Wisconsin debt consolidation, also known as bill consolidation, is a personal finance process where you pay off your debts by taking out a loan or borrowing from a line of credit. It is a form of debt refinancing that helps consumers address high consumer debts and avoid being trapped in the loop of endless debt.
Debt consolidation is a simple process that may not need the input of a financial expert. To start, you need to size up your debts, as consolidation may not work with all debt. This process works best for consumers with high-interest credit card debts and other unsecured debts. To proceed with consolidation, you will combine your multiple debts into a single monthly payment.
Debt consolidation in Wisconsin makes it easier for consumers to manage their debts by writing a single check every month. This helps them avoid penalties that result from skipped payments. Other than potentially reducing the interest on your debts, consolidation does little to cure your debt problems – you are simply transferring your debts, which means you still have bills to pay.
Wisconsin Debt Consolidation Options
You can consolidate debt by taking out a consolidation loan and using it to pay off all the debts you owe. Consumers can secure WI debt consolidation loans from banks, credit unions, and other lenders provided they have a good to fair credit score. Depending on your credit score, a lender can offer you a low-interest loan which could significantly reduce your repayment amount. However, you should be conscious of the loan period, as you may end up paying more in interest if you extend your repayment term.
Wisconsin consumers who carry multiple credit cards may also find themselves buried in a heap of credit card debt. Luckily, Wisconsin credit card debt relief options such as balance transfers offer a lifeline. Most credit card companies offer low or zero introductory rates on balance transfer credit cards, which could be a huge money-saver for consumers.
Balance transfers involve getting a low or zero-interest credit card and moving all your credit card balances to that card. This helps you make payments on one card that carries low or zero interest during the introductory period. You can settle your debts interest-free if you pay off all your credit card bills during the introductory period.
Homeowners struggling to bring down their consumer debts also have the option of taking out a Wisconsin debt consolidation loan or line of credit against the equity in their homes. If you have a large useable equity in your home, lenders could be willing to offer you a loan at a lower interest rate. However, securing a loan against your home could see you lose it if you default on payments.
Wisconsin Chapter 128 Debt Consolidation
Chapter 128 debt consolidation in Wisconsin is unlike bankruptcy or any other debt relief option. Under this program, you are allowed 36 months to pay off your high-interest unsecured debts such as credit card bills, medical bills, utility bills, and payday loans. You may not include debt such as mortgages and student loans in this program.
Wisconsin debt consolidation through this plan involves filing for Chapter 128 consolidation in a Wisconsin court and appointing a trustee through whom you will make payments. Filing for this plan in courts costs under $50 and can help a Wisconsin consumer navigate the murky waters of consumer debt with ease.
Chapter 128 debt consolidation protects consumers against wage garnishment, listing on print media, and levy of property for debt collection. Any consumer can opt into this plan, which begins by drafting and filing a Petition, Affidavit of Debts, and an Order Appointing Trustee and Enjoining Creditors. Consumers who sign up for this program should demonstrate that they can pay off their entire debt balance within 36 months.
Other Wisconsin Debt Relief Options
While Wisconsin debt consolidation is seen as the most practical debt relief option, it isn’t the only way to solve your consumer debt problems. Below, we discuss other ways to get debt relief in WI.
Many Wisconsin consumers carry debts that are beyond their ability to pay. Such consumers can use debt settlement to resolve their debt issues for good. Debt settlement lets you settle all your bills for less than you owe. Through negotiations with your creditors, you may be allowed to pay a portion of your debt in a single lump-sum payment while the rest of it is forgiven.
Debt settlement is an option for consumers who want to wipe out large debt amounts without filing for bankruptcy. Yet, it is not guaranteed that your creditors will agree to this arrangement. While debt settlement may help erase your debts, it is an option that will devastate your credit score.
The goal of credit counseling is to evaluate your financial situation. A credit counselor can help determine if you are in a critical financial situation or just need to reorganize your finances. Your credit counselor will present their analysis and action plan by analyzing the information about your incomes, assets, expenses, and what you owe. Besides advising you on how to handle your debts, a credit counselor can give you insights on how to hit other financial goals.
At the end of a credit counseling session, a counselor could recommend a debt management plan. Rather than execute their recommendation on your own, you leave the whole plan to them for execution. Debt management WI does not involve taking out a loan, and qualification is not dependent on your credit score. Also, you do not have to negotiate terms with your creditors when it comes to a debt management plan.
Nonprofit credit counseling agencies in Wisconsin offer debt management plans. Your credit counseling agency will reach out to your credit card companies and other creditors to draw up an affordable payment plan that may include lower interest rates.
Once a payment plan is in place, you begin making a single monthly payment to your agency. Adopting a debt management plan is reassuring to creditors as they know you have committed to a reliable payment plan.
Consumers swamped with insurmountable debt can turn to bankruptcy for a fresh financial start. Yet, filing for bankruptcy is not suitable for everyone. Among all Wisconsin debt solutions, filing for bankruptcy has the most damaging effect on your credit score. It appears on your credit report for up to 10 years, which makes it onerous to establish credit or apply for an auto or home loan.
While consumer spending is the backbone of an economy, too much spending could soon leave you struggling with debt. Wisconsin debt relief programs such as debt management and Wisconsin debt consolidation can help consumers emerge from debt and get a fresh financial start without damaging their credit score.
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