Debt Consolidation in San Diego: A viable solution?
According to the laws of the United States, there are different ways to end debts in the town of San Diego, one of them is debt consolidation. This option consists of unifying all the payment commitments that have been accumulated so that, after establishing a payment plan, they can be settled effectively. But is this a viable solution? Do you need a debt consolidation attorney? If you want to know the answer, as well as all the necessary information about debt consolidation in San Diego, keep reading!
What is debt consolidation?
Debt consolidation consists of accumulating several debts from various sources, for example, different credit cards or several loans to convert them into a single debt or global loan with the aim of simplifying payments and obtaining more favorable conditions, that is, instead of making separate payments for each debt, a plan is adopted to unify and thus be able to honor all outstanding commitments, so that all monthly amounts and interest can be reduced.
How do I settle my debt in California?
1. Keep track of all outstanding debts, but it is also necessary to investigate the loans that can be requested.
2. Estimate the total amount to be paid: at this point, it is necessary to add the amount of interest to know the remaining amount to be settled.
3. Choose a form of debt consolidation and start paying it off. If you do not know which one to go to, you can ask for the opinion of a debt relief and bankruptcy lawyer.
When are debts consolidated?
You can use this resource in two situations:
- If you want to save on interest: debt consolidation can help you when you want to pay a lower interest rate, however, it is recommended to be careful when negotiating, since low interest rates are not always available.
- You have problems paying your debt: if you have difficulties facing your debt, it could be time to resort to this solution. When requesting a loan, it is necessary to evaluate the possibility of joining all your accounts payable by converting them into one, and although this is an advantage, keep in mind that the term to amortize the amount will be longer.
When is it not recommended to carry out this procedure?
For many, debt consolidation can represent the solution to all their problems, however, there are some scenarios in which it is not advisable to opt for this proposal:
- If the debt can be paid in less than a year.
- When the debt cannot be paid within the term established by the creditor.
- If the amount is not proportional to half of your income.
Common debt consolidation mechanisms
There are several debt consolidation methods in San Diego. Below we present the most prominent ones:
- Personal Loan: This method is ideal for paying off all your debt, especially if your interest rates are high. To use this method, you need to take out a personal loan for an amount similar to the amount to be paid. You will then receive the corresponding funds, which you must use to make a lump sum payment and thus consolidate said debt. When everything is covered, you will have to continue making payments on the loan for a period agreed upon by both parties (you and the creditor).
- Home Equity Loan: If you apply for this type of loan, also known as a home equity line of credit, you will probably be able to pay off your debt with a loan equivalent to the value of your home. Generally, this type of loan usually has a longer repayment term, as well as a lower interest rate, making it a good option for taking on high debts.
- Balance Transfer: As the name implies, this option involves transferring your balance from one credit card to another in order to save money on interest. To use this method correctly, you need to deposit funds from a card with a high annual percentage rate (APR) to a card with a lower annual percentage rate (APR).
You can do this by asking your bank to transfer money to an existing credit card with a 0% APR, or requesting that a new credit card with a lower APR be transferred within the next 12 to 18 months, which will allow you to pay less interest and thus pay off the debt in question.
Go bankrupt or consolidate debts?
Many people often wonder: Which is the best option for consolidating debts? Should I hire an attorney for debt settlement? The answer will depend on your situation; although experts say that debt consolidation is the best option because it does not affect the credit score in any way. At S&B Legal we do not offer debt consolidation services, but we are still fully capable of helping you resolve your bankruptcy situation through Chapters 7, 11, and 13 bankruptcy respectively.
If you would like more information on this, you can consult with specialized debt lawyers and bankruptcy attorneys, these professionals will be able to help you make the best decision depending on your needs at a given time.
Remember: if you have a bankruptcy problem, do not hesitate to contact the S&B Legal law firm immediately. Call us today at (760) 302-4652 to schedule an appointment to discuss your case!
