Which Is Best – Debt Consolidation Or Chapter 13 Bankruptcy
Conversely, declaring bankruptcy is a matter of public record. It’s a legal action that requires the representation of a bankruptcy lawyer, thus incurring legal fees from $160 to $1500 or higher, depending on the amount of paperwork involved. However, pre-bankruptcy creditors cannot claim any post-bankruptcy money you earn, you typically keep your home and vehicle, and debts other than child support, student loans and some taxes, are forgiven. The primary advantage of declaring bankruptcy is that it allows you to wipe out most of your debt and “start fresh.†Typically, the majority of those that file for bankruptcy are divorced women.
Bankruptcy may be a Chapter 13 bankruptcy, called “reorganization,†that permits retention of property, such as a home or vehicle. Instead of being forced to surrender your property, reorganization gives you 3-5 years to pay off your debts. Chapter 7 bankruptcy, termed as a “straight bankruptcy,†involves liquidating all assets except those exempt under state law.
Unfortunately, a bankruptcy remains on your credit report for as long as 7-10 years, generally making it difficult to purchase a new home or vehicle. You are also not permitted to file for bankruptcy again for six years.
Summarily, debt management is a voluntary repayment plan you choose to participate in, that enables your creditors to recoup monies you owe them. Legal liability for your debts is yours, and you control how your credit is affected. Bankruptcy is a more critical action, where the federal court determines your legal liability and responsibilities. Therefore, if at all possible, debt consolidation is preferable to declaring bankruptcy.
Concluding, by researching and then comparing as much debt consolidation companies, borrowers will be able to determine the one that meet your very specific financial situation, plus the cheaper interest rate available on the market. Nonetheless, it is advisable going with a trusted and reliable debt counselor before a conclusion is made, this is the way you save time through seasoned advise and money by obtaining better results in a short period of time.
H. Milla is editor of the Debt Relief Government Grants website – visit and see his top rated debit consolidator company recommendation.
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