With debt relief in St. Charles, MO, all of a person’s bills are combined into one manageable monthly payment. By combining bills, the overall interest and monthly payment can be decreased. In most cases, one must work with a debt help company or lawyer to manage debt this way. Various types of debts can be consolidated, including unsecured types such as credit card debt, medical bills, taxes, and student loans. Secured debts such as mortgages, however, cannot be consolidated. In this article, readers can browse this website to learn about the two main types of debt consolidation.
Debt Consolidation Loans
With a debt consolidation loan, all of a borrower’s debts are combined into one loan. By consolidating debt in this way, a person can reduce their overall interest rate and pay less each month. Debt consolidation loans are a good way to stop creditor harassment, and they can help some borrowers avoid bankruptcy. However, this debt consolidation type requires one to own a home that they can use as collateral for the loan.
Debt Management Plans
In a debt management plan, a debt relief lawyer or company negotiates with creditors. In the plan, the debtor details when and how they will pay their creditors. By adhering to the plan, one’s monthly payments can decrease and borrowers can eventually pay the debt completely. This debt consolidation method can also put a stop to creditor harassment, and home ownership is not a requirement.
The Pros and Cons of Debt Relief
There’s one readily evident advantage to debt relief in St. Charles, MO: a lower, single payment that’s easily made each month. Most debts are settled for much less than is owed, which can save one a substantial amount of money in the end. However, debt settlement should only be used by those whose credit is already poor. If not, the person’s credit score and history will suffer long-lasting damage.
Does a Debtor Need to Hire an Attorney to Obtain Relief?
Understanding state finance and debt laws can be difficult. An attorney with the Law Offices of Steven K. Brown can help one understand the legal issues they may face during the process, and they may be able to use their experience to help the debtor deal with creditors fairly.