If you are living with serious debt problems, you likely don’t care where relief comes from, as long as it comes. Unfortunately, you need to be careful about how you approach your debt. There are many unscrupulous people offering “debt relief” services that won’t actually relieve your debt. That said, bankruptcy may not be the best way to address your debt situation. Restructuring debt, consolidating debt, modifying loans and other actions can help you take control of your financial situation.
At The Turnaround Team, our experienced lawyers help people tackle debt problems. We understand the benefits and drawbacks of bankruptcy and other debt relief tools. We have decades of experience helping people get out from under crushing debt.
What Is Debt Consolidation?
– Brian M. Blum, Managing Attorney
In simple terms, debt consolidation is nothing more than gathering up multiple sources of debt and converting them into a single, larger debt. If you are wondering how that could possibly help you, that’s a good question. If you can’t secure a lower interest rate, the minor convenience of substituting many payments for one is worth very little.
Debt consolidation schemes are often used to exploit people in financial trouble. Hidden fees, costs and collateralization issues can make a bad financial situation much worse.
There are situations in which debt consolidation can be a good idea. If bankruptcy is not right for you, for whatever reason, debt consolidation is one path to consider, provided you can secure the loan on terms that benefit you.Get a Free Bankruptcy Consultation
Rather than allowing you to default on a loan, some lenders may be willing to restructure your debt. Restructuring generally involves reducing debt by extending the length of your payments and offering some collateral or equity in return.
Debt restructuring is a common practice among corporations in financial difficulty, but it can also be used to help small business owners and individuals with sub-prime mortgages. As with debt consolidation, the drawback of this approach is in dealing with lenders. Debt problems often come with poor credit scores. Lenders have little incentive to offer fair terms. In the end, you may end up paying much more than you should, while also taking on greater risk in the event of a default.
Debt Elimination and Debt Settlement
Perhaps the most enticing offer for people in financial trouble is the chance to reduce or eliminate debt for pennies on the dollar. Debt settlement companies make just such a promise, but it is important to read the fine print.
Debt settlement companies ask you to stop making payments and to start depositing money in a dedicated savings account. They then work to negotiate lump-sum payments with your creditors that will resolve the debt you owe.
When done correctly, this can allow you to get out from under your debt more quickly and for less money than you otherwise could. When not done correctly, you could find yourself even deeper in debt, thanks to growing interest, fees and penalties. You can even be sued, leaving you open to wage garnishment and liens against your home. You must be careful to choose a reliable professional team to handle debt settlement negotiations.
Contact Our Team Today
If you are struggling with debt, let’s turn it around. Call us at at(480) 420-1999 or contact our law firm online to schedule a free consultation to learn more about your options. We can explain the various tools for dealing with debt and put you on the right path to financial wellbeing.