Frequently Asked Questions
About Debt
What is the Fair Debt Collection Practices
Act (FDCPA)?
This is a federal law that protects consumers from harassment or threats made by
creditors. It also prohibits creditors from making false statements. This law also
prohibits a debt collector from disclosing what you owe to anyone but you or your
attorney.
Is a home equity loan a good way to pay off credit card debt?
Credit card debt is unsecured debt, meaning there are no assets backing it up that
the lender can come after if you fail to pay what you owe. But a home equity loan
is secured debt and your home is the collateral. If you don't pay according to the terms of the loan, the lender can seize your home as a way of obtaining payment.
You can put yourself in jeopardy with Home Equity Loans and Home Equity Lines of
Credit if a job loss, illness, divorce, death in the family, or other event makes
it impossible for you to make the loan payments. The lender can then force you to
sell your home in order to repay the loan. Also, if you do sell the home, you may
not get what you owe on it, depending on market circumstances.
The bottom line is you don't use your home as a bank to fund your lifestyle or mend
poor financial decisions you may have made. When you use your home as collateral
for a loan to pay off other debt, chances are high that you will get right back
into debt with additional purchases, putting your home at risk. Consolidated Credit
offers you a better way, simply because we also educate you on how to control your
spending and manage your budget.
What is unsecured debt?
Unsecured debt is debt that a creditor holds no collateral on, so they cannot take
back anything if the debtor fails to pay. Examples of unsecured debt would be credit
cards, department store cards, signature loans, student loans, medical bills, legal
bills, personal loans and cellular phone bills.
