According to the Federal Reserve Bank of New York, Americans are racking up more debt than ever before, averaging close to $60K per person. This encompasses student loans, credit cards, auto loans, and mortgage loans.
Each Illinois resident nets around $6,000 for student loans, $3,500 for credit cards, $4,700 for auto loans, and $30,000 for mortgage loans. These numbers are also the highest for the 40-49 age group, so debt isn’t necessarily going away as you get older.
If you have credit cards or student loans with higher interest rates for example, then debt consolidation may be a solution to repaying your debts in a simplified manner.
How Does Debt Consolidation Work?
Debt consolidation combines two or multiple debts into a single debt, making it so that the borrower pays one single payment instead of paying each debt separately. With a good credit score, you can have a lower interest rate with a fixed repayment schedule.
The Ugly Truths about Debt Consolidation
Sadly, many debt consolidation and settlement agencies, companies, and plans are fraudulent. Even The Federal Trade Commission (FTC) and the Illinois Attorney General have warned consumers about these scams.
Debt consolidation scams often have high hidden fees, longer timeframes for repayment, no guarantees for getting you out of debt, and hurt your credit in the long run.
There are 5 key considerations you should take into account before you consolidate your debt.
- Debt consolidation companies may mislead you with promises to significantly lower your debt amount or tell you to stop paying your bills after enrolling.
- Get the details in writing. It helps when comparing other offers and protecting yourself from a financial nightmare.
- While you are saving your money after you default, the debt consolidation interest accrues on your credit card debt at the default rate.
- In the typical debt settlement program, credit card companies will sue you and get judgments against you once you stop paying them.
- When credit cards get judgments against you, they will attack your bank accounts and garnish your wages.
Speak with an Experienced Debt Consolidation Lawyer
If you have been misled or scammed by a debt settlement firm or a debt management company, LakeLaw will sue them to recover your losses.
Not all debt consolidation attorneys in Chicago have the experience required to handle these cases effectively. When you turn to LakeLaw, you will find an experienced debt consolidation attorney who can help you make the right choices so you can move forward with a better financial future on the horizon.
Request a Free Consultation
Speak with a real lawyer – not a bot or assistant. Your information is secured and strictly confidential. Make sure to only include details about your case that you wish to share with us.
Note: All form fields must be filled out in order for your message to be sent.