West Palm Beach Bankruptcy Lawyer

Be Careful When Considering Debt Consolidation

One may consider debt consolidation an easier solution to financial problems than bankruptcy, but sometimes debt consolidation can get you into even more trouble. Be aware of the following risky options when considering debt consolidation.

Hard-Money Loan

Debt consolidation loans can sometimes be hard to get, especially if your credit history is less than perfect. A consolidator may attract you with a lower monthly payment, but then they may charge you a higher interest rate, anywhere from 20 to 25 percent. So, in the end, you may end up paying more.

Debt Consolidation Companies

Large debt consolidation companies can reduce your monthly payments and negotiate lower interest rates and all you have to do is make one easy monthly payment. Unfortunately, many of these companies take a fee out of this payment for providing a service that the customer can easily do for themselves. Many times, these companies stretch out the customer’s payments for longer than necessary so that they can collect more fees. Also, some of these companies have been known to make late payments and even miss payments, making your money problems worse.

Balance Transfers

Low-interest balance-transfer cards may seem like a simple solution – at least until the low interest rate ends after a few months and you have to get another card. All the cards and card activity do not look good on your credit report. These cards can end up causing more harm than good.

If debt consolidation does not seem like an appropriate solution to your financial problems, bankruptcy may be. Contact the West Palm Beach bankruptcy attorneys of the Eric N. Klein law firm by calling 561-353-2800.