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Debt consolidation is a very good alternative compared to bankruptcy as it helps in maintaining credit score, and reputation, and pays off all the debts at a revised favorable alternative. However, people with irregular or low income cannot avail the benefits of debt consolidation. This can be the sole reason why many people often opt for bankruptcy as they can have something to survive and reboot their life on a clean slate. Chapter 7 or Chapter 13 bankruptcy can help in achieving the goal for people who are not eligible for debt consolidation. Know more about bankruptcy and associated terms at https://recoverylawgroup.com/bankruptcy/.
What are the advantages of bankruptcy over debt consolidation?
Bankruptcy can be very helpful in discharging unsecured debt and can provide immediate relief against the trauma, lender foreclosure stress, and other lender actions for recovering their debt. Bankruptcy can also help in preventing any lawsuit claimed by credit card companies. If you do not have non-dischargeable debts like child support, taxes, alimony, home mortgage interest, etc., you can avail of almost 100% discharge of debts in exchange for your non-exempt assets.
What can be some reasons to consider debt consolidation?
Debt consolidation is certainly not something you can use as a last resort. It is not an emergency move. This move takes time and involves several rounds of negotiation and discussion with the lenders. Many times, there cannot be an agreement between the debtors & the lenders, and hence debt consolidation after all the efforts might go in vain. In the name of debt consolidation, many companies might trick a debtor into a debt management program. This program involves the debtor paying the agency to distribute the money to different creditors after arriving at a settlement offer. The agency eats into the payment available for distribution of lenders as its charges, hence, can often be a bad idea.
Debt consolidation might work if you have many lenders, and they are willing to cooperate to receive their funds earlier or with lower risk. Different situations demand for a different tailor-made solution. To ensure you are assisted by top attorneys in and around Los Angeles & Dallas, TX, dial 888-297-6203 now.