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Norristown, PA Debt Consolidation Attorney

Being in debt is not a pleasant experience. Being in debt to multiple parties can feel even worse. The prospect of paying off several large amounts can be incredibly daunting, especially if creditors are beginning to bear down harder and harder in order to ensure that they get what they believe they are owed. Managing multiple debts, multiple deadlines, and multiple entities coming after you can be exhausting to the point that things may feel hopeless.

Fortunately, there are options available to people in these kinds of situations, such as debt consolidation. This is a process by which many debts are combined into one, making it much easier to manage debt. This process can help you get back on track and pay off your debts in an orderly fashion without financial distress. However, before choosing to consolidate debt, it is a good idea to talk about your situation and what makes sense for you with legal counsel.

Call Young, Marr, Mallis & Associates at (215) 701-6519 and speak to one of our debt consolidation lawyers about your situation today.

What is Debt Consolidation in Norristown, PA?

Debt consolidation is the process of lumping smaller loans together to pay off multiple debts at once. The idea is to combine various debts to lower both the monthly payments you have to make and decrease the interest rate on that debt. Consolidating many debts into one debt can make things easier for people in financial stress by making it so they have to manage one payment instead of many. This can help you stop falling behind on payments and keep track of finances more efficiently.

Debt consolidation is a great option for many people to alleviate debt, but you should not immediately choose to consolidate debt without giving it some serious thought.

Types of Debt Consolidation in Norristown, PA

There are two primary methods of debt consolidation. True, for all types of debt consolidation, you are taking out a loan, but the type of loan you take out can have some effects on the process. When you consolidate debt, you may have a secured or unsecured loan.

Secured Loans

Most debt consolidation loans will likely be secured loans. Secured loans have collateral backing them up. So, a secured debt consolidation loan may be backed up by, for example, a mortgage on your home. Secured loans for debt consolidation often have an interest set at a fixed rate, so you can better plan to pay off your debts and potentially have a more stable cash flow.

Unsecured Loans

Unsecured loans are rarer than secured ones. These loans are not backed by collateral, so debtors may not feel like they will have “skin in the game.” To compensate, these loans often have higher interest rates. Like secured loans, the interest rates for unsecured debt consolidation loans are fixed, so you should have stability in knowing how much you have to pay.

Personal Loans

Personal loans are unsecured, but they are one-time payments instead of loans, allowing for periodic withdrawals. If you believe that you can deal with consolidated debt quickly, this may be a good option to pursue.

Tips for Debt Consolidation in Norristown, PA

Debt consolidation is a useful tool to relieve debt, but you have to know what you are doing. It is very important to go over your loan options – ideally with the help of our debt consolidation lawyers.

You should look to see how long the payment term is for each loan as well as how much you will need to pay back in total. It is important to pick a loan option that is within your means. You should also be aware of the interest rate of your loan. Although it will likely be fixed in place, you should not “bite off more than you can chew,” especially if you are taking out a loan to deal with debt. Also, note whether the loan is secured or not and what the collateral is if the loan is secured.

Once you have decided on and taken out your loan, you need to keep finances under control and methodically pay off your debts. Make sure you get all payments in on time, and avoid unnecessary or frivolous purchases that may put you in financial distress. If lenders are less than scrupulous, they may encourage you to take out more loans from them. Remember to only take what you need to pay off your debts, or you will just end up in debt again.

What If Debt Consolidation Is a Bad Idea for Me?

Debt consolidation is an effective tool to help many people alleviate debt. However, it does not make sense for everyone. Debt consolidation generally requires that you already have good credit so that you can meet lending requirements for lenders. You will also often have to prove your creditworthiness through additional documentation like credit card statements and evidence that you are employed. Simply put, lenders will not hand out loans to people who they think are not going to pay them back, and having multiple debts can, unfortunately, leave that impression.

However, there are other options available to you in these instances. Filing bankruptcy is an alternative to consolidating debt that allows people to work towards a fresh start without the pressure of creditors breathing down their neck. That being said, filing for bankruptcy is an equally serious decision that should only be made after discussing your options with our lawyers. We can help you with your debt situation regardless of whether you choose to pursue debt consolidation or file for bankruptcy.