Albuquerque, New Mexico, is an idyllic, high-desert town located in Central New Mexico. At an elevation of just over one mile, the climate stays pleasant year round, despite its southern latitude and arid surroundings.
Albuquerque has long had a thriving economy, attracting innovators, eccentrics and tech wizards for decades. During World War II, it played a central role, along with Los Alamos, Alamogordo and other neighboring locales, in the development and construction of America’s atomic bombs. Still located there are Sandia National Laboratories and Kirtland Air Force Base, holdovers from the WWII era. Today, this vibrant core of high tech and military industry drives a peripheral economy that includes some of the biggest names in aerospace. Lockheed Martin, Northrup Grumman and many other firms employ tens of thousands of people there.
While New Mexico has a nominally high unemployment rate, Albuquerque itself has been consistently recognized as one of the best cities in which to find jobs, live and work. Bankruptcy rates are generally low despite New Mexico’s relatively favorable bankruptcy laws.
Albuquerque also registers on the low end of living costs and the Consumer Price Index. With both rental and home ownership costs less than half that of many similar-sized cities, Albuquerque is a friendly place to raise a family and build financial security for people of all ages.
However, like anywhere else in the United States, many Albuquerque residents rely heavily on consumer credit. This means that, at some point in their lives, many of those residents will face a financial crisis of at least some degree of severity. But working in their favor is the fact that they live in one of the most amenable cities in the world to personal wealth building. For residents who get into financial trouble, this often means that debt consolidation can be a far more attractive solution than declaring bankruptcy or making a lump-sum settlement.
Using debt consolidation as a first step to building personal wealth
Debt consolidation is particularly effective for those people who have a realistic prospect of paying down their debt completely within three to five years. In order to have the best chance at doing this, it’s important that the underlying problems which led to the debt accumulation are analyzed, recognized and corrected. Without a written plan and the discipline to carry it out, including a detailed written budget, there is no point in consolidating debt that will just continue to snowball out of control.
But for those who have a solid income, a good strategy to exit debt and the discipline to see that strategy to completion, debt consolidation can potentially save tens of thousands of dollars and allow the debtor to continue living their accustomed lifestyle.
That said, debt consolidation isn’t for everyone. Typically, only unsecured, private debts can be consolidated. Debts that are backed or ordered by the government, even if they’re unsecured, can almost never be consolidated. You should never deal with a company that promises to reduce or eliminate such debts as child support, alimony or back taxes. In rare cases, student loans may be consolidated, but that process typically involves government agencies.
But even for some who do have private, unsecured debt, bankruptcy may be the superior option. People who would be stuck paying off their debts for five years or more, even while living austere lifestyles, should consider bankruptcy. This is because the benefit of wiping out debt completely, when that debt is going to persist for more than five years, almost always outweighs even the terrible costs of declaring bankruptcy. The idea of any personal wealth-building strategy is to begin compounding returns as quickly as possible and with the highest savings rate. Being stuck with all income going towards payments for 15 years robs the debtor of their ability to accumulate even marginal savings. In such a case, bankruptcy would clearly be the better option.
However, debt consolidation can work much better when the debt can be paid off in the short term. That’s because declaring bankruptcy can make it impossible to get such things as business loans, auto loans, and personal lines of credit, which can all be crucial to maintaining income or expanding one’s business. And many companies will not hire those who have gone through a Chapter 7 bankruptcy.
For these reasons, debt consolidation should always be the first choice for quickly exiting debt while maintaining one’s lifestyle and community standing.