt settlement is a commitment, as an average program takes 24 to 48 months.

Filing for Bankruptcy: A Last Resort

Bankruptcy is a serious financial choice that will affect your credit score for years to come and may require you to liquidate some of your assets. It’s really only an option for people who feel their debts are unpayable.

Chapter 7 bankruptcy is difficult to qualify for, but absolves consumers of needing to repay unsecured debts. However, filers often have to sell off assets. Chapter 13 bankruptcy may reduce debts, and you’ll work out a repayment plan through the court. However, you may be able to keep important assets like your home.