Over-indebtedness can affect anyone. The causes can be multiple, from the simple calculation error to the change in the work situation, to the not so remote possibility that urgent and important expenses are concentrated in a short time. The result of all this is finding yourself in the situation – not simple – of managing multiple exits simultaneously. But fortunately, the solution to such a scenario exists and is called Debt Consolidation!
As the name suggests, this is a procedure that allows us to “consolidate” the debts contracted with different interlocutors in favor of a single loan and a single more sustainable installment. In fact, the main advantage of this financial solution is the unification of the installments into one, for a total amount certainly lower than the sum of the original amounts.
Let’s see what Debt Consolidation is about and how to get a lower rate compatible with your lifestyle.
Take a closer look and then Request a debt consolidation
So how to renegotiate the current loans? Given that anyone, for reasons that often transcends his will, can enter the tunnel of over-indebtedness, we have seen it as one of the most valid options to overcome the nightmare of too many monthly installments is that of Debt Consolidation.
Implementing it is simple, especially if you choose the formula of the Cession of the Fifth. Originally planned for public employees only, today the Cession of the Fifth has been extended to private employees and pensioners, offering the opportunity to repay debts in exchange for a fifth (hence the name) of their salary or pension.
Simplicity, speed, confidentiality, and flexibility are just some of the advantages linked to the Assignment of the Fifth for those who want to consolidate their debts. In addition, the Assignment of the Fifth can also be requested by those who have had previous payment delays and reports.
The single installment mechanism in debt consolidation
The cardinal principle of Debt Consolidation revolves around the mechanism of the single installment. According to the provisions of the Decree of December 22nd, 2011, No. 212 “Urgent provisions concerning the composition of the over-indebtedness crisis and the regulation of the civil process”:
The debtor in a state of over-indebtedness can propose to the creditors […] a debt restructuring agreement based on a plan that ensures the regular payment of creditors outside the agreement […]. The plan provides for the terms and conditions for the payment of creditors, even if divided into classes, any guarantees given for the fulfillment of debts, the procedures for the eventual liquidation of the assets.
Because of this, the single installment not only lowers the installment (ie the sum of the original individual installments) but is presented as the best alternative to realize the payment plan. We have explained it for example in the article The Loan that simplifies life: how to collect debts in one convenient installment, introducing the concept of Assignment of the Fifth for a Consolidation of Debts in a workmanlike manner.