Is Debt Consolidation a Better Option than Bankruptcy?

When debt becomes too much to handle, you may find yourself considering bankruptcy. But you still have an option that is better, one that will not erase your credit score and take all of your possessions to pay for your debt. Debt consolidation will help you get your debt under control and allow you to build a plan to pay off your debt at a pace that is comfortable for you and get the creditors to stop calling you.

Debt consolidation is offered by a third party, the other two parties being you and the creditors that you owe money to. With this third party, you can get all of your credit cards and loans negotiated into one lump sum and begin paying one monthly bill that will, over time, eliminate your debt and give you back the privacy that has been interrupted by creditors that are harassing you.

Bankruptcy, on the other hand, will eliminate all your debt but it will be at the expense of all of you assets. Once the creditors have gathered what they feel is an adequate amount of money, they will discharge, or remove, the rest of you debt that you have will them. But if you have multiple creditors and you don’t have enough assets to cover what the creditors think is enough, you won’t be able to pay them. Now they may see that you have nothing and then leave you alone and close your credit line with them, but then you are left with nothing. Everything you have that has value to someone else, jewelry, a car, a house, anything designer and in good condition will be auctioned off to satisfy the creditors.

But what will you do now that all you possessions have been carted off and liquefied? You are left to pick up the pieces and figure out a way forward. But you can skip the invasion and get right to rebuilding your life through debt consolidation.