Lefkovitz & Lefkovitz
Nashville Office 615-686-2279 Cookeville Office 931-400-2218
Serving all of Middle Tennessee's Bankruptcy Needs

Debt consolidation loans don't work for everybody

Tennessee residents who have a lot of credit card debt might decide to take out a loan as a way to consolidate their debts, lower interest payments and get out of debt faster. While debt consolidation loans may help some debtors, such loans may cause others to get deeper into debt.

A person may have more success with a debt consolidation loan if they get a loan that has a low interest rate and short repayment terms. To avoid running up credit cards again while debt is consolidated, a person may want to take their credit cards out of their wallet or close their credit card accounts altogether.

Studies have shown that debt consolidation loans do not work for a majority of debtors. One study published by the Association for Financial Counseling and Planning Education showed that 87.5 percent of people who take out debt consolidation loans incur more debt within one year. The Panel Study of Income Dynamics found that taking out a debt consolidation loan does not make a debtor any less likely to file for bankruptcy.

Consolidating debts into one loan may not help a person who has little to no income. A person who cannot afford to make payments on their debt may need to file for Chapter 7 bankruptcy. Bankruptcy can help a debtor to stop collection attempts and have debts discharged. Even if a debtor does not have any assets of value that can be liquidated, their debts can still be discharged in the Chapter 7 bankruptcy process.

No Comments

Leave a comment
Comment Information

We Look At Your Case From Every Angle To Find The Solution That Is Right For You

Bankruptcy help for everyone, from the most simple to the most complex cases.

Call Us Now To Schedule A Free Initial Consultation

Contact our Nashville office at 615-686-2279 or our Cookeville office at 931-400-2218. You can also reach us via email to set up a time to talk to us about your debts.

Get Legal Help Now

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Nashville Office
618 Church Street, Suite 410
Nashville, TN 37219

Phone: 615-686-2279
Fax: 615-255-4516
Nashville Law Office Map

Cookeville Office
312 East Broad Street, Suite A
Cookeville, TN 38501

Phone: 931-400-2218
Fax: 931-526-6244
Cookeville Law Office Map

Back To Top