Debt Consolidation | The UGLY TRUTH About Debt Consolidation

Debt consolidation is a form of debt refinancing that entails taking out one loan to pay off many others.

In this video, bankruptcy Attorney John Skiba describes what debt consolidation is, talks about debt settlement companies, and provides his opinion on what would be the correct way to do it.

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MORE ABOUT JOHN SKIBA
John Skiba is a bankruptcy & consumer protection attorney in the state of Arizona.

John helps clients with Chapter 7 bankruptcy and Chapter 13 bankruptcy for Arizona residents.

🌵🌵🌵🌵🌵 ARIZONA RESIDENTS ONLY: If you live in the state of Arizona and need help with a junk debt buyer lawsuit or need to file bankruptcy I can help you directly.

John offers informational products and strategies for consumers facing serious debt problems - particularly those being sued by junk debt buyers like Midland Funding, Portfolio Recovery Associates, Cavalry SPV, and many more.

KEY MOMENTS
00:00 Intro
00:50 What is Debt Consolidation
01:46 How Debt Settlement Companies Work
03:36 How Do You Know if Your Situation is Good

[Consumer_Warrior]

📆 Book an appointment to speak with John:

[martyedgar]

Thanks for increasing my knowledge in personal finance and investment, I recently subscribed to your channel. I want to give a big shout-out to all those working tirelessly to earn a living and build wealth during this recession. My husband and I are both retired and debt-free, and we're living smart and frugal with our money. Despite the recession, we're still earning passive income thanks to our savings and investments in the financial market. Investing lifestyle has enabled us to earn a steady monthly income through passive means, and we're grateful for it;

[everydaybeautiful]

Debt free consolidation is terrible ! for a year I paid them more than 8000 they only settle 1 credit card around 300 dollars! I quit waste $ 8000 not change anything.

[black_n]

This is a balanced take on how debt consolidation works. I especially dislike how these companies try to pull you in with an offer of a single low interest loan and then tell you you're unqualified but that you qualify for their debt consolidation program. They also obfuscate some of the finer details like how during the waiting process to build a balance that will then be used to settle the debt, the creditors could come calling. I think it's a good option for some people, especially if you can build that balance quickly and if you're hyper aware of the fees you could be charged by the company but other than that, I don't see how it's a very sensible route to go for most people.

[simbarashechikuni]

All I'll say: Debt cannot pay debt. You can't use fire with fire. The fire i speak of is the interest on all credit i.e. Profit for the creditor. The credit market if not regulated, creditors can charge whatever interest they want (or at least based on the consumer's debt profile). A lot of high interest credit translates to high repayments, affecting the cash flow of the consumer hence they feel financially strained.

To consolidate properly, you need to recognize the problem first: interest. Interest and installment move together - so if one goes up/down, the other will do the same. Therefore you need reduce interest and then consumers payments become more affordable and they can focus on clearing their debt.

You cannot clear your debts with a high interest loan, otherwise you'll sink yourself further into the spiral.
The focus of consolidation is to rehabilitate the client i.e. get debt-free and that's why during the time the client must not add further loans to their current exposure as they will never clear the debts

[breakmanradio]

Ugh, I don't know what to do. Is bankruptcy really the best option? Will I lose my one credit card and/or my secured credit card?

[lexioustheexcellence]

You're excellent. I've been contemplating on this all day trying to figure out what to do. You made it clear in less than 5 minutes.

[troytavarez]

Yeah i'm going through that right now, they just frozen my bank account.

[TrGuzeli]

What happens when you settle? Does this mean you can’t own a card with that creditor again or for a long time? What’s bad thing about settling?

[AngelGuerratherealme]

(Correct me if I'm wrong)
When you're looking online to pay off your debt, when you hire someone to guide you how to do that you basically giving them money which when you're paying the monthly plus the fee, what they're doing is basically saving the money, until they have the right amount that's when they be on board paying off your debt 🤔. Am I right or wrong?

[omtodsj]

Thank you for telling the truth lol I needed to hear this right now!

[davetiffany]

I went to a credit union and got a 7.99 rate on a 36 year loan. My debt consolidation loan was basically a personal loan and all my balances went to zero while I'm paying at a much lower fixed rate. Went and got a loan on a duplex months later and about to get my second loan. I also had a 730 credit score before so maybe that was my advantage? I had a great experience!

[aznycts]

Awesome Video 👍 i m going to see you Soon John .

[tofayelahmed]

Thank you sir! Appreciate your honesty.🙂

[ruanb]

Im thinking if someone has 5+ credit cards they owe a lot on all those accounts on their credit report showing a late payment 180+ on their credit report plus a settlement or judgement on their credit report ends up lowering their score more than just doing a bankruptcy before late payments show right? Most clients would find their credit rating ends up suffering less right?

[adansoares]

I have debts on the card with synchroni bank, I need to make a deal with them, do you think how many percent of the debt can I pay?

[genenco]

I dealt with CCCS (Consumer Credit Counseling Service) just a nice sounding name of a blood sucking credit card collection service.

They got all my cards but one to zero out my interest. I called and told them "Drop it, and I'll move heaven and earth to pay it"

They refused, my job ended, I flipped them the bird and wiped out everything. You're better off (if you can't pay) going bankrupt

[briannaoppong-antwi]

If debt consolidation was truly just getting a loan to pay off your cards and paying one lender at a lower interest rate it would make sense, but they include some kind of clause that will make things harder for you. If you think about it, why should the banks want to negotiate a lower interest rate? They are making a profit off of charging you so much in interest.

[hanisalhab]

can you dispute a debit while a lawsuit has been filled hut jot filed yet

[oreally]

I have three credit card accounts that are almost paid off ( paying lesser amount) through debt consolidation i want to apply again for one of the cards. ( Discover) would I get approved?