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How To Consolidate Your Debts in Nevada

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In a Nutshell

After you have had your initial credit counseling session, you may want to know more about how to obtain your own debt consolidation. The rest of this article is designed to lay out the steps involved in consolidating your debts in Nevada.

Written by the Upsolve Team
Updated March 25, 2024

According to U.S. Census data, over 55% of households in Nevada earn less than $50,000 per year. And among all households in Nevada over 45% receive part of their income from Social Security, Supplemental Social Security or public assistance. If you rely on a fixed income and are struggling to pay bills you incurred years ago, a Nevada debt consolidation loan can help you retire those old bills for good.

Debt consolidation works by combining all of your high-interest debt into one single monthly payment. Typically, this involves taking out a new loan to pay off all your old loans or credit cards. Because this new loan will usually come with a lower interest rate, you'll typically have a lower monthly payment. This loan can take many different forms – a personal loan, a home equity loan, a credit card balance transfer, refinancing your mortgage to pull out equity, or through a debt management plan.

When accomplished through a Nevada debt management plan, a nonprofit credit counseling agency acts as a middleman between you and your creditors and makes payments to your creditors based on an agreed-upon plan. The debt management plan will usually include a lower interest rate, extended repayment terms, and cancellation of over-the-limit and late payment fees.

Whether you go with a debt consolidation loan or a debt management plan, there are risks with any Nevada debt consolidation. These risks include getting back into debt after your debt consolidation by reusing the accounts you paid off. Another risk is making your financial situation worse by missing payments on your debt consolidation and being unable to get back on track.

Despite the risks, if you do your homework and learn how Nevada debt consolidation works, it is possible to restructure your personal finances and pay off lingering debt with Nevada debt consolidation. Doing so can also help you pay your other bills, including rent, on time.

Learn More Through Free Nonprofit Credit Counseling

The first step to any debt consolidation should always be free, non-profit credit counseling. It is intended to help you understand your current financial situation and take active steps to improve your relationship with your money. When you take part in free, non-profit credit counseling you will work one-on-one with a trained counselor to identify financial challenges, set goals, and create an action plan to achieve those goals. If you like, they can also pull a copy of your credit report and review your credit score and credit history with you. Depending on the outcome of the counseling session, additional debt relief services like a customized debt management plan may be offered.

You can attend a free, non-profit credit counseling session in person, over-the-phone or online. Each session will last approximately 30 minutes to one hour depending on your individual situation. After completing the session, you are under no obligation to enroll in any debt relief program and will be provided free financial education materials to learn more about money management.

To get a more thorough explanation of how debt consolidation works and what type of debt consolidation would be best for you specifically, request a risk-free, no-obligation, free credit counseling session with an accredited non-profit credit counseling agency

How to Consolidate Your Debts in Nevada

After you have had your initial credit counseling session, you may want to know more about how to obtain your own debt consolidation. The rest of this article is designed to lay out the steps involved in consolidating your debts in Nevada.

Collect the Details About Your Debts

Your first step in consolidating your debts in Nevada is to collect the details necessary to customize your own Nevada debt consolidation loan. Begin with your most recent statement for all your credit cards and other monthly bills you would like to consolidate. In order to determine if debt consolidation makes sense for your situation, you need to know the total amount of debt you owe, who you owe, how much you are paying on that debt and how long it will currently take you to pay it all off. Be sure to include types of loans you usually can’t consolidate like car loans, medical bills, and student loans. Your credit counselor will need these to help you put together your budget.

You should pay particular attention to your current balance, your current interest rates, and your minimum payment, due dates, and the fees and charges billed to your accounts. If you can’t locate your actual bills, pull a copy of your free annual credit report which will include all of this information. Debt consolidation can be especially useful for people who can pay their debts, but don’t have a good track record of remembering to pay all of their bills every month. Getting a free credit report will serve as a safety net to make sure nothing falls through the cracks. You can pull a free credit report weekly.

