Is consolidation of bad credit loan is the complete solution ? Or is there any other alternative way ?
I notice your question was asked at Yahoo India originally. My answer applies to United States law, which like India’s law, is based on English Common Law. However, there may be some parts of my answer that do not apply to India residents. Consult with an Indian lawyer for a precise answer to your question.
In the US, if you are overwhelmed by debt, you have several options. One is credit card counselling. I realize you did not mention the type of debt you have. The No. 2 consumer debt in this country today is credit card debt. (No. 1 is student Loans.) With credit card counselling, your accounts are frozen and the credit card counselling firm accepts your payments and pays each of the creditors their share of the payment. A credit card counselling plan lasts 5 years.
Another option is debt settlement. Debt settlement is also known as debt consolidation. In a debt settlement plan, the consumer hires a debt settlement company to negotiate deals on the consumer’s debts. While this negotiation is taking place, the consumer makes monthly payments into a special account. When the debt settlement company reaches a settlement with a creditor, it asks the consumer if it can make a withdrawal from the special account to settle (zero out) the debt. Settlement amounts vary, but range from 40-60 cents on the dollar.
Bankruptcy is another option. Consult with a lawyer in your state to learn if you qualify for a Chapter 7 bankruptcy or a Chapter 13 bankruptcy. In a Chapter 7, all qualifying debt is cancelled when the bankruptcy is concluded. This is called a discharge. In a Chapter 13, the debtor pays the qualifying creditors a certain amount each month for a certain period of time, usually 5 years. At the 5 year point any remaining debt is cancelled.
Remember that nothing worthwhile in life is free or painless. A "quick and easy" way to free yourself of consumer debt is probably a scam. The Bills.com Debt Coach can give you a no-cost, no-gimmick, personalized, on-line analysis of your debts and your options for resolving your debt: http://debtcoach.bills.com/
I hope this answer helps you find, learn, and save.
Bill
Bills.com