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Risking foreclosure to pay other debts in South Carolina

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After hearing the details of discipline and sacrifice some people make to become debt-free, those who struggle with debt may feel inspired to take their own drastic steps. However, this often means taking out a second mortgage to consolidate loans. Doing so may lead to foreclosure because it doesn’t eliminate the problem; it just moves it to another creditor. South Carolina residents struggling with debt may consider alternative actions to save their homes.

Debt settlement companies often charge thousands of dollars, claiming they can offer debt relief. However, in many cases, creditors will not negotiate with such establishments because of their reputation for fraud and instability. On the other hand, some struggling with debt may chip away at their retirement funds. While this may work to relieve their debt, it often sets them up for even harder struggles in the future when their earning power decreases.

The importance of professional legal advice cannot be overstated. One woman responded to harassment from a debt collector by paying $12,000 in principal, interest and fees for a delinquent student loan only to discover that the statute of limitations made the debt unenforceable. This meant that, while the creditor could continue to attempt to collect on the loan, legal action against her such as lawsuits or wage garnishment were subject to dismissal because too much time had elapsed. With proper legal advice, the woman may have avoided making a payment that potentially placed her home in danger of foreclosure.

Overwhelming debt can affect every area of a person’s life. While there are many ways to get out of debt, some of them may place a person at risk of even deeper debt, including the risk of foreclosure on the family home or the depletion of retirement funds. Seeking the help of an attorney may provide South Carolina residents with alternatives for managing the burden of debt and moving toward a more positive future.

Source: dailyherald.com, “Tips for becoming debt-free — without regrets”, Liz Weston, July 9, 2017