Thousands of citizens suffer from having debts and not being able to pay them. We have seen it firsthand. On the other hand, what bunds, is the lack of information easily accessible to the citizen. Therefore, as experts in banking law and debt negotiation, we want you to know the legal tools available. Today we want to present you the consolidation of debts.
In the first place, we will explain what the consolidation of debts consists of. Consolidating your debts is, in other words, grouping all your debts into one. That is a global credit that uses your mortgaged real estate as collateral or guarantee. This type of reunification is widely used by families who will bear extra expenses to be able to take on, for example, the purchase of a car or the education of their children. In this way, the debt is not canceled but transferred to a single amount.
The consolidation of debts is not suitable for all situations. Therefore, we must study the advantages it can have depending on our needs. If you need to reduce and manage your monthly payments over time, consolidating your debts is a good option. However, the total debt will be higher in a longer period of time. For example, this tool is used many times to group credit card debts.
Advantages of consolidating your debts
- Management of several payments in a single monthly payment
- Reduction of the amount of interest to be paid.
- Relief in short-term family accounts.
- Investment opportunity.
- Avoid fines and inclusion in a list of defaulters.
- Reduction of monthly payments.
- Long-term financing
Disadvantages of consolidating your debts
- 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 in case of non-payment.
- The family situation can be unsustainable if you fail to pay the monthly payments for a while.
- Relief in the short term, but does not solve a big financial problem and can make it worse.
For all the above, we recommend that you put yourself in the hands of experts. We are specialized lawyers in banking law. We make claims to banks, debt consolidation and many other services such as renegotiation of debts, claims for mortgage expenses and abusive clauses, among others. We will study 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.