Refinancing Debt

Refinancing Debt

“Refinance” is a word heard a lot these days around the offices of Detroit bankruptcy lawyers, with the interest rates in ARMs skyrocketing. Credit card companies glean a good deal of their business from debt consolidation offers and balance transfers. Refinancing is a way to make the equity you have in your home work for you and a way to reduce the interest on credit cards. But, the information offered by these companies can be confusing and the prospect of entering yet another credit agreement daunting.

Detroit bankruptcy lawyers offer these guidelines for refinancing:

Your Home

If you can refinance your home for the same amount of time left on your original mortgage or a lower interest rate and without overwhelming additional fees, then do it. If you have a bank loan and can refinance with another bank loan with all of the above conditions included, then do it. If you can refinance your home for substantially less than its market value and come out with substantial cash to apply in other areas, then do it.

Your Credit Cards

If you can refinance your credit card balances for a lower interest rate and have all the other terms of the loan are comparable, then do it. If you are not in default in your mortgage or in financial trouble and a refinance on your home to pay off high interest credit card debt has tax advantages, a lower interest rate on the mortgage and the loan is for the same of less than the length of time left on the original loan, then do it. A word of warning though, DO NOT refinance your home solely to pay off credit card debt unless there are advantages for the cost of the mortgage as well. If you can transfer your credit card debt to another company for less interest and no fees associated with the transfer, then do it.

And, some “don’ts” from Detroit bankruptcy lawyers:

Don’t let a tenacious creditor talk you into refinancing solely to satisfy their debt. These folks are trained in the arts of intimidation and they’re very good at it. However, their parent company is often reluctant to pursue debt through the court system and they’re left only left with the option to intimidate. This debt can be negotiated better through a credit counselor or by contacting the debtor directly.

Don’t refinance your credit card debit with a loan you have secured with tangible property, such as your home or vehicles. You may be putting these previously unencumbered assets into jeopardy if you have to default on the credit card balances or declare bankruptcy.

For experienced, knowledgeable and trustworthy bankruptcy assistance, contact the attorneys from Call toll-free 800-260-1402 today for your initial free consultation or come into one of their 100 offices across the country.

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