Debt Consolidation

Bankruptcy vs. Debt Consolidation

When people start having financial problems, they often believe that they can handle them without professional help. Rather than filing for bankruptcy, which many equate with financial ruin, many people turn to debt consolidation companies that offer to negotiate with your creditors on your behalf and lower the amount of your monthly payments. It is important for consumers to remember that if it sounds too good to be true, it probably is. Debt consolidation companies often charge high fees for their services, sometimes as a percentage of your total debt, and often lock consumers into long repayment plans that result in a larger total debt burden than they had before consolidating.

Bankruptcy is Often a Better Option

If you are considering debt consolidation, you should also look into whether bankruptcy may be able to help. Many people are hesitant to file for bankruptcy because they believe that it will make it impossible for them to purchase a home, a car, or result in them losing all of their assets. In reality, many people who file for bankruptcy are in a much better financial situation immediately after their case has ended and are able to obtain financing in just a few short months.

In addition, while debt consolidation simply restructures your existing debts in a way that makes it easier to afford your monthly payments, bankruptcy can actually eliminate your debt. Some examples of the kinds of debts that Chapter 7 bankruptcy may be able to wipe out include the following:

  • Credit card debts
  • Business debts
  • Utility payments
  • Past-due rent
  • Medical bills
  • Certain tax debts

As you can probably imagine, getting rid of these types of debts is preferable to consolidating them over the course of several years. Whether or not bankruptcy is right for you depends on your particular circumstances, so it is always advisable to have your case reviewed by an experienced attorney before making any decisions that could affect your financial situation.

Call a New Jersey Bankruptcy Attorney Today to Discuss Your Case

If you are experiencing financial problems and have considered debt consolidation, you should talk to an experienced bankruptcy attorney before making any decisions. In many cases, bankruptcy can completely eliminate all of your debts rather than simply restructuring them, providing you with a fresh financial start. For a free consultation with New Jersey bankruptcy attorney John L. Schettino, call our office today at 201-498-9768 or send an email to [email protected].