Too many loans accumulated: the benefits of debt consolidation.
This institution has two undeniable advantages for the debtor. First of all, it makes it possible to reorder – from an administrative point of view – all the installments: the debtor will no longer have to deal with many postal bills, will control the entire situation and will not risk forgetting to pay a few installments. Secondly, the consolidation of debts allows to reduce the total installment: the debtor, in fact, can get better interest rates than those applied in the individual original loans. An undeniable advantage.
The capital provided through debt consolidation may also exceed the amount of the capital initially financed: in this way the debtor will have new liquidity available to make his purchases.
With regard to the guarantees required to protect debt consolidation, they are more or less the same as for normal loans. In some cases it will not be necessary to lend new warranties as well as being able to be used for the original financing. Finally, many financial institutions grant this type of loan also with the assignments of the fifth salary: a solution, this, which brings many benefits also to “bad payers”.
Too many loans accumulated: personal bankruptcy
When too much funding is in progress and you are crushed by debts, you can also take the road of “declaration of personal bankruptcy” . If the debtor has no assets and enough cash to repay all installments, he can ask the court to declare his bankruptcy.
This is an interesting opportunity introduced in our legislative system by a recent bill. One of the most important effects of personal bankruptcy is the following: all debts incurred will be blocked pending a decision of the Court. It is also here that the debtor can renegotiate debts together with creditors.
Personal bankruptcy allows the debtor to take a “break”: this innovative legal institution, in fact, interrupts any form of attachment in progress and any executive action initiated against the debtor.
It is important, however, to emphasize that personal bankruptcy is not the solution. In fact, it does not cancel all debts but temporarily suspends them. The debts not included in the personal bankruptcy declaration procedure remain active after the closing of the procedure. The debtor will not be exonerated from their payment.
Too many loans: how much funding can I make?
First of all, to answer this question, it is necessary to use common sense. Every time you sign a new loan, every time you place your assets on payment of a new monthly payment, you must ask yourself if you can afford it. We need to start thinking as if we were running a business. As an entrepreneur, you will have to evaluate and calculate, with extreme care, all entries and exits. Only in this way, through careful planning, you will avoid being struck at the end of the month.
It will then be the bank or credit institution that decides whether or not to issue a new loan based on an in-depth analysis of the applicant’s assets. If the latter has always paid all the installments on a regular basis, there is no reason not to disburse the new loan.
Conversely, if you are a bad payer, the credit institution may decide to deny the new loan. It will also be important to evaluate the debtor’s income to understand if a new monthly payment could make it difficult to pay all the installments in progress.
As you may have guessed, this is an entirely subjective assessment carried out by the entity to which the subject turns to request a new loan.