Should I Consolidate my Bills or Get Bankruptcy Protection?

Bill consolidation loans are a good option for many people. However, there are circumstances in which the individual simply has to realize the value of filing for bankruptcy protection. Each person’s circumstances are unique and for that reason, individuals should consult an attorney prior to making a decision in either of these cases. For many, either of these options can help the individual to get out of debt.

When To Consolidate

Bill consolidation loans allow individuals who have good or better credit to consolidate all of their debt into one loan. The individual debts to creditors are paid off by the funds from the new loan. This option is best for several situations:

• Maintaining a good credit score; since you avoid bankruptcy and you make the process of loan repayment easier, this option can work for many people.
• Those with the ability to repay the debt after the consolidation; those who have the funds to repay the debt they owe should consider this method.
• Those who wish to keep assets that would not be protected in bankruptcy; some property, including excessive real estate, personal property, expensive electronics, and other items may not be protected from creditors in bankruptcy.

Bill consolidation loans are an ideal option for those who wish to repay their debt but need help doing so. However, not everyone will qualify for these loans.

When to File Bankruptcy

In some situations, the ability to use and obtain bill consolidation loans is limited. The value may not be present in the following situations:

• The individual is unemployed or does not have the funds necessary to repay their debt
• Those who do not have many assets or have poor credit scores
• Individuals who are looking for a way to stop creditor’s calls

There are two types of bankruptcy for consumers. In Chapter 7 bankruptcy, many debts are discharged, meaning they are not repaid ever. In Chapter 13 bankruptcy, the debts are reorganized, though many are still repaid, in a more affordable way for the borrower. Both options may be beneficial to the individual looking for a way to get out of his or her debt.

Hire an Attorney

In either of these situations, the individual should hire an attorney. The attorney can offer advice on if debt settlement, bill consolidation loans or bankruptcy is the right option for the individual. In addition, the attorney can work with the individual to represent them in any legal proceedings possible.