Avoid Misleading Companies that Charge Interest to Consolidate Your Debt
When the Federal Reserve increases interest rates on lending to tamp down inflation, a chain reaction hits your wallet in a variety of ways, including an increase in interest rates on your credit cards. For example, with the most recent 25-point hike by the Fed in December 2022, APRs for credit card interest rates increased by .25%.
If you are already experiencing financial challenges due to credit card debt that you can’t pay, that seemingly small percentage adds up fast. You may find yourself unable to take care of your debt while it continues to grow. Unfortunately, there are debt consolidation companies that prey on your need to resolve your debt by offering to consolidate your debt with them, and – until you pay it off – your debt will also increase due to their interest rates on that loan. While this move may get you into a lower interest loan, it still entails you getting into more debt to fix the debt you already have. Depending on your financial situation, this can create a domino effect you can’t afford.
If you are considering a consolidation loan, you should think carefully about your ability to pay this loan in addition to your other debt and living expenses. If you cannot pay the loan, you should not take it.
Rather, you can stop your debt from accumulating if you go another route; you can work with premier debt settlement and bankruptcy lawyers near you. There’s no promise that interest rates won’t continue to rise, so the best solution will be to clear your debt as quickly and strategically cost-effective as possible by choosing among the best bankruptcy options in Denver. With Wink & Wink, Denver’s leading bankruptcy attorneys, you get the legal services you need to begin a brighter financial future.
Our Team of Bankruptcy Attorneys in Denver Weigh In: Debt Consolidation Is Not the Answer
Financial challenges can make us feel fearful. It is sad to recognize that debt consolidation companies know this and use this fear to lure people in debt into a solution that is often not in their best interest. Though the pressure from credit card companies can make you desperate for a solution, it is important to know what actually happens when you consolidate your debt.
A debt consolidation company may give you a new loan with an entirely new lender. When this happens, the new lender pays your current creditors and issues you a new loan with their own interest rate. Because of our current economic situation, this new interest rate may have the potential to climb higher in the near future. And even if you obtain a lower interest rate through the consolidated loan than you had with your credit cards, you’re still in debt – and a potentially high interest rate – when you opt for debt consolidation.
While getting all of your debt arranged in one place with a single, convenient bill might seem like it will give you peace of mind, this solution still requires you to pay debt. You still have to pay your other living expenses. You’ll also still be paying interest. And these factors may leave you unable to pay your debt, which can subject you to a potential lawsuit from the consolidated loan creditor if you are unable to pay.
Additionally, many loan consolidation companies actually do not consolidate your debt through a new loan. Rather, they start you in a debt settlement program without being honest about what this entails. Debt settlement can enable you to get out of debt for less than you owe. However, it entails risk. Because you have to stop paying your debt to settle for less than you owe, you run the risk of getting sued when you stop paying the debt. Debt consolidation companies offering debt settlement services rarely tell their customers of this risk. Instead, they make it sound like their customers are involved in a consolidation program with their creditors consent. Unless there is a new lender paying your existing debt, you are not consolidating debt, your debt is not getting paid, and your creditors are happy about it.
The risk of being duped into debt settlement by a company pretending to offer debt consolidation is compounded by another lie these companies often tell their customers. That lie involves the amount of time and money required to settle debt. Because of the risk of lawsuits, it is critical that you save enough money to settle debt before your creditors sue you. At Wink & Wink, our experience is that you’ll want to be able to save this money within two years of when you stop paying the creditors. Debt consolidation companies often tell you that you can save this money over 4 or 5 years. This leads you to think all your debt can be handled in an artificially low monthly payment. However, you don’t know this isn’t true until you get sued. Then, the entire ‘program’ sold to you by the debt consolidation company falls apart.
Because of the risks of using debt to pay debt or being misled by a debt consolidation company, discovering more cost-effective bankruptcy options in Denver is a far smarter choice than working with a misleading consolidation company. Our team of bankruptcy lawyers near you can offer debt settlement solutions that will actually help you, as opposed to relying on companies who prey on your uncertainty.
How to Solve Your Financial Challenges for Good with the Leading Bankruptcy Attorneys in Denver
A premier team of bankruptcy lawyers provide an effective solution designed to eliminate your debt, including credit card and medical debt. When you schedule a free consultation with our team, we customize a plan that addresses your particular situation.
In some cases, Chapter 7 or Chapter 13 bankruptcy is the most cost-effective solution that protects you from the climbing interest rates applied to your unpaid debt. Through bankruptcy, you can eliminate your debt completely without incurring additional interest.
In other cases, Wink & Wink can honestly guide you through the debt settlement process, which can result in only having to pay 50 percent of what you actually owe to your creditors. While debt consolidation companies fool people into debt settlement, it is often the best solution for people who are not good candidates for bankruptcy. Wink & Wink will be up front about the risks and money needed to settle debt. Our customers go into debt settlement with a complete understanding of what to expect and, as a result, will have a much better rate of success with their settlements. Additionally, Wink & Wink charges approximately half of what many debt consolidation companies charge for settlement.
We’re here to make sure you get a solution that is customized to your needs. Our bankruptcy lawyers near you offer a free consultation to help you get the expert legal support you need to take care of your debt.
Interest Rates Continue to Climb: Get In Touch with Our Team of Denver Bankruptcy Attorneys
Our team of bankruptcy lawyers will ensure that you are aware of the most beneficial bankruptcy options in Denver. We reject the misleading marketing that debt consolidation and national debt settlement companies use to lure in consumers who are uncertain about their financial futures.
Our team provides transparent, honest, experienced legal strategies that benefit you the most, and protect you from paying even more interest due to the fluctuations of our economy, including interest rate hikes.
Reach out to Wink & Wink’s team at (303) 410-1720, or send us a send us a message online. Our team of bankruptcy lawyers near you are here to make sure you find the help you need to overcome your financial challenges.