Bankruptcy vs. Debt Consolidation?
Question:
Answer:
Bankruptcy is an absolute last resort. If you can possibly avoid it, I urge you do do so.
Debt consolidation comes in many forms. There is also debt relief and debt management plans. You should explore all of these before you act.
I have given links to a couple of websites which deal with this question and may help with the information you need to decide what is best for you.
Good luck!
the only thing i know is that if you do debt consolidation it does effect your credit.when you apply for a home loan/car loan etc. it shows up as a red flag.
so, not really sure which one is better. you should talk to a loan officer from your local bank. they will give you the Right info. they are not on commission and they tend to be more knowledgeable and not try to take advantage of you.
Debt consolidation can be a rip off. AND what many people don't know is that if you go through these companies, it looks like a Chapter 13 bankruptcy anyway. If you have a small amount of debt that you are able to pay on, by all means try and do it yourself. Call your creditors and try to get your interest rates reduced OR make a "settlement offer". Bankruptcy should be a final option. If you are just not able to pay your bills no matter what. If you have absolutely not enough money to pay your living expenses and nothing more than that, then by all means, file chapter 7. I am in this situation right now... I just retained my attorney and we are getting ready to file Chapter 7. I have tried all the other stuff, but harsh circumstances (loss of jobs, house, etc.) are forcing my husband and I in to this.
Chapter 7 is forgiveness of debts
Chapter 13 is reorganization with a court order to pay a certain amount each month.
Neither. Call Consumer Credit Counseling Services. They are free and will work with your creditors to lower your monthly payments and lower your interest rates. I used them several years ago and was debt free in 36-months.
It will show on your credit bureau that your accounts are being managed by credit counseling, but that is a whole lot better than bankruptcy.
They are both bad. If don't need to don't! Bankruptcy is worse, but you need to try and call your credit companies and negotiate lower monthly payments. You STILL HAVE TO PAY if you go bankrupt. It's the law! Seriously. Call them, and say that you are in such a pickle that you are about to file bankruptcy, unless you can lower monthly payments. DON'T MAKE ANY NEW CHARGES. If you can't afford a lifestyle then you just can't. You might need to live in a studio and eat Ramen, but that's the breaks.
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