Boca Raton Debt Consolidation Lawyer
There are many ways that people get into debt, and for the most part, these events are beyond their control. There are also many ways to get out of debt. This time, you are in control. A debt consolidation plan through Consumer Credit Counselling Service or another entity could be a good idea in some situations. In most situations, however, these loans simply make things worse.
The dedicated Boca Raton debt consolidation lawyers at the Law Offices of Stephen Orchard look at every possible solution before we recommend one. The final decision is yours. No matter what you chose, once we get started, we are with you until the end of the line. If debt consolidation is the way to go, we help you find the best possible loan terms. If something else is the answer, we are there.
Debt Consolidation Pros and Cons
As a general rule, borrowing money to pay off debt is a bad idea. This approach makes little sense from a theoretical perspective. However, in many cases, a debt consolidation loan might be just what the doctor ordered.
Excessive credit card debt might be one of these situations. The average credit card interest rate is above 20 percent. So, even if you make twice the minimum monthly payment, the total balance hardly budges. Even if the debt consolidation loan’s interest rate is 10 percent, much more of your money goes to the balance, as opposed to the interest.
Other debt consolidation loans involve formal refinancing agreements, such as refinancing a home loan. When interest rates are low, it’s normally a good time to at least think about refinancing, especially if your current loan has a high interest rate.
Now for the bad news. Credit card debt consolidation loans might have fees as high as 25 percent. As a result, the repayment is a zero sum game. You are no longer paying a high interest rate to the credit card company. But in effect, you are paying roughly the same interest rate. It’s just divided between the credit card company and the loan provider.
There’s also the 10 percent rule to consider. If your credit card bills and other unsecured debt exceed 10 percent of your annual income, there is no realistic way for you to comfortably pay off this debt. Even the most favorable debt consolidation loan in the world probably will not make a difference.
As for home and other loan refinancing, credit score requirements usually apply. If you are currently behind on payments, your credit score might not be high enough. Furthermore, many lenders flatly refuse to work with borrowers in these situations.
Debt Consolidation Alternatives
Consumer bankruptcy and non-bankruptcy debt negotiation are the two primary alternatives that our Boca Raton debt consolidation attorneys provide.
Both Chapter 7 and Chapter 13 eliminate most unsecured debt. In both cases, you have the option to pay off certain debts. For example, Michael might want to pay off Dr. Y’s medical bill so Dr. Y continues treating him.
In non-bankruptcy debt negotiation, our lawyers bargain with creditors. We are usually able to obtain more favorable repayment terms, such as a longer repayment period, a lower interest rate, or even a partial balance forgiveness.
Reach Out to a Dedicated Palm Beach County Debt Consolidation Lawyer
If crushing debt is a problem, legal solutions are available. For a free consultation with an experienced Boca Raton debt consolidation attorney, contact the Law Offices of Stephen Orchard. Convenient payment plans are available.