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If you are burdened with loan payments, medical bills, and other expenses, you likely crave an escape. As a result, you may wonder if debt consolidation is a valid solution. From their offices in Mobile, AL, the bankruptcy lawyers at Padgett & Robertson, Attorneys at Law explain debt consolidation and its alternatives to help people regain control of their financial lives.

Bankruptcy Lawyer Explains Debt Consolidation

How Debt Consolidation Works

In the debt consolidation process, a debtor takes out a loan large enough to cover other existing debts. The consolidation loan has repayment terms long enough to pay off the old debts. With this solution, debtors can write fewer checks each month, because several debts are combined into one payment.

The Associated Risks

lawyerDebt consolidation loans may have interest rates as high or higher than the debtor’s original loans, and the payment period may not be shorter. Debtors are also not protected from creditors filing suit or repossessing items if the loans are left unpaid. 

Bankruptcy as an Alternative

Individuals and couples who have substantial debt—including past due mortgage payments, car loans, and student loans—may want to file for Chapter 13 bankruptcy. In this case, they will work with a bankruptcy lawyer to develop a payment plan for the court to approve. Debtors are protected from all creditor actions while making reasonable payments over the course of three to five years. For debtors with large amounts of unsecured debt—such as credit cards and medical bills—Chapter 7 bankruptcy wipes out all the debt without repayment.

The dedicated bankruptcy lawyers at Padgett & Robertson, Attorneys at Law in Mobile, AL, are ready to serve you. Whether you want to discuss debt consolidation or bankruptcy, these attorneys provide wise counsel and professional, compassionate representation. Draw on their more than 35 years of legal experience to ease your financial hardship. Call (251) 342-0264 today to schedule a confidential appointment with a bankruptcy attorney. Visit them online or message them on Facebook now to schedule your free consultation.

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