Which Is Better For You: Debt Consolidation Or Chapter 13 Bankruptcy?
Debt consolidation and Chapter 13 bankruptcy provide a way out of debt through a repayment plan. When you experience a hardship in your finances, where should you turn for relief? You can turn to a bankruptcy lawyer, as these attorneys help with debt consolidation and bankruptcy. When you meet with an attorney, they will help you determine which option is right for you by working through some factors about each choice.
Your Home Status
The status of your home plays a role in this decision. Are you caught up on your home mortgage payments, or are you behind on them? If you are behind, are you facing foreclosure? If you are not past-due on your home loan, you could use a debt consolidation program to find relief from your debts. If you face foreclosure on your home, you will need to use Chapter 13. A debt consolidation program will not help you stop the foreclosure, but Chapter 13 will. When you meet with a bankruptcy lawyer, this is a subject your attorney will discuss with you, as it is a major part of your decision.
The Types of Creditors You Owe
The next factor your lawyer will talk to you about is your debts. What other debts do you owe? Are they credit card debts primarily or other types, such as alimony, child support, and student loan payments? If you mainly owe credit card debts, a debt consolidation program will likely work well for you. If you owe money on other things, like the ones listed, using Chapter 13 is the more beneficial choice. You might want to bring a list of your debts with you when you visit a lawyer for advice.
The Effects of Each Option
The final thing to consider is the effects of each option. Will either option eliminate the debts you owe? What are the long-term effects of using these methods? First, Chapter 13 is more likely to offer some debt forgiveness, but this is not guaranteed. Secondly, you will experience long-term effects from both, but the effects of Chapter 13 are typically more serious than those of a debt consolidation plan. Your lawyer can explain how both options work and help you make the right choice.
These are three of the most important factors to consider before making up your mind. If you would like more information about debt consolidation bankruptcy, call a bankruptcy attorney today.
