Debt Consolidation Texas, Credit Counseling Texas, and Debt Relief Texas Consultations are free of charge with no obligation. Credit counseling clients generally obtain interest rates between 6% to 11%. Debt Negotiation clients who make monthly program payments generally experience an approximate 50% reduction of their enrolled balance before fees, or a 35-45% reduction after payment of settlement fees over a 24-48 month period. Individual results may vary based on ability to save sufficient funds, ability to complete the program and the creditors enrolled. Statements made are examples of past performance and are not intended to be a guarantee that your debt balances will be lowered by a specific amount or percentage, that you will be debt-free within a specific time period. Settlement fees are not charged until a debt is reduced and payment has been made to creditor. We do not assume consumer debt, make monthly payments to creditors, provide tax, bankruptcy, accounting, or legal advice. We do not provide credit repair services. Optional separate legal services may be offered by affiliated attorneys and any attorney fees are separate from those charged by Debt Redemption Inc. Please contact a tax professional to discuss any possible tax consequences of paying less than the full balance. Programs available in Texas. Logos used are property of their respective owners.
Debt consolidation Texas combines all of your debt into one debt. Instead of paying multiple creditors, you would pay one—your consolidator or lender. The lender pays off your debt, and you pay back your lender for the debt amount at a different interest rate.
Debt consolidation San Antonio generally takes the debt you owe to a number of creditors and replaces it with one, lump sum debt, owed to a single creditor. Debt consolidators “pay off” your debt, and then offer you one payment at a new interest rate through a consolidation loan. So instead of paying several creditors throughout the month, each with their own interest rate, you pay one bill to the consolidator.
Debt consolidation San Antonio Texas is often confused with debt settlement, because both generally involve consolidation. Debt consolidation consolidates your debt, whereas debt settlement involves a single monthly program payment. The former removes your old creditors and interest rates from the equation, while the latter keeps them in place. Both methods of debt management will reduce the number of different payments you make throughout the month.
Generally, the difference between secure and unsecure debt is collateral. Unsecured debt is not backed by collateral. If you fail to pay back unsecured debt, the creditor has nothing to take from you to recover the cost of non-payment. Basically, the only thing they have is your promise to pay it back. That’s not to say there aren’t consequences for not paying unsecured debt, that’s just to say that not paying unsecured debt won’t leave you without a home. The same can’t be said for failure to pay on secured debt.
Secured debt is backed by collateral–some type of asset like a home or vehicle. Failure to pay a mortgage can result in foreclosure, failure to pay a car loan can result in repossession of the vehicle. Because the lender can recoup the cost of non-payment through foreclosure or repossession, interest rates for secure debt consolidation loans are typically lower.
Did you know that debt comes in two types: secure and unsecure?
Debt comes in two types: secure and unsecure. Secure debt involves some form of collateral, like a house or a car. Unsecure debt includes medical debt, credit card debt, and some loans. In most cases, a debt consolidator will require collateral before your debt can be consolidated. It’s important to know that tying collateral into a consolidation can put that collateral at risk if you fail to make payments. As a homeowner, you can refinance your mortgage and use the equity from your home to help pay down debt through consolidation. When you collateralize your home, or car, you agree to the forced sale of that collateral to pay back the loan if you stop making payments.
The benefit of having collateral is you can often get a lower interest rate–depending on the value of the collateral of course. In a down economy, lenders are generally more willing to make consolidation loans to those that can offer more than just a promise to pay the money back. Each case is unique however, just because you have a home or multiple vehicles as collateral doesn’t mean you will get the lowest available rate.
It is possible to get an unsecured debt consolidation loan, but it requires good credit history, verifiable employment and a relatively low debt to income ratio. Some lenders even require a minimum credit score. There are a number of lenders out there offering consolidation services, and some have higher requirements than others. If you have a great credit score, an unsecured debt consolidation loan could result in a lower interest rate. Be wary of lenders that will approve anyone, no matter their credit history. Those consolidation loans often come with a high interest rate, which can lead to much more debt over time.
IS DEBT CONSOLIDATION RIGHT FOR YOU?
Debt consolidation San Antonio Texas is not right for everyone. The circumstances surrounding your debt are unique, as is your debt solution. If you have good credit and/or collateral, and you’re confident you can make your monthly payments, consolidation could be right for you. The benefits of consolidation include a possible lower interest rate, one simple payment to one creditor, and the possibility to pay less over time thanks to that lower interest rate.
There are some risks to Debt consolidation San Antonio Texas, and you should definitely consider those before getting involved with a lender—you cannot un-consolidate your debt. If you tie in collateral, and you fail to make payments, you could lose that collateral, and your credit score could take a big hit. If your only option is unsecured debt consolidation San Antonio Texas, and you don’t have a good credit score, your consolidated interest rate could be as high, or higher than some of the interest rates you’re currently paying.
