The Disadvantages of Kentucky Debt Consolidation
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Transcript of The Disadvantages of Kentucky Debt Consolidation
Debt consolidation companies attempt to negotiate with your unsecured creditors for
a lower interest rate,
You make one monthly payment to the debt consolidation company and
the company uses that money to pay your creditors
You could have several creditors that you must continue to pay each month in addition to your payment to the debt
consolidation company
Creditors can continue to take legal actions to collect the debt including
filing a collection lawsuit
Creditors can continue to report negative remarks on your credit report, especially if you are paying less than the full balance owed on the account
If a creditor “forgives” a portion of the debt, you must report the “forgiven” amount on your tax return as income
Creditors can continue to contact you in order to collect the debt. (i.e.
debt consolidation companies cannot stop creditor harassment.)
You are trading unsecured debt for secured debt if you use your home, vehicle, or other assets to secure
the debt consolidation loan
If you cannot make the payments on the loan, you face losing the asset through repossession or
foreclosure
If you are unable to pay the debt payments each month to individual creditors, you have a high risk of becoming delinquent on the debt
consolidation loan
The interest rate on the debt consolidation loan could be higher
than on some of the individual accounts
You could also pay more in the long term if the debt consolidation loan will take longer to pay off than the
individual accounts
In many cases, a bankruptcy will solve your debt problems without
the disadvantages of debt consolidation
contact our office for a free bankruptcy consultation to get the facts about how a bankruptcy filing can help you solve your financial
problems permanently
Contact us at our Radcliff Office in Hardin County at (270) 351-6032, our Louisville Office in Jefferson
County at (502) 964-1968) or toll-free at 1-800-754-HELP to schedule a free consultation with one of our
attorneys
You may also contact our office through our convenient online
contact form
The bankruptcy lawyers of Musselwhite Meinhart & Staples,
PSC have over 50 years of combined legal experience
Click to visit:
www.mmslawonline.com
Content provided by: Best Legal Practices