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Debtconsolidation might include a debt management repayment plan, creditcard balance transfer, personal loan, or equity line of credit. The main strategy in any debtconsolidation strategy involves replacing one debt with another debt, usually with a lower interest rate or monthly payment.
You pay off multiple types of loans and creditcard balances with your new consolidation loan, and you’re left with a single monthly payment to the new lender. Debtconsolidation can be a great tool to get out of debt faster – but only when it’s used correctly. Don’t jeopardize your home.
If you have a large amount of creditcarddebt or high medical costs that you can’t pay, Chapter 7 may allow you to start again. Chapter 7 is a disaster when it comes to secureddebt. . Chapter 7 will not assist you if your primary source of debt is a mortgage, auto loan, or other kinds of debt.
Creditcarddebt is a huge reason people end up filing for bankruptcy. The incredibly high interest rates alone plus the ease of procuring cards contribute to what can be a vicious cycle of maxing out limits, paying only minimums, and applying for more cards. But can you file for bankruptcy on creditcards only ?
Protect secureddebt (home and car) from default to avoid a repossession or foreclosure. Negotiate unsecured debt (creditcards) if you are unable to keep up with payments. We work with consumers seeking debtconsolidation loans, or who may be considering options like debt negotiation or bankruptcy.
Usually during a Chapter 13 you only pay off part of your debts. Priority and secureddebts, such as taxes or auto loans, are paid in full. But unsecured, nonpriority debts, such as medical bills and creditcarddebt, are only partially paid. The Trustee’s office then pays various creditors.
When You Have Too Much Debt to Handle Sometimes debt can pile up to the point where making even minimum payments feels impossible with your current income. Creditcard balances, personal loans, and other unsecured debts can quickly spiral out of control, especially when combined with secureddebts like a car loan or mortgage.
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