Debt Consolidation Versus Bankruptcy: Which Fit Is Best For You
Finding a way to manage burdensome debt is no easy task. Many people will tell you that you can handle the matter on your own, by calling your creditors and asking for a reduced interest rate or lower payments. In some instances there might even be talk of skipping payments in order to let you get through a rough financial patch, or repaying only a portion of what is owed. Still yet there is the possibility of consolidating your debt into one loan so only one payment is made every month, or filing for bankruptcy which would eliminate some of your debt and free up your disposable income.
The choice is yours, but should only be made after thoroughly reviewing all of your options. Some key components of each type of debt relief include:
● Debt consolidation is not the same as filing bankruptcy, and will keep the notation of bankruptcy off of your credit history. But, keep in mind not all of your creditors will participate in a consolidation program so the benefits may be minimial.
● Bankruptcy will eliminate worrisome debt, but will impact your credit.
Perhaps the most significant element to keep in mind when deciding whether to file for bankruptcy or to consolidate debt is that many debt consolidation companies make promises they are unable to keep. As stated, not all creditors participate in debt consolidation, and a company may “sell” this option to you by promising to coordinate lower payments on your behalf. What is often times left out of the information provided is that creditors are not required to accept the offers made. This can put you in the position of making payments to the company, anticipating the company will pay your debts, but the payment being rejected by your creditor. If that happens you will find yourself making payments to the debt consolidator and still being required to pay some of your bills outside of that arrangements. This can actually lead to paying more per month than you are able to do, and expose you to possible collection lawsuits. Bankruptcy is Court sanctioned and approved, and even contains a provision very similar to consolidation. For more information, call our office.
If you have overwhelming debt, call our office for help. We will review the facts of your unique circumstances and develop a strategy that works best for you, your family, and your budget. Call a Plantation, Florida debt relief attorney today for more information.