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What is Debt Consolidation?

Posted on : April 25, 2015
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Many people in Texas struggle with debt. If you are having difficulties paying your bills, you’re not alone. There are many options to help you get back on your feet financially, and a bankruptcy attorney can help you determine which is the right fit for your situation. Debt consolidation may be one such option. Here’s what you need to know about debt consolidation, and how to get the financial help you need today.

What Are Debt Consolidation Loans?

If you have a significant amount of debt spread out over several creditors, you are likely paying a lot of interest and fees. A debt consolidation loan is effectively a new loan with a low interest rate that is used to pay off multiple existing creditors. The debtor would only make a single monthly payment on the new loan. Often, debtors save a lot of money on fees and interest by taking out a debt consolidation loan and paying off their old debt.

Are They Unsecured or Secured?

Consolidation loans can be both unsecured or secured; however, the large majority of them are secured. A secured loan means that you have put property or other assets up for collateral, and if you do not make your consolidation loan payments on time, the lender may be able to take action against you and seize your property.

What Are the Benefits of Debt Consolidation?

There are a great deal of benefits associated with undergoing debt consolidation, including but not limited to:

  • Stopping creditor harassment. When you use a consolidation loan to pay off your current debts, your creditors will be satisfied and will stop attempting to contact you.
  • A boost in credit. Your credit may improve when your current debts are satisfied and reported to the credit bureaus as paid.
  • Easy payments. Tracking and paying one bill a month is far easier than tracking and paying several different bills in the same amount of time.

When to Contact a Debt Consolidation Lawyer

Although it sounds simple enough, the process of debt consolidation can actually be quite complex. It is highly recommended that debtors seek out the guidance of a skilled debt consolidation lawyer in order to increase the chances of a positive resolution.

At the Law Office of Howard Tagg, we have significant experience working with clients interested in debt consolidation. We can apply our skills and resources to your case and will go above and beyond to provide you with expert service. Contact us today for a free initial consultation to discuss your financial situation and the options you may have available to you. Call now at (903) 581-9961.

Posted in : Administrator Tyler