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Debt Consolidation- What You Need to Know!

Debt consolidation is a way to refinance your debt by taking out one loan in order to pay off many others

The process of debt consolidation involves housing many outstanding debts under one loan. It can help to secure a lower interest rate for all of your debt with the ease of making just one payment because now it is only one larger loan. Debt is money owed by you (the debtor) to a second party (the creditor). It is often subject to interest accrued on the debt. Interest is the fee charged by a creditor as a result of lending out this money or credit. Much of consumer debt, especially debt with very high interest rates, is repaid by a single new loan. This is debt consolidation. A lower interest rate is a major advantage of debt consolidation.

Unfortunately, there aren’t many legitimate debt consolidation organizations. Only one credit counseling firm is approved by the National Foundation for Credit Counseling in New Mexico. This organization does not advertise on radio, television or web ads. But we’ve all seen and heard the ads of other debt consolidation companies. Many of those are scams and not legitimate sources. They are profit-making industries that do not benefit by your repayment of such debt. They make money by keeping you in debt. They will also try to scare you and prevent you from filing bankruptcy. These companies make money by owning your debt with large fees attached to it. They also lose money if you do file bankruptcy. If you desperately want to try to avoid bankruptcy, use Consumer Credit Counseling Service. They are a government program designed to provide, you the consumer, advice and education regarding your debt. You run the risk being a victim of a scam if you call any of the debt consolidation ads. If it sounds too good to be true, it probably is. This especially applies to debt consolidation companies.

In some cases, bankruptcy may be your only option. Visit an experienced bankruptcy attorney, to learn about your options. As bankruptcy lawyers, the New Mexico bankruptcy practice of Don Harris often meets people after it is “too late”. Many people have come to his firm after they have spent thousands of dollars on a fraudulent payment plan. Only an experienced bankruptcy attorney can tell you if it’s really “too late.” Don Harris is one of those attorneys. Before you call a debt consolidation firm, schedule a consultation with him today.

Read more on avoiding debt consolidation & settlement scams.

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New Mexico Financial Law, PC

320 Gold Ave, SW
Suite 1401
Albuquerque, NM 87102

(505) 503-1637

IMPORTANT: Free consultations only apply for Chapter 7 and Chapter 13 bankruptcy, or similar.