Finances, Creditor Harassment, Bankruptcy, and You - Part 2


In part 1 of our series we discussed the importance of organization. But of course, keeping files organized does not pay off your creditors. What can you do to erase your debt? This is a touchy subject and you really do have to be careful.

Debt Consolidation is a popular and tempting choice for many consumers. If you can combine all your debts into one lump sum with one company, maybe things will be better. However, this often opens the consumer to fraud and scams. Debt consolidation is an area that is not as regulated as it should be and often that one nice payment mostly pays the consolidation company’s fees and contributes very little to your actual debt.

There are two other types of debt consolidation that are available: Home Equity/Refinance and 0% Credit Cards. These sound great as well right? You can refinance and add all your debts to your home mortgage or you can take out a separate home equity loan. The drawing factor of this type of consolidation is the interest rate. It is often lower than the interest rate on credit cards and can save you a lot of money. However, with the real estate market being as volatile as it is now, banks are more strict with who they will lend. There is also the risk that your circumstances may change and if you fall behind, you may lose your home.

The last option, 0% Credit Cards; has it pros and cons as well. Six to twelve months of interest free payments sound like a great idea for a lot of consumers. If you have smaller bills and the income to pay them off in that period of time, then that is a great choice for some. BUT if you have a large amount of debt, you may just be putting off the inevitable. It is not a good idea to consolidate outside of your means.

Often, these great interest free offers have hidden fees and regulations that could make your financial situation worse. And more often than not, these offers are given to those with a good credit score who don’t really need it. If you do choose the Debt Consolidation route make sure you read all of the fine print. This goes for any type of consolidation–know what you are getting into before you sign anything.

If we can help answer any questions you may have, please contact our office today for a FREE CONSULTATION.

To Be Continued….

Part 1 | Part 2 | Part 3 | Part 4

Lam Law Firm, LLC •1335 44th Ave North • Suite 100 • Myrtle Beach, SC 29577

DISCLAIMER: The information contained on this page is for general information, only. It is not intended to be legal advice, nor should you make legal decisions based on this information. Please consult one of our attorneys to see how the law applies to your particular situation.