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What is debt consolidation?

 

Thousands of Spanish families have debts and suffer for not being able to pay them. We know it firsthand. However, there is a great lack of information for the citizens of the country. For this reason, as experts in claims and cancellation of debts we have thought it is important that you know the legal tools at your disposal. We present the consolidation of debts. How to use debt consolidation?

The consolidation of debts

First, we will clarify what debt consolidation is and how it is used. Consolidate debts is, in other words, collect all the debts in one. In other words, a total loan that uses your mortgaged assets as an endorsement. This type of redistribution is very usual for families that will bear more expenses in a short period of time. Thus, they can assume, for example, the acquisition of a family car or a better education for their children. In this way, the debt is not canceled but transferred to a total amount.

A debt consolidation is not competent for all your situations. Therefore, we must analyze the advantages that can have taking our needs as a reference. Do you need to decrease and manage your monthly payments over time? The consolidation of debts will be a good answer. On the other hand, the total debt will be higher in a longer period of time. For example, this system is usually used to collect debts from credit cards.

Virtues of debt consolidation

  • Administration of several payments in a single monthly payment.
  • Decrease in the amount of interest to be paid.
  • Relief in short-term family accounts.
  • Possibility of investment.
  • Draw fines and inclusion in a list of defaulters .
  • Decrease in monthly payments.
  • Long-term funds.

Disadvantages of debt consolidation 

  • Increase in total bank debts. Possible charges for the transfer of debts from one account to another.
  • Increase in debt risk. For example, if you re-use the cards that you have consolidated you will have to face the new debt along with the consolidation.
  • Possible eviction from the home in case of not paying. The family situation can be unsustainable if you fail to pay the monthly fees for a period.
  • Relief in the short term, but it does not suppose the resolution of a big financial problem and it can get worse.

For all the above, we recommend that you contact experts. We are expert lawyers in banking law. We process debt consolidation, claims to banks and many other services such as claim for mortgage expenses, renegotiation of debts, and abusive clauses, among many others. We will analyze the causes of your debt and if the consolidation of debts is not your best option, we will propose the best solution for your bank debts. Consolidating your debts can be easier if you let us advise you. We are part of the network of partners of the Global Legal Area in all the provinces of Spain. Find your nearest office and we will get in touch . 

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