With the rising debt level in the US, most debtors are oscillating between various debt relief options. Debtors who have incurred outrageously huge amount of credit card debts usually go for bankruptcy or a debt consolidation program. The most common question that is asked by debtors is whether or not consolidating your debts through a debt consolidation program is better than filing bankruptcy. If you’re going through financial hardship and you’re not being able to make ends meet, make sure you get help from a reputable debt consolidation program that will help you pay off your debts and also protect your credit score.

What is a debt consolidation program?

Most debt consolidation companies offer a debt consolidation program wherein a debt consultant helps you pay off your credit card debts in single and affordable monthly payments. The debt consultant, after assessing your finances, will enroll you in a plan where you can consolidate all your payments and repay your creditors in single and affordable monthly payments. By consolidating your credit card debts through a debt consolidation program, you’ll be able to make your credit score shine as you’ll start taking baby steps towards your credit card debts.

What is the main disadvantage of filing bankruptcy?

A person files bankruptcy when he is sure about his inability to pay off his debts to his creditors. While a debtor files bankruptcy, Chapter 7 or 13, there is a big negative impact on the person’s credit score. As the debtor declares his financial inabilities and the bankruptcy court seizes his property and assets, this has a worse impact on the credit score of the debtor in question. The impact of bankruptcy stays on your credit report for the next 7 to 10 years and makes you completely unworthy of obtaining new lines of credit.

While you do not repay any amount to the creditors in a Chapter 7 and a portion of the amount in Chapter 13, you can actually repay the entire amount through a debt consolidation program. This is where the biggest difference lies between filing bankruptcy and enrolling yourself in a debt consolidation program. One more point that needs to be mentioned here is that unlike bankruptcy, debt consolidation is a private affair. No one comes to know whether you’re being able to pay off your debts. On the contrary, while you file bankruptcy, you’ll be dragged into the bankruptcy court and everyone will come to know about your financial state. This often embarrasses a debtor to a great extent.

Therefore, if you cannot decide between choosing a debt consolidation program or bankruptcy, you must have known after reading this article that debt consolidation is a far better option that filing bankruptcy. Get in touch with a reputable debt consolidation program and pay off your debts in affordable monthly payments to lead a debt free life.

Tagged with: Bankruptcy • Consolidation • Debt • Program

Filed under: Debt Consolidation Bankruptcy

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