Remember, there are a variety of consolidation services available, so you may have to search to find the one that’s right for you. There are a number of other ways to manage your debt that don’t involve consolidation. Call today and talk to a debt specialist to learn about other debt solutions, like debt settlement, debt counseling and more.
Let’s say you owe $5,000 on three different credit cards, each with different interest rates. If you got a secured consolidation from your bank for $15,000, you could lock in a lower interest rate, or a rate that averages the three debts into something ultimately lower. For instance, your three cards could be at 24, 19 and 26 percent, and the bank could offer you an interest rate of 20 percent, or maybe even something lower. Depending on the amount of time it takes you to pay your bank back, as well as the size of each payment, you could end up paying less than what you owed because of the lower interest, but only slightly—your overall debt amount will likely remain the same.
Now bump up those totals by $5,000 each. Now you owe $30,000 across three credit cards and your interest rates are the same as above. This time, you can’t get a secure consolidation—either your credit score is too low, or you don’t have enough home equity. You manage to get an unsecure consolidation, but the interest rate is higher, 25 percent. The consolidator eases the sting of higher interest by offering lower payments. That rate may still be lower than some of your credit card rates, and you may even pay less, but if it takes you longer to pay off your consolidated loan, you’ll end up paying more over time.
Many banks offer consolidation loans and services like debtredemption.com or affordabledebtconsolidation.org. There are also a large number of independent loan consolidation and debt management services, most of which are regulated. Because consolidation is essentially replacing one debt with another, make sure the lender you choose is reputable.
Millions of Texans struggle to pay high-interest credit card debt and personal loans. How can Texans know which debt relief or debt consolidation company to trust? One word of advice is to start locally. Debt Redemption is a debt management agency with offices in Texas for nearly 20 years. The company provides a free phone or office consultations and can provide multiple types of programs to help manage and eliminate debt. Jack Brandon is a Debt Specialist at Debt Redemption. He says you should be wary of out-of-state companies because some charge excessive and often illegal fees.
“Unfortunately, we sometimes clean up the mess that non-reputable out-of-state companies put people in before they realize we are here to help them locally. They prey on Texans and are sometimes quick to take their money without providing much help” says Jack Brandon of Debt Redemption, who works at the Debt Redemption headquarters in San Antonio, Texas.
Some programs are designed to achieve interest rate reductions and resolve debt in 5 to 7 years. Other programs negotiate principal balances and may resolve the debt for less than what is owed in as little as 24 to 48 months. It is imperative to choose a trustworthy company to handle either type of service. Some people enroll in debt relief programs but don’t realize for 2 or 3 years down the road that they are not actually getting the help they were promised.
You can check with the Texas Office of Consumer Credit Commissioner at occc.texas.gov to see if a company is properly registered to provide debt management services in Texas. Some companies are breaking the law by enrolling Texans into illegal programs.
The Better Business Bureau is a great resource, and companies cannot hide Better Business Bureau complaints. Type in the company name at bbb.org for more information on any company.
Debt Redemption Texas Debt Relief specializes in providing affordable options for people Texas who are struggling with $20,000, $50,000, or even $100,000 or more of high-interest credit card debt or personal loans. Debt Redemption also has special local resources they have never seen an out-of-state debt relief company offer. For a free and no-obligation phone or office consultation, call or text 800-971-4060 or visit debtredemption.com
A: Consolidating your debt could have the following benefits:
Debt consolidation Texas is not without its risks. Many lenders require collateral, like a home or car, before they’ll offer you a loan. Home mortgages and some car loans are considered secure debt, and you can leverage those things as collateral to get a loan. This can be dangerous if you can’t make payments, as putting your home up as collateral means you agree to the forced sale (foreclosure) of your home if you can’t keep up. The same would go for vehicles, or any other collateral.
It is possible to receive a consolidation loan without collateral. If you don’t have collateral, reputable lenders will need to see a good credit score, verifiable employment, and good credit and payment history. With a good enough credit score, it’s still possible to receive a relatively low interest rate on your consolidation loan. Watch out for lenders that say credit isn’t a problem, or that they’ll lend to anyone. Interest rates on those loans are often far above average. A high interest rate could result in more money paid over time.
No matter where you may live, dealing with overwhelming debt is not easy. Not only can the debt cause stress, which may lead to health issues, but it can affect your financial future for many years if not resolved. Many Texans do not realize that Texas has consumer protection laws to help protect people in debt. We will explain options to deal with high-interest credit card debt and personal loans such as debt consolidation with credit counseling and debt settlement. But first, let’s understand a little bit more about the consumer protections in Texas.
