What does bankruptcy mean to me?
Have you been thinking about filing for bankruptcy protection? Given the negative connotation of the word bankruptcy, are you scared to wits what it can do to you. If you do choose to file for bankruptcy protection, it can guarantee your financial well-being in the future.
What is bankruptcy and what does it do for me? A simple description of bankruptcy is a way to eliminate your debt and for you to start fresh with a clean slate financially. Bankruptcy eliminates most if not all of your debt and lets you start new financially. This is the positive side of the bankruptcy process, but it does come with a negative side. Once you have declared bankruptcy, you will have a bad credit history for the next 10 years. The downside to filing bankruptcy is that your credit report will be marred for the next 7-10 years.
When should you consider bankruptcy versus debt consolidation? The big difference between bankruptcy and debt consolidation is the amount of debt you owe and if you can or cannot pay it off. Bankruptcy can eliminate the mountain of debt that you have accumulated over the years, hence getting rid of your responsibility to pay it off. If you can pay off your debt in reasonable amount of time, you should regard debt consolidation instead.
With debt consolidation, you will look for a debt consolidator who is keen to manage your debt. With the help of the debt consolidator, he/she will assess all the debt that you have with various creditors and come up with a payment plan for each of them and eventually pay them all off in due time. The debt consolidator generally ask you to pay him/her a set amount per month. This debt consolidator will then distribute the monthly payment to the various debtors that you owe, effectively giving you a clear picture of your financial health. Even though debt consolidation sounds like a viable option, we will continue our discussion on the bankruptcy as you have so much debt that it is next to impossible to pay them off.