Determine Your Monthly Income

In order to know if debt consolidation is a viable option for you, determining your actual monthly income matters just as much as your debts do. The more income you have leftover every month after meeting your day to day expenses, the more of your debts you will be able to consolidate and pay. Calculate your monthly income using the two most recent paystubs. Some best practices to follow when determining your monthly income are:

  • Avoid including overtime, special or bonus pay in your monthly income as it can vary from paycheck to paycheck;

  • Pay attention to whether you get paid bi-weekly or semi-monthly; bi-weekly employees get paid 26 times per year; semi-monthly employees get paid 24 times per year;

  • Also avoid child support or alimony that can be unreliable and stretch your budget too thin if it is not received every month on time, or at all;

  • Do not include your spouse’s income unless your spouse is a co-debtor on the debts you are consolidating, and they are taking part in the debt consolidation with you.

The more specific and realistic you are about your monthly income, the more accurate and useful your budget will be. Which will, in turn, make your debt consolidation more effective and more likely to succeed.

Put Together Your Budget

In addition to calculating your monthly income, you will need to put together a budget when you are ready to explore debt consolidation. A budget measures your monthly income against your monthly expenses. Your expenses are separated into fixed costs and variable costs. Fixed costs typically include bills that don’t fluctuate more than $10 each per month, such as your rent/mortgage, car note, student loans, cell phone bill, internet, cable, and car insurance. Although the exact bills will vary depending on the type of plan or service you are subscribed to. Variable costs are expenses that change every month such as groceries, gas, and entertainment.

After you have itemized your fixed and variable costs, determine how much money you have left after paying these expenses. That result is what you have available to pay to your creditors. If you do not have anything left, or you have significantly less left than the debts you pay every month, look for some red flags. Some red flags that might come up include:

  • Missing expenses. Check your bank statements and receipts to see if you have accounted for all your expenses. Pay attention to bills that get paid automatically that you might have missed like gym memberships.

  • Did you make any serious errors and omissions in calculating your monthly expenses like using paychecks that include a lot of overtime? Your budget needs to be based on reality for debt consolidation to work.

  • Is your income calculated incorrectly? Weekly or bi-weekly earnings are not simply multiplying your pay by four or two. Different months have a different number of weeks. Double-check to see if you’re accounting for you pay frequency correctly. .

If you have ruled out all the possible red flags in putting together your budget and you still have negative or no disposable income at the end of the month or have very limited money left after deducting living expenses, debt consolidation is probably not a good option for you.

Do the Math

One other thing you should do before ruling out or settling on debt consolidation is to do the math. Using the information you collected about your debts and the numbers you worked out for your budget you can get a quick idea of what your monthly debt consolidation payment would be and whether you have enough disposable income left over to make it.

To calculate your monthly debt consolidation loan payments, take your total debt and divide it by 60. This will tell you how much you would have to pay each month on that debt to pay it off in five years, without interest or costs such as origination fees. For example, if your total debt was $20,000. Your monthly debt consolidation payment (without accounting for interest) would be approximately $333 per month. Now compare the result to your disposable income and you can see whether you would be able to make your debt consolidation payment every month. Your disposable income should always exceed your monthly debt consolidation payment.

Review Your Nevada Debt Consolidation Options

Now that you have put together a budget and know whether or not a debt consolidation is a good option for you, let’s review the different forms of debt consolidation you can choose from and the pros and cons of each: 

  • Credit card balance transfers are risky because they offer a lower interest rate on balance transfers for a promotional period of time that is usually less time than you need to pay off the entire balance. If the balance is not paid off within this time, the low-interest rate usually increases significantly, and you end up paying a higher interest rate than you currently have. Other fees like balance transfer fees can also increase the actual rate of interest you pay on the balance even during the promotional period. 

  • Refinancing your mortgage and pulling out extra equity to pay off debt refinances your unsecured debts over the term of the mortgage and may, therefore, be more expensive in the long run. 

  • A home equity loan usually comes with an adjustable interest rate, loan origination fees and closing costs that can increase the cost of the loan significantly over the life of the home equity loan. This may result in you having a larger monthly payment than you had before and costing you more in interest and origination fees than you were paying. Even worse, if you default on the loan, you risk losing your home.

  • Obtaining an unsecured debt consolidation loan usually has fewer risks than the other loan options as long as you go through a reputable lender. However, they typically come with a higher rate of interest than you are paying on most of your credit card debt, so choose carefully. 

  • A debt management plan typically does not involve any risk upfront. However, once you enter into the payment plan your unsecured loans will typically be closed as part of the plan. Your credit score will initially be impacted which will limit your ability to obtain new credit. However, a debt management plan is typically the quickest debt consolidation to get started and will provide the most immediate debt relief.

Apply for a Nevada Debt Consolidation Loan

When you are ready to apply for a Nevada debt consolidation loan you should be very careful of scams and deceptive direct mail solicitations. Whenever possible, you should approach your local bank or credit union first when attempting to apply for a debt consolidation loan.

If that is not possible and you must deal with a new lender here a few things to look out for:

  • Never pay any money upfront; legitimate lending organizations don’t ask for money before they’ve provided any service.

  • Carefully scrutinize any offer you receive in the mail; is it advertising a promotional rate or are the loan terms only available to “well qualified” applicants;

  • And never deposit any “checks” you receive unsolicited in the mail!  Doing so provides the lender with all of your pertinent banking information and often obligates you to extremely onerous repayment terms hidden in the very fine print.

Finally, if you are rejected by your local bank or credit union or can’t find one with terms you are happy with; a debt management plan is a viable alternative. A debt management plan does not require that you take out any new debt and is available to you regardless of your credit score.

How to Stay Current with Payments After Consolidating Your Debts in Nevada

After your debt consolidation has been set-up you may be anxious to spend money on some things you have been putting off. You should not do this. It is imperative that after you have set up your Nevada debt consolidation loan that you stay current with your payments. Otherwise, you can find yourself in the same situation you were in before, or worse. Instead of spending the extra money your debt consolidation frees up, use it to set up a system to set aside funds that are budgeted to cover an expected large or one-time expense (e.g. annual costs for car registration). 

You should also come up with some ways to keep track of your spending to ensure you stay within your budget even after your Nevada debt consolidation loan. 

Finally, don’t be afraid to reward yourself for staying current with your debt consolidation. Talk to your credit counselor about small ways to recognize significant milestones on your path to becoming debt-free.

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Nevada Debt Management Plan

For those struggling to balance their regular monthly expenses with unmanageable credit card debt, a Nevada debt management plan is a beneficial form of debt consolidation. It allows you to fully repay your unsecured debt (usually credit cards) while also making the repayment more affordable. You can consolidate multiple monthly debt payments into one single payment, often significantly lowering the interest rates, waiving over-the-limit and late fees and stabilizing the monthly payment in the process. Because there are no credit score requirements, a Nevada DMP is a great alternative for anyone that is denied a credit card debt consolidation loan or credit card balance transfer.

Nevada Debt settlement

If you are familiar with debt consolidation, you have probably heard of something called debt settlement. Nevada debt settlement is different from debt consolidation because instead of consolidating all the debts you owe and repaying them, a debt settlement company tries to pay off your debts individually for less than what is owed. Debt settlement can be risky because you are relying on a for-profit debt settlement company to negotiate with your creditors for you. This not only exposes you to unscrupulous practices like upfront fees and hidden charges, but it also exposes you to outright scams.

Nevada Bankruptcy

A Nevada bankruptcy is another legal form of debt relief that is available to you when debt consolidation is not an option. If you have little or no income, or your monthly payment and payment terms on a Nevada debt consolidation loan, are too difficult to commit to, then bankruptcy can help. Upsolve has helped over 2,000 families eliminate over $100,000,000 in debt and we can help you too.

Written By:

The Upsolve Team

Upsolve is fortunate to have a remarkable team of bankruptcy attorneys, as well as finance and consumer rights professionals, as contributing writers to help us keep our content up to date, informative, and helpful to everyone.

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