for credit card debt
What is the average cost for debt management?
- Posted:
- 3+ months ago by mbt123
- Topics:
- card, management, credit, cost
Details:
Answers (2)
Debt Management? If bankruptcy is the best way then it is highly recommended you have a bankruptcy attorney on your side. They understand the credit laws and can help you to get through the process without a hitch. You have to file a motion in court to file bankruptcy and there is a lot of paperwork that has to be filed correctly. One wrong filing can cause the whole process to start over. Having an attorney on your side can help you avoid all that.
Here’s a pretty comprehensive list of all the kinds of fees you should research when looking into the possibility of doing debt consolidation:
Origination fees: This type of fee often applies to new loans, whether it be a home equity loan or an unsecured debt consolidation loan. Lenders argue that these fees are necessary to cover the administrative costs of initiating your loan. Origination fees can be anywhere from 1% to 5% of your total loan amount (which is a lot!) so don’t take these lightly. In some cases, however, you won’t need to pay an origination fee when you get a debt consolidation loan.
Closing fees: This is another term for origination fees.
Annual fees: You’re especially likely to have an annual fee if you get a home equity loan or home equity line of credit (HELOC), and often you’ll have an annual fee with a balance transfer. These fees are often around $50 (though they can be less).
Balance transfer fees: When you do a balance transfer, you’ll have to pay a fee right off the bat that’s equivalent to a small percentage of your total balance (kind of like an origination fee). Usually, the initial balance transfer fee is between 3-5%.
Late fees: These obviously can vary quite a bit depending on what type of debt consolidation you’re doing. If you do a balance transfer, you need to be extra careful about late fees, because while normal credit card late fees run between $15 and $35, a late payment during a balance transfer introductory period can cost you hundreds of dollars. That’s because, according to the terms of most balance transfer offers, you start with a low (or even zero percent) interest rate for a limited period of time – but that disappears if you make even one late payment. Other late fees are not so drastic, however, you should still be aware of them and avoid them as much as possible.
Early cancellation fees: These are common when taking out a HELOC. For example, you may be charged either a flat fee (up to $400 or $500) or a percentage fee (around 1% of the loan amount) if you decide to close the line of credit within the first three years. The reason for this fee is that the company would prefer to earn more interest from you, rather than having you quickly close the account.