How To Decide If You Need Debt Consolidation Or Bankruptcy
Posted on: 2 February 2018
If you have been struggling with your bills, you might find yourself starting to wonder if there is a way you can get some help getting out from underneath the debt that is piling on top of you. For many people, debt consolidation and bankruptcy are two good choices. However, if you are in a position where you do not know which route you should take, you will want to keep reading. Here are some things that you need to consider before opting for either:
Debt Consolidation
This can be a great option for someone who needs help with their personal or business debt. If you have found that you are just barely making it, or running a little behind, a debt consolidation loan might be the best thing for you. With this type of loan, which is based on credit worthiness, you will have all of your smaller individual debts paid off. You will then only have the one loan from the consolidation. With the single payment and the lower interest rate, you should find that you are able to handle your monthly expenses in a much easier manner.
Bankruptcy
Whether this is for your personal finances or your business dealings, you might need to talk with an attorney if you are no where near able to keep up with your monthly obligations. This also might be a good option if you have already tried to get a debt consolidation loan, but have found that you were either denied or that you still would not be able to afford the new loan amount. It is very important to make sure that you are talking with a bankruptcy attorney so you can decide if a chapter 7 or chapter 13 would be the best option for you. With the chapter 7, your debts are forgiven, which means you get to financially start over again. You do not have to pay on your debts anymore. With a chapter 13, you will pay on a payment plan organized by the bankruptcy courts. If you are trying to reorganize business debts, you would file a chapter 11.
As you can see, there are some benefits to both the debt consolidation and bankruptcy options. You will want to make sure that you are taking some time to sit down with a bancruptcy attorney or another financial advisor. The more you research your options, the sooner your finances can be back on track.
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