There are two primary protections Texans have that most other states do not provide for their residents. The first is the inability of normal lenders to garnish wages of Texas residents. This exemption does not apply to government-backed debts such as federal student loans and taxes. It also does not apply to court-ordered debts such as alimony and child support. But what it means is that normal lenders such as banks issuing credit cards and personal loans cannot garnish your wages, even after successfully filing a lawsuit and obtaining a judgment against you. In most other states, if you do not pay a judgment, the lender can take a percentage of your monthly income by forcing your employer to pay a set amount monthly to the creditor. However, this does not mean the lender cannot attempt to collect a judgment in the Loan Star State. If you continue to deposit money into a checking or savings account after the lender obtains a judgment, the lender will be able to take it from your bank account with no warning in Texas.
The second significant protection afforded to Texans in combat against non-government related debt is our 100% homestead exemption. A typical creditor cannot force you to sell your homesteaded primary residence to pay the debt. Your homestead can be up to 10 acres urban property (single or family) and up to 100 acres rural (single) and 200 acres (family). Also protected are household items, up to $30,000 for a single person and $60,000 for a family. Up to one vehicle for each licensed driver in the house is also protected. Second homes and vacation homes do not have this protection, and creditors may be able to auction them to pay debts if they hold a court-ordered judgment. Creditors may attempt to put a lien on homestead property in hopes of getting paid when you eventually decide to sell it. Still, an attorney may remove the lien so that it does not require payment during escrow. Please keep in mind this article is intended only for general information and may not be construed as any form of legal advice. For legal advice, consultation with a qualified attorney will be necessary
Additional protections afforded to Texas residents is the Texas Finance Code. Any USA resident is protected by the Fair Debt Collection Practices Act (FDCPA), but the federal protections only extend to 3rd party debt collectors and not your original creditors such as a bank who issues a credit card or line of credit. The Texas Finance Code offers a much higher level of protection for Texans by extending by making creditor harassment potentially illegal for original creditors, in addition to 3rd party debt collectors.
The above protections do not mean that you should ignore your debt problems. If you have fallen behind paying credit cards or unsecured installment loans, it is much better to act before reaching the point of creditors filing lawsuits. There are some debt relief options to consider, including traditional credit counseling debt management plans, debt settlement (also referred to as debt negotiation), and bankruptcy. The first option to consider is a traditional credit counseling debt management plan. These programs may work well to consolidate debt if most of your debt is with credit cards, and you are no more than six months delinquent. Debt consolidation with credit counseling does not give you any reduction in your principal balances but provides an interest rate usually between 7 to 11 percent. The lower interest rates could provide a monthly cost less than making minimum payments to your credit cards directly. Another advantage that the programs could be 5 to 7 years in length, which is a much shorter time compared to making minimum payments.
Debt settlement or debt negotiation is another option to consider if you are struggling with debt. These programs negotiate reductions in your principal balances and may provide a monthly cost that is much lower than traditional credit counseling. These programs are usually estimated between 2 to 4 years, so they have the potential to help you become debt-free faster and start re-establishing your credit more quickly. Debt settlement programs also can enroll more types of installment loans, including extremely high-interest predatory loans that credit counseling is unable to assist with.
Bankruptcy is another option to consider. A successful chapter 7 bankruptcy may be able to wipe out all unsecured debts in a little as 90 days. It is not always possible to qualify for a chapter 7 if there is enough income or assets to pay back some or all the debts determined by the bankruptcy court. In such cases, the only type of bankruptcy available could be a chapter 13 repayment plan. The amount paid back to creditors in chapter 13 could be more or less compared to a debt settlement plan. Most people consider bankruptcy as a last resort, and it could affect future employment. Bankruptcy may be public record for the rest of your life, so it could have long-term consequences even after it no longer shows on a credit report. If you are considering bankruptcy, it is essential to speak with a qualified bankruptcy attorney.
Debt Redemption Texas Debt Relief can assist Texans with both traditional credit counseling and debt settlement programs. Being a Texas-based company which only focuses on Debt Relief in Texas, they have additional resources to help utilize protections afforded by the generous consumer protection laws. If you are considering debt consolidation, debt relief, debt settlement, or debt negotiation in Texas, call 800-971-4060 or visit https://debtredemption.com for more information. Phone and office consultations are free with no obligation.
Actually no. Although it’s preferable to not have any debt, not all debt is bad. Good debt is debt from something that appreciates in value. In most cases a mortgage loan and student loans are considered good debt, because homes can increase in value, and student loans usually mean you have a higher degree, which makes you a more valuable employee. Having good debt can help you build wealth and a good credit score. Bad debt is debt that depreciates in value. Going into debt for disposable items like clothing or groceries with credit cards could negatively impact your credit score.
Some debt—certain private loans or secured loans—cannot be consolidated. Sometimes debt can be consolidated within a lender, but cannot be consolidated with debt from another lender. That’s why it’s important to talk to a debt specialist before consolidating your debt. They can help you determine what can and cannot be consolidated, or if consolidation is even right for you.