Managing debt during the pandemic
Many Americans have returned to high credit card spending. According to a September 2021 WalletHub study, Texas ranks second behind California with the highest increase in credit card debt during the pandemic. This increase is partly due to the rising cost of living caused by inflation and transportation issues that impact the movement of goods. While some Texas residents have a plan in place to pay off that extra debt, some are struggling to make the minimum payments. Worse still, some have fallen behind and are facing aggressive debt collections.
Texas Debt Redemption Texas Debt Relief explains options for dealing with crippling credit card debt.
Debt consolidation loans:
If you have excellent credit and a good debt-to-equity ratio, consider a debt consolidation loan to pay off high-interest credit card debt. It is recommended that you start with your local bank or credit union where you deposit your earnings, as the institution should be the most familiar with your situation. However, if you don’t have a high credit score, this may not be an option. Lenders want to minimize their risk when accepting a large unsecured loan. Depending on your institution’s requirements, paying off the credit card debt balance may be a condition of the new loan. Regardless of whether it’s necessary, it’s important to change your spending habits, so you don’t end up with more debt than you can afford to pay off.
Home Equity Loans:
While that was impossible for many homeowners just a year or two ago, recent house price increases have unlocked available equity in many Texas homes. Texas law only allows homeowners to withdraw equity up to 80% of the home’s value. Before the recent price increases, most homeowners who bought their homes in the last few years had no equity to use. But with many home prices in Texas currently at 20% or more than just two years ago, there is now equity that can be used to pay off high-interest debt.
As with unsecured debt consolidation loans, it is important not to continue spending habits that have accumulated credit card debt. Also, consider that transferring unsecured debt to your home may put your home at additional risk of foreclosure if you cannot pay the mortgage at some point. Credit card debt is unsecured, so unlike a mortgage, there is no collateral to seize or repossess.
Credit counseling Debt management:
If you can’t qualify for a debt consolidation loan, these programs can lower interest rates with your existing credit cards and select personal loans without having to take on new debt. You will also have the option of making only one payment per month. It is essential to understand that this is a hardship program, so you will not be able to continue charging your cards, and this may impact your credit scores during the program. However, if you’re using a hardship program, you probably can’t afford to take on any additional debt in the first place.
Debt relief with debt settlement:
If you are about to fall behind with your debt or have already fallen behind, this program can save you the most money and settle your debt in the shortest time without bankruptcy. Rather than simply lowering your interest rates, debts are negotiated and settled for less than the balances due. Unlike credit counselors, payments are not made monthly to your creditors. Instead, the money accumulates in a special purpose account, and the debts are negotiated and settled one by one under a schedule generally estimated between 24 and 48 months. Depending on your budget and estimated program length, your monthly cost can often be less than half of minimum credit card payments. If you have made monthly payments and have a good credit rating, not making monthly payments will negatively affect your credit rating. However, your debt-to-income ratio probably has a big impact on your financial situation, even if you have good credit scores. Once your debt is settled, you can quickly begin to rebuild your credit scores. You might even have a lot more borrowing power once the debt-to-income ratio is improved by resolving the debt. Debt Redemption Texas Debt Relief can also help Texans who have been sued by a creditor or collection agency.
For some people in serious financial difficulty, bankruptcy may be the only way out. But some people who file have non-exempt assets or their income exceeds the Chapter 7 threshold, so they may not be able to pay their Chapter 7 debt. In these cases, a plan Chapter 13 repayment may be the only option. Chapter 13 could be more expensive than debt negotiation in some cases and less expensive than in others. If you are thinking of going bankrupt, you should seek advice
of a Texas bankruptcy attorney. Debt Redemption Texas Debt Relief cannot provide legal advice, but can refer you to a very experienced Texas bankruptcy law firm for a free consultation.
Debt Redemption Texas Debt Relief is a Texas-based company serving exclusively Texans. Our Texas Debt Specialists have the resources to help you purchase a debt consolidation loan from many lenders who offer Texas loans, credit counseling, debt negotiations and attorney referrals. bankruptcy specialists in Texas. Our company is 100% veteran-owned, state-licensed, and helping Texans for nearly two decades. Plus, our debt negotiation fees are typically 20-40% LESS compared to out-of-state firms. Check out our high rating with the Better Business Bureau and speak to one of our Texas Debt Specialists by calling 800-971-4060 or visit https://debtredemption.com . Telephone and in-office consultations are free and without obligation.