Posted on
July 6, 2009
at
2:58 pm
The most common forms of debt consolidation (in no particular order): 1) Unsecured debt consolidation loan. 2) Secured debt consolidation loan (home equity loan). 3) Credit counseling. 4) Debt settlement. 5) Chapter 13 Bankruptcy.
Posted on
July 6, 2009
at
4:35 pm
How is Chapter 13 Bankruptcy a form of debt consolidation? I thought you don't have to pay back your debts if you file bankruptcy?
Posted on
July 6, 2009
at
4:42 pm
In a Chapter 13 bankruptcy, the debtor makes one monthly payment to a court appointed trustee who in turn disperses payments to each of the owed creditors. Since the debtor is only making one monthly payment, in essence the multiple payments the person was once making have been "consolidated." Typically debts can be eliminated, or "discharged", in a Chapter 7 Bankruptcy. This will happen after the debtor has liquidated all non-exempt property to satisfy a portion or (at times) all of the owed amounts. It is very rare that any debts are discharged in a Chapter 13- most cases end up with the debtor paying back the full debt amount. It is a very similar repayment structure to that of credit counseling.
Posted on
July 7, 2009
at
2:14 am
what if I go for home equity? would that be a good deal for me?
Posted on
July 7, 2009
at
4:27 am
A home equity loan may entail putting up your home as security for a debt. While it may be advantageous on certain aspects because the funds are readily available and the interest rate is lower than the typical loan available in the market, once you default on this particular loan, your home may be at stake. It's quite risky but if you think you can manage the payments, by all means, go ahead.
Posted on
July 7, 2009
at
5:02 am
how much can i get out of my home's equity? and what are the interest rates?
Posted on
July 7, 2009
at
5:23 am
Your lender may start with a percentage of your home's market value--varying from 50-80%--and deduct the amount that you still owe from your mortgage. Aside from that they may also consider some factors like your other expenses, credit history, and total income. All in all these can determine how much the lender will give you or if they would even grant you the loan at all.
