Best Online Loans Advice

Filing for bankruptcy in the United States is not as easy as it once was for the individual. People file for bankruptcy for many reasons, but the main reason is that a member of the family has become chronically ill, and the family has gone into great debt due to medical expenses, and can no longer keep up with the balance due.

Many people get in over their heads with multiple monthly payments that they simply cannot afford. It can be a few simple mistakes that give you problems and cause you to need to take a look at ways to lower the debt. Bankruptcy is one option, but it’s one that not many people want to view as anything more than a last resort.

With debt consolidation, you have a chance to combine all your bills into one payment, usually save a bit in interest and be on the way to rebuilding your credit. As long as you find a reputable financial consolidation specialist, you will find that the process for putting your loans all together is not difficult and usually within the financial parameters that you can handle. In some cases, these companies will negotiate with your creditors for a lower payoff just to help you lower your overall payment. Many credit card companies will do this if your counselor knows what they are doing and can present it in the best light.

The danger in this solution is that the lender rarely checks to make sure that you have actually used the funds for debt consolidation. Yes, that’s what you told them when you applied for it, but that doesn’t mean that that’s what you’re going to use it for. The temptation, when having that money in hand, is to get that big screen TV or take that Mexico vacation, and leave the bill paying for another day. Using the money that way is going to get you into even deeper trouble in the near future.

The simple answer is that bankruptcy is much worse for your credit and for your financial future. When you declare bankruptcy, you are not even going to get out of paying all of your bills like in the past. Some of the laws have changed and many people are still required to pay their debts, so bankruptcy is no longer a get out of debt free card. The more important implications come after the fact, though. Bankruptcy is the worst thing that can go on your financial record and it will set your credit back for a period of seven to ten years. People with this on their record cannot get a loan of any kind for that period and it can impact your ability to get jobs, as well.

On the other hand, if you cannot qualify for Chapter 7 and you are required to use Chapter 13 bankruptcy then you should really think twice. The benefits of Chapter 13 are significantly smaller. Your debts are not discharged. You have to repay them back at a certain percentage with a payment plan that can extend up to five years or more. Plus your credit is ruined for at least 7 to 10 years. And it is a matter of public record.

If you consider the above pros and cons carefully, then it will be much easier for you to decide “Bankruptcy or debt consolidation – Which is a better option to repay your debts?” After a careful consideration, it can be commented that consolidation is a much better way to pay off your debts as it has a positive impact on your credit report. Moreover, if you go for debt consolidation, you can apply for new credit as soon as you repay all your debts; in comparison, you will have to wait for minimum 2 years in order to get new credit if you have filed bankruptcy. However, it is advisable that you seek help of a financial advisor, who can analyze your financial condition and suggest which option is best for you.