When you have far more debt than you can manage, you may have to choose between debt consolidation and bankruptcy. It is a difficult choice to make, especially if you do not have all of the facts. If you are serious about taking care of old debts and finances, it’s a good idea to contact our office to help determine the best option for your situation. In the meantime, consider the following facts to determine whether debt consolidation or bankruptcy is for you.
How Much Does Debt Consolidation Cost?
Unless you consolidate your debt under bankruptcy terms, you may spend more on the combined debt than you can afford. Debt consolidation is a great idea if you want to consolidate everything yourself and stick to one payment, but it may not work out so well when you go through a debt consolidation company.
Debt consolidation companies often charge high interest rates to manage the debts for you while doing what you could easily just do yourself. Sometimes they even pay off debts for a fraction of what they are worth, but you end up paying more in the long run because of the fees and interest the debt consolidation company charges you for their services.
When it comes to debt consolidation, there are other issues as well. Some of these issues include the following:
- Lenders can see that you have a loan through a debt consolidation company on your credit report.
- The debt consolidation process and expenses can drag out for years.
- You could end up paying more than you initially owed before the consolidation.
- You may end up filing bankruptcy anyway if you become unable to make the consolidated payments.
In fact, if you are considering debt consolidation, you might be better off filing Chapter 13 bankruptcy instead. More debt consolidation and Chapter 13 information is available here (http://www.zerodownbankruptcy.com/bankruptcy-lawyer-st-petersburg-florida/chapter-13/).
Cost of Bankruptcy
The cost of bankruptcy is much clearer than it is for debt consolidation. You pay your lawyer a straight fee and then you are done paying for it. The process normally takes a couple of months. In the meantime, creditors won’t be bothering you.
The bankruptcy does stay on your credit report, but creditors also know that you cannot file again anytime soon. This means they are more apt to offer you a loan or line of credit. Read more about bankruptcy here (http://www.zerodownbankruptcy.com/).
When choosing between debt consolidation and bankruptcy, don’t just think about the short-term resolution. Consider whether you want to deal with these debts for years to come and how much it is going to cost you in the end. For many consumers with debt, bankruptcy—whether Chapter 7 or Chapter 13—is more likely to be the better solution for your situation.
Please share this post online with people who may be deciding between debt consolidation and bankruptcy.
Related Links:
Florida Bankruptcy Attorneys
http://www.zerodownbankruptcy.com/
Chapter 7 Bankruptcy Lawyers
http://www.zerodownbankruptcy.com/chapter-7/
St. Petersburg Florida Chapter 13 Lawyers
http://www.zerodownbankruptcy.com/bankruptcy-lawyer-st-petersburg-florida/chapter-13/