Posted on: 24th Dec, 2010 02:23 am
Hello Everyone,
I am confused about debt consolidation and bankruptcy.Please tell me which is better to get out of debt quickly..?
I am confused about debt consolidation and bankruptcy.Please tell me which is better to get out of debt quickly..?
This is a very wide encompassing question.. here is the "quick-n-dirty":
Debt consolidation basically just consolidates several debts into one, if you are trying to use services that promise to lower your interest rates and slash your debt, I would be VERY careful as many of these are just scams that take your money and never deliver. I have dealt with these situations extensively and I can't urge you enough to do LOTS of research if this is what you are trying to do. I would highly encourage you to visit Consumer Credit Counseling in your area, they are a reputable organization and can usually give you decent direction plus they have a lot of great tools not the least of which is a comprehensive bankruptcy counseling course that would be required if you decide to go that route. I would pay the $100 or so they want for that course as that will open your eyes WIDE open as to what your financial situation is and what your options are. The fee is well worth EVERY PENNY of it.
Bankruptcy comes in generally two forms for the average folk..
Chapter 13 which is a court managed debt consolidation plan.. this is also the most expensive of the the BK options.. Runs between $2,500-$5,000 to do depending on how gullible you are.. money paid upfront usually though some attorneys will add a portion of it to the court administered debt repayment plan..
Chapter 7 which wipes out all your debt and gives you a clean slate.. also the cheapest of the two to file. Should cost you around a grand ($1,000) to get it done. This option has income limits that you must meet as well as some requirements on assets.. just google either of these two BK chapters and you will get lots of hits on it.
Go to Consumer Credit Counseling though, start there... hope this helps
Debt consolidation basically just consolidates several debts into one, if you are trying to use services that promise to lower your interest rates and slash your debt, I would be VERY careful as many of these are just scams that take your money and never deliver. I have dealt with these situations extensively and I can't urge you enough to do LOTS of research if this is what you are trying to do. I would highly encourage you to visit Consumer Credit Counseling in your area, they are a reputable organization and can usually give you decent direction plus they have a lot of great tools not the least of which is a comprehensive bankruptcy counseling course that would be required if you decide to go that route. I would pay the $100 or so they want for that course as that will open your eyes WIDE open as to what your financial situation is and what your options are. The fee is well worth EVERY PENNY of it.
Bankruptcy comes in generally two forms for the average folk..
Chapter 13 which is a court managed debt consolidation plan.. this is also the most expensive of the the BK options.. Runs between $2,500-$5,000 to do depending on how gullible you are.. money paid upfront usually though some attorneys will add a portion of it to the court administered debt repayment plan..
Chapter 7 which wipes out all your debt and gives you a clean slate.. also the cheapest of the two to file. Should cost you around a grand ($1,000) to get it done. This option has income limits that you must meet as well as some requirements on assets.. just google either of these two BK chapters and you will get lots of hits on it.
Go to Consumer Credit Counseling though, start there... hope this helps
Yes, debt consolidation is better than bankruptcy.Bankruptcy may have a lasting impact on your credit report which will affect your ability to get credit at favorable interest rates.So debt consolidation is better to solve your debt problems.
Bankruptcy should always be your last resort. In my opinion debt consolidation is definitely better than opting for bankruptcy. Always remember that bankruptcy may save you from debt, but it remains on your credit report for a fairly long time, making you ineligible for further loans. So before you decide to file for bankruptcy, consider its pros and cons and also get debt advice from reputed debt management companies.
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It really depends on the amount of debt you have, usually if you have over 20k in debt you will never be able to pay that back in your life time (most likely). You have two options:
1) settle debt with your creditors yourself
2) hire a debt consolidation company (however, a lot of these companies are scams, when you can do it yourself).
3) file bankruptcy chapter 13 or 7 (hurts your credit for up to 7 years maybe less), but your credit is probably hurt already.
If you have less than 5k then you should try to settle and go over your monthly budget and see how you can work to pay off the debt within so many years.
1) settle debt with your creditors yourself
2) hire a debt consolidation company (however, a lot of these companies are scams, when you can do it yourself).
3) file bankruptcy chapter 13 or 7 (hurts your credit for up to 7 years maybe less), but your credit is probably hurt already.
If you have less than 5k then you should try to settle and go over your monthly budget and see how you can work to pay off the debt within so many years.