You’ve probably heard or seen advertisements featuring buzzword phrases
such as “Don’t let credit card companies trick you into thinking
you have to pay all your debt back!” and “Consolidate your
debts into one low monthly payment!” While these promises may sound
great, they’re like almost any other deal that sounds too good to
be true: odds are it’s probably not true at all. In fact, those
who rely on these debt consolidation companies can find themselves in
worse situations than before, both in terms of their credit score and
their financial affairs. Here are some reasons to beware of debt consolidation
companies and instead go a more traditional route when struggling with
What is Debt Consolidation?
Debt consolidation is about as simple as it sounds: combining your various
credit card or student loans debts into one large debt that you make a
single payment on every month until it’s paid off. This gives you
a more predictable single payment that takes care of all of your consolidated
debts at once, and helps you avoid the negative consequences of having
bankruptcy and discharged debts on your financial history.
What Consolidation Companies Do
Debt consolidation companies essentially become negotiators on your behalf
and work with your creditors to develop a consolidation plan that gives
you the single payment. You simply submit a list of your debts, the company
contacts your creditors, negotiates with them, creates the plan, then
charges you a fee each month. Some also charge a setup fee.
However, in the long run, these companies may not actually be saving you
that much money, and in fact you might be paying a lot more for the same
debt. There’s no guarantee that a debt consolidation company will
absolve you of any portion of your debt. While they might claim you may
only have to pay a portion of what you owe, they are under no obligation
to try to reduce your debt whatsoever. Instead, these companies simply
lump all your debts together and extend the duration of your loan in order
to decrease the amount you have to pay each month. Over time, between
the interest and service fees you’re paying plus the longer life
of the loan, you may wind up paying
more for your debt.
And to make matters worse, if your sued, a debt consolidation company cannot
defend you in court or provide any legal guidance.
Instead, let a New York debt relief attorney work with you to consolidate
your debts, and in the long run you’ll find you may actually save
money and give yourself a better chance of
getting out of debt.
Debt Consolidation Lawyers - NY & NJ
Regardless of whether your issues are with defaulted credit card accounts,
medical bills, timeshare debts, cash advances, or if you're in need of a
student loan debt consolidation, count on our experienced legal team to help you compare your options
and arrive at the best course of action. We understand the stress of having
debt collectors calling and sending letters, and work strategically to
help achieve a resolution within our client's budget.
Call the Law Office of Simon Goldenberg, PLLC today at 347-389-0245 and
request a case evaluation!