Bankruptcy filing has the effect in two ways; one of them is that you will get relief from your debt and the harassment of your creditors or collection agencies, but the other effect is that you will hurt your credit report heavily. Your credit report will show it for the next 8 years that you have filed bankruptcy. This report will have negative effect on creditors for future needs of loan for you. Most of the lenders will charge high rate of interest if they agree to provide you loans.
Now the question comes can debt consolidation be the alternative of bankruptcy? The answer is “yes”. First of all you need to understand the basics of debt consolidation. Debt Consolidation program combines all you debts in a single monthly payment. You will pay to the consolidation company and they will pay to all your creditors. Here your total payment towards creditors will decrease a certain amount. So if you can consolidate your debt then you can certainly avoid bankruptcy filing. Of course, you must have that position to pay the monthly payment to the consolidation company. Overall debt consolidation is really a good service to avoid bankruptcy.
Now the question comes can debt consolidation be the alternative of bankruptcy? The answer is “yes”. First of all you need to understand the basics of debt consolidation. Debt Consolidation program combines all you debts in a single monthly payment. You will pay to the consolidation company and they will pay to all your creditors. Here your total payment towards creditors will decrease a certain amount. So if you can consolidate your debt then you can certainly avoid bankruptcy filing. Of course, you must have that position to pay the monthly payment to the consolidation company. Overall debt consolidation is really a good service to avoid bankruptcy.
6 comments:
Definitely Debt soundness provide an umbrella, where bankruptcy cannot be justified on financial management or decision, save as tool of strategy of a kind of last resort.
Armand Rousso
http://economy.armandrousso.biz/
I think Debt Consolidation is the only honest alternative when you get in financial hot water. I have always thought that filing Bankruptcy was somehow dishonest.
Debt Consolidation is well off advised on someone using credit cards since they could hold quite large interest rates than even the unsecured loans. For credit card users if you have a property like a house or a car you may get the advantage of lower interest rates if you used the property as collateral. This way you reduce the total cash flow and interest rates giving you a chance to pay sooner with fewer amounts. Remember that the use of credit cards should be controlled with a lot of efforts since many people are tempted to use a credit card to purchase things unintended for especially those who love window shopping; they are tempted to go for impulse buying. If you spend more than your income with your credit card then you are in for fire and are only adding debts to your credit card. After debt consolidation of your credit cards, it does not mean that all is well. Control the use of your credit card to avoid growing debts.
Poly Muthumbi is a Web Administrator and Has Been Researching and Reporting on DEBT for Years. For More Information on DEBT CONSOLIDATION, Visit Her Site at DEBT CONSOLIDATION
I would see debt management or an IVA as a suitable alternative to bankruptcy
Well written and very informative. Also very timely; With the state of the nations economy, falling house prices & rising inflation, many people will be faced with this dilemma.
There are, of course other alternatives. For some consolidation may be better, for others, perhaps a different solution. I was reading this article earlier today which provides a brief overview of some of these: Debt Definitions. It is only very brief, but I thought it was useful to get the basics at a glance, all in one place. Check it out if you get chance.
Thanks again for your post.
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