Bankruptcy or Debt Consolidation, What to Do?
People suffering from massive credit card debt have contemplated whether they should file for bankruptcy or get a debt consolidation loan for years. The short answer is, if you can get the loan, do that.
Yeah bankruptcy sounds nice. You don’t owe anybody anything afterwards, though you may have to liquidate some of your assets. The problem is the huge black mark this leaves on your credit report. This is a black mark that never goes away. The seven-year rule you always hear about will not help.
A bankruptcy on your credit report screams high risk. Whether applying for a credit card, a mortgage, or even a job, bankruptcy will cause anybody looking at your credit report to pause.
Even worse, in recent years bankruptcy law was changed to allow credit card companies to be able to take your family home for outstanding debt. You read that right. Unlike Wall Street bankers who get a handout every time they ask for one, normal people can have the roof taken from over their heads if they can’t keep up with their credit card payment.
It’s no surprise that credit card companies, who spent millions lobbying Congress, got this bill passed when most people were not paying attention. Today, all too many Americans look at their debt and think bankruptcy is an option, not realizing that they could literally lose it all.
Right about now debt consolidation is sounding like a really good idea.
In debt consolidation, you figure out the total all your debts, then find a single lender to provide a loan for that amount. Ideally, this loan will be long-term and low interest. You then use this money to pay off your separate high interest debts.
Suddenly the five credit cards you could barely keep up with are all paid off and all you have left is one affordable low monthly payment to a single trusty lender who wants to help you get back on your feet.
Seriously, at this point, aren’t you tired of worrying every week about how you’re going to pay for the groceries and manage to pull off the minimum payment on all of your credit cards? There is no reason to keep up this high stress lifestyle. In today’s economy the last thing that anybody needs is one more reason to worry about money. Bankruptcy is a far more costly act than ever before. If you’re struggling with debt there is no better solution than a debt consolidation loan.
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