What To Do If You Are Too Broke To Consolidate Your Debt
If your financial situation is bad enough that you are considering filing for bankruptcy or are in danger of losing valuable assets, such as your house, then you have probably read enough consumer law firm websites to know that the main options for avoiding financial catastrophe are debt settlement, debt consolidation, and bankruptcy protection. If you do more research, however, you will find that none of those options is a panacea, and each of them has requirements. Being too broke to qualify for a debt consolidation loan is not a pleasant state of affairs, but an increasing number of people are in this situation, as prices keep rising and buy now pay later (BNPL) debts keep adding up. All of those unsolicited offers you receive in the mail, saying that you are pre-qualified for a personal loan worth tens of thousands of dollars might as well be taunting you about being broke; you probably don’t qualify for the interest rates advertised, and inquiry about it will only lower your credit score. To find out more about the possible alternatives to debt consolidation loans, contact a Boca Raton debt lawyer.
If Not Personal Loans, Then What?
An unsecured personal loan with a low interest rate is just what you need, if you can get one. These loans are excellent for paying off high-interest debts, which is why they are sometimes called debt consolidation loans. A debt consolidation loan can be the deus ex machina that stops you from defaulting on your medical bills or stops a home mortgage foreclosure in its tracks. As everyone who has considered contacting a debt lawyer knows, however, you have to have money to borrow money.
If you are unable to qualify for an unsecured personal loan, these are some other avenues you might try if you need to borrow thousands of dollars, or even tens of thousands, and pay the money back over a long period of time:
- Credit cards
- Home equity loans
- Home equity lines of credit
- Peer-to-peer loans
- Mortgage refinances
Of course, most of these options are only feasible if you own your home or already have a credit card account.
Are You Desperate Enough to Borrow Against Your Children’s Inheritance?
Other assets that can be a source of loans are retirement accounts and life insurance policies. If you are fortunate enough to have a retirement account, you can borrow up to 50 percent of its value as a loan. If you don’t pay it back, however, it counts as taxable income. Likewise, you can borrow against your life insurance policy, but if you don’t pay it back, then the payout amount that your estate receives, and by extension, that your heirs receive, will be less.
Work With a Debt Lawyer to Find Ways to Borrow Money and Repay It
A South Florida debt lawyer can help you if a debt consolidation loan would solve your debt problems, but such easy solutions are out of reach. Contact Nowack & Olson, PLLC in Boca Raton, Florida to discuss your case.