In our Bexar County law office, we help people who have found themselves in financial quicksand. They know they need to get out, but they cannot seem to do it on their because their strongest efforts just seem to amount to fruitless thrashing. To take the analogy further, we aspire to be the guy standing on terra firma with a rope.
Many of our clients are interested in debt consolidation, but are not quite sure what it is. We thought it might be a good idea to write a post that outlines the general contours of this process.
Debt consolidation refers to a process in which your outstanding balances are rolled into one loan. That way, instead of owing, say, 12 different creditors, you only owe one. In some (but not all) cases, debtors can achieve a slightly more favorable interest rate or more manageable monthly payment through debt consolidation.
We would like to make it clear that debt consolidation does not erase any debts. All the money you owed before you consolidated is still owed; it is simply owed to another party.
Now, debt consolidation might be a good idea for people who have spread themselves too thin and cannot quite keep up with all the people to whom they owe money but can still make their payments.
It is not as good of an idea for people who having difficulty making payments at all. Although some people can obtain some kind of financial advantage through debt consolidation, it is not always enough to make the difference between treading water and going under. For people who are really having difficulty making ends meet month after month, bankruptcy may be a better choice.
We hope this post has given you a good, general understanding of what debt consolidation is and, just as importantly, what it is not. Because each person’s financial landscape is different, whether debt consolidation makes sense for you isn’t something you can determine from just a blog post. For advice and insight, you might consider speaking with an attorney who helps people in your situation.
Source: KLTV, “Eight facts about debt consolidation,” Andrew Housser, March 25, 2013
- If you are interested in speaking with a San Antonio debt relief lawyer, the link in the previous phrase will take you to our website. It might be one of the resources you choose to consider in your thorough, comprehensive search for a lawyer to represent your interests.