Debts that exceed your income and the value of your assets can cripple your finances. They put you at risk of wage garnishment, bank levies, and property seizures. No matter how much debt you have, discover the ways an insolvency trustee can help you consolidate this debt.
Debt Consolidation
When you use the services of an insolvency trustee, you can consolidate most or all of your debts into one lump sum. Instead of making individual payments to dozens of different creditors, you will instead make a single payment on the consolidated debt.
This payment goes to your insolvency trustee who then disperses that amount to your various creditors. As you continue to make this monthly payment, you progressively pay off your debts. You may find making a single payment more convenient and less worrisome than trying to remember if or when you paid each creditor.
Low or No Interest
Once you consolidate your debts, you can also stop incurring interest on your debts. Many insolvency trustees negotiate with creditors to stop charging interest on the amounts you owe. Rather than pay off costly interest with each consolidation payment, you instead put more money toward the principal debt. This benefit allows you to pay off your debts faster and easier.
Intercession with Creditors
An insolvency trustee can also act as your intercessor between you and your creditors. Instead of these companies contacting you for payments, they must go through your trustee. They could violate the terms of the consolidation contract if they contact you and demand payment for a debt you have consolidated.
Bankruptcy Filing
Your trustee can also advise you if you should file for bankruptcy. If your debts come to an amount that you cannot realistically pay off within a reasonable amount of time, they could justify filing for bankruptcy. Your trustee can help you with the legal process of filing for Chapter 7, which could liquidate most or all of the debts you owe.
Asset Protection
When you consolidate your debts, you also protect your assets. While receiving payments from your trustee, your creditors cannot levy your bank account, garnish your wages, or seize your assets. However, if you default on the payments or exit the contract with the trustee, you could put yourself at risk of these actions.
Financial Counseling
Finally, your insolvency trustee can provide you with financial counseling to help you avoid incurring such large debts in the future. You can learn better money management skills and set up a plan to save money.
You can also learn how to pay off debts faster so they do not accrue hefty interest and put your finances at risk. This tip can include paying off smaller debts first and then putting more money toward larger debts later.
These services are some that an insolvency trustee can help you with to consolidate and eliminate your debt. You can put all of your debts into one lump sum that you pay off progressively each month. You could avoid incurring interest and also gain an intercessor between you and your creditors.
