Understanding Debt Consolidation Vs Bankruptcy
For most people struggling with debt, filing for bankruptcy isn’t the first solution that pops into mind. If you’re buried under multiple credit cards and loans, chances 債務重組 are that you’ve considered debt consolidation. By combining your debts together into one monthly payment, it’s easier to keep track of repaying your debt. Plus, you also enjoy the benefit of one payment instead of staying on top of bills from multiple loans and lenders. While consolidating your loans and debts is a great opportunity, is it really the best alternative to bankruptcy?
Why Bankruptcy is the Best Option
If you’re stuck between the choice of consolidating your loans and debt versus filing for bankruptcy, it’s important to consider your entire financial situation. First, be sure to check your credit report. Aside from seeing your overall score, analyze your negative items such as late payments. This will allow you to fully see the extent to which you’re indebted.
Once you have this information, you can calculate the total debt you owe and compare it to your total income. If your income isn’t equal to or doesn’t exceed the basic costs of living, then consolidating your loans isn’t for you. Even if your income exceeds your basic financial needs, don’t cross bankruptcy out of the picture until you’ve considered the following benefits:
1.Consolidation. A Chapter 13 debt reorganization plan essentially gives you the same benefits of consolidating your loans and debts. Aside from combining your debts into a single, monthly payment, bankruptcies provide you certain legal protections and advantages that a traditional consolidation can’t.