Melissa Lyken | December 01, 2022
Summary: If you can't seem to make any progress on paying off your debt, debt consolidation might be the answer. Find out how debt consolidation works and if it's the right fit for you.
Despite Oregon featuring a growing economy, many residents struggle with debt. The average resident has $2,943 in personal debt, not including home mortgage and car loans. This goes some way to explaining the higher delinquency and default rates in Oregon than in other parts of the country, with 9,008 residents declaring bankruptcy every year.
Before declaring bankruptcy, you need to consider other options, including debt consolidation. Many debt consolidation firms have been set up to help residents regain financial control. Keep reading to learn how it works.
Debt consolidation is a debt management tool that allows a debtor to combine credit card debt and personal loans into a single loan with a lower interest rate. The idea is to enable the debtor to make a single monthly payment instead of multiple payments for a period of five to ten years. Debt consolidation in Oregon is ideal when:
Technically, its impossible to combine loans and merge them into a single payment. The loans have various providers and contractual terms. Debt consolidation requires the debtor to take out a new, larger loan to repay the smaller loans.
Debt consolidation plans are designed to pay unsecured debt, including credit card debt, credit lines, and personal loans. Other types of unsecured loans, including renovation loans, education loans, and business credit arent eligible.
Respond to debt collection lawsuits in 15 minutes with SoloSuit.
The first step is to understand how much you owe and your credit score to determine whether debt consolidation is the right option for you. A low credit score and high debt amount may disqualify you from a low-interest loan.
Next, categorize the debt into secured and unsecured debt. Secured debt comprises car loans and mortgages, while unsecured debt includes medical bills, credit cards, student loans, and
personal loans. When analyzing your debts take note of their interest rates and the monthly payments made. The figures will come in handy when planning your budget.
Debt consolidation works best for people with a regular income. Commission-based incomes make it difficult to determine the monthly payments that can be made to pay debts. You will want to use an average payslip that doesn't include overtime or paid-time-off to avoid making an unreasonable payment plan.
Also, include your spouses income if youre both responsible for paying the credit card debt and avoid adding alimony or child support payments because these funds aren't always reliable. Residents relying on Social Security Income should only consider alternative debt management options.
Your bank statements should help you calculate your monthly expenses. Some expenses like rent, car loans, and insurance hardly change, making it easy to trace them and allocate a fixed payment.
Use the statements to identify overspending; if you can reduce the amount spent on these expenses, you can pay off debt faster. Total up all the monthly payments and subtract the amount from your income to determine your disposable income.
If paying credit card debt, calculate the total amount of debt and divide it by the number of months you want to repay the loan over. If youre planning to repay the debt in five years, divide the total debt by 60 months and compare the result to your disposable income.
If you still have cash left over, debt consolidation is your best bet at paying off debt. Be sure to calculate your credit utilization score (total debt amount/credit limit), too, if youre taking out a debt consolidation loan. A credit utilization ratio of less than 30 helps to secure a low-interest loan.
Dont hide from your creditors. Use SoloSuit to file a response fast.
Banks and other financial institutions offer different debt consolidation options. They include:
Protect your assets by filing a response with SoloSuit.
You will want to avoid certain pitfalls that could extend the loan payment period or attract additional fees. Here are some tips:
When applying for a debt consolidation loan, be sure to look for a trustworthy lender. Some lenders in Oregon use aggressive sales tactics, duping debtors into applying for high-interest loans that take a long time to repay. Undertake adequate research before applying for the loan. If in doubt, consult a credit counseling agency or look for reputable organizations accredited by the Better Business Bureau.
SoloSuit makes it easy to respond to a debt collection lawsuit.
How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.
"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James
>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance
Here's a list of guides for other states.
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