Before you can decide whether debt consolidation is the right financial move for you, it is important to understand exactly what you are getting into. We have discussed the benefits and risks of various debt consolidation methods before. Some of those benefits and risks are inherent to the type of debt consolidation you choose, whether it be a debt consolidation loan or a home equity loan, for example. However, there are some facts about debt consolidation that are important to know regardless of which debt consolidation method you are considering.
It is Important to Know Debt Consolidation Limitations
If you decide to consolidate your debt through a loan such as a home equity loan, a zero interest credit card or a debt consolidation loan, you should be aware that:
- Debt Consolidation Does Not Mean You are Debt Free and May Not Lower Your Debt. It simply means you are paying fewer creditors larger amounts of money.
- Debt Consolidation May not Fix Your Credit Problems. Simply consolidating your loans will not improve your credit score. However, a series of on-time payments may eventually help restore your credit.
It is as important to understand these limitations as it is to understand the benefits being advertised to you by a loan consolidation company, bank, or credit union.
It is Important to Contact a Minneapolis Debt Consolidation Lawyer for Help
If you are considering a debt consolidation loan, please contact an experienced Minneapolis debt consolidation attorney at MN (952) 920-1001 or AZ (480) 207-2203 to learn more about your rights and possible recovery. We also encourage you to read our FREE book, What You Need to Know About Filing Bankruptcy in Minnesota, to learn more about whether bankruptcy may be a good option for you.