Unsecured debt consolidation loans and loans to pay off debt are highly sought after these days. Are you up to your eyeballs in Debt? Read this article for tips on things to consider while choosing companies to get your loan from. These days, many people are heavily in debt, and therefore do not own many valuable assets, making it essential for them to be able to get unsecured loans. Debt consolidation can be a good option for repaying all your debts together by combining your bills for making monthly payments.
This is question that a few people have been asking recently and the truth is most financial institutions offer unsecured loans, but the question should be do you want an unsecured loan or can you get an unsecured loan. Unsecured loans, sometimes referred to as signature loans, are available, but at what price? Most loans of any amount exceeding $1500 are secured with collateral, which is either your home and or possibly your car. There are two things you should know when it comes to unsecured loans.
First, they require excellent credit and secondly, they normally come with a higher interest rate because the bank is taking a bigger risk by lender money without collateral backing. If you are trying to consolidate debt, your best option is probably not going to be a loan. You are just moving the debt around. In order to start seeing it decrease, you will have to reduce your expenses and/or increase your income. Debt consolidation loans have a lower interest rate than most credit cards, but in most cases they spread out over 15 years or more.
This will give you a lower payment, but more interest because you are taking longer to pay off the loan. Time is money and this is no different. Most people debt counseling or debt settlement are better debt relief options. They do not involve a loan and it should take you no longer than 7 years to pay off your debt and could take as little as 3 years. Both of these options are better than another loan. It is borrowing money that has caused you to seek debt relief.
Another loan is not going to solve the problem. There are a number of companies that specialize in evaluating your debt and telling you whether debt settlement or credit counseling better suits your financial needs. And from there, your debt management organization will set you up with a debt management plan that helps you begin paying off your debt. Chapter 13 Bankruptcy is a legal process that differs from traditional debt consolidation in many important ways. If you are trying to decide between these two processes, this article will help you make your decision.
While a Chapter 13 bankruptcy is actually a type of debt consolidation, it differs from traditional debt consolidation in certain important legal aspects. The most glaring and important difference is the power it wields. Backing up Chapter 13 bankruptcy is the Federal Bankruptcy Code, which can be a huge advantage when you are needing relief from debt. An automatic stay will lock into place as soon as you file a Chapter 13 bankruptcy. It’s in the form of a Bankruptcy Court injunction which effectively stops most recovery efforts that have been launched against you.
Garnishments, repossessions, foreclosures, creditor harassment and license suspensions will cease. Your creditors will be forced to stop all such actions because this injunction has the legal chops to back it up. In reality it’s a court order that mere debt consolidation services cannot provide. In Chapter 13 bankruptcy, such specific debts as tax debt, child support arrears, car payments, and mortagage arrears can be rolled into one monthly payment. This is good news because the majority of traditional debt consolidation services allow only specific debts in the settlement plan.
Wouldn’t you rather have protection from every one of your creditors? With the power of a Federal judge ordering your creditors to stick to the repayment plan, you may be allowed to pay as little a 10% of any unsecured debts. Of course there are certain qualifications you must meet. If you can meet these qualifications the other 90% will be eliminated. You’ll be able to pay off your debts much more quickly because of the severe reduction in principal owed. Unlike a debt consolidator, your Chapter 13 attorney will vigorously represent only your best interests.
He has a legal and ethical obligation to do so, and must comply with his obligations as regulated by state law. Many times debt consolidation companies are privately run, and may, in fact, be sponsored by the creditor themselves. With a Chapter 13 attorney on your side, you have the unique opportunity of having your rights backed up under strict legal requirements. You won’t be required to post any collateral in order to proceed with Chapter 13 bankruptcy if you cannot afford the proposed monthly payments.