If you are overwhelmed with debt, you may be searching for credit card debt consolidation services. But what are the benefits? Are there risks? It can be nerve-wracking to figure all this out while debt collectors are calling non-stop. The team at Leinart Law Firm is happy to provide you with all the information about your options, and you can choose the best path for your particular situation.
What Is Credit Card Debt Consolidation?
The process of credit card debt consolidation involves taking one single loan to pay off multiple credit cards. So instead of multiple debts, you only have a single larger debt. This is done either through a loan company or through a particular credit card debt counseling service.
The Advantages
There are several advantages to credit card debt consolidation. For one, the loan may be at a lower interest rate than your credit cards. This means you may save money over the payment period, and you can pay off your debt faster. Another benefit is that there is just one single payment to keep track of, rather than multiple credit card payments to different companies.
The Disadvantages
The primary disadvantage to credit card consolidation is that you still have to pay back 100% of your unsecured debt plus interest (which may be less than your interest rate prior to the consolidation but likely will still add up over time, often to more than the original debt). Seeking credit card consolidation may not be the right fit for you depending on the extent of your debt and your income. Bankruptcy may be a better option based on your circumstances. For most people, bankruptcy will allow you to completely wipe out the debt (i.e. pay nothing further to the credit card companies) when consolidation would simply make a large problem not quite as large by shortening the payment period by a small amount. It is important that you talk this over with your attorney before seeking credit card debt consolidation services.
