When an individual is struggling with debt coming from multiple directions, combining all debt onto one loan through consolidation might seem more manageable and like a sound decision — particularly when companies offer appealing promises of saving money while getting out of debt faster. Unfortunately, in many instances these companies are too good to be true. In New Jersey, individuals that offer debt consolidation services are required to be licensed by the New Jersey Department of Banking and Insurance. However, many providers of these services are not licensed, and are thereby acting criminally.

While getting assistance from a licensed debt consolidation service provider can be a viable option for individuals that find it difficult to pay bills on time due to juggling varying due dates, it is not a magic solution. Debt consolidation often translates to paying more in interest, and the risks associated with missing a payment can be far more severe.

Unless an individual is absolutely sure that after consolidating their debt they will be able to make every monthly payment, borrowing against a house, taking out a personal loan or transferring debt to another credit card present highly risky options. If an individual worries that there could be difficulties in meeting monthly payments following consolidating debt, there are alternatives.

Particularly for individuals that do not have good credit, speaking with a professional will be critical in ensuring a financially sound and manageable decision is made. An experienced attorney can assist an individual in New Jersey struggling with debt understand if consumer bankruptcy would be a better option for their financial health.

There are pros and cons to both debt consolidation and bankruptcy. Seeking an experienced legal attorney well versed in these matters that will be honest in discussing these options and their ramifications is crucial. While debt can feel endless and overwhelming, there are options and there is help. Speaking with a bankruptcy attorney can be the first step to finding a real solution to financial difficulties.

Source: KLTV, “Eight facts about debt consolidation,” Andrew Housser, March 25, 2013

  • Our firm has experience assisting individuals in New Jersey understand available options for confronting debt. For more information, please refer to our page on debt consolidation.