If you are in over your head financially and struggling to make ends meet in Louisiana, you may be tired of wondering if you are going to lose your house and cars. You may find yourself wondering if debt relief/consolidation is a better option for you than bankruptcy. Although both options can improve your situation, you should take a hard look at your situation to determine the answer.
Before you do, here is a brief overview of the benefits of debt consolidation vs. bankruptcy.
Debt consolidation benefits
Debt consolidation is a great option for you to consider if you want to pay your debts but need to make lower payments. Even though your creditors will know that you may be experiencing financial difficulty, no other party has to know. This can help you to retain access to your current credit and assets. Although consolidation has its perks, there are a few things you should be aware of.
Factors to consider about debt consolidation
In order for you to consolidate your debts, you will have to work with a debt consolidation company. They may be able to negotiate with your creditors to lower the amount you owe. You are no longer required to pay multiple payments to different creditors each month. Instead, you will pay one payment every month to the debt consolidation company. The debt consolidation company then takes your payment each month and splits it up to pay their fees before sending the remainder of those payments to your creditors. Debt consolidation does not stop or limit your creditors’ collection activities. They can still call, send your accounts to collections and sue for payment. You will also owe taxes on any debts settled for less than their full amounts.
The benefits of bankruptcy
Bankruptcy, on the other hand, is ideal if you do not worry about the negative impact it may have on your credit profile. Even though you may not have enough income to pay your debts, you can still protect your assets. There are no tax penalties on discharged debts. Bankruptcy can also resolve your financial crisis much faster than debt consolidation.
There are numerous advantages and disadvantages to debt consolidation and bankruptcy for you to think about. How you benefit from them is dependent on your situation. If you are struggling to honor your financial obligations and are thinking about debt consolidation, you should speak to a bankruptcy attorney who can evaluate your situation and go over options.
Disclaimer – Attorney Advertising. Under Federal Law, we have been designated a Debt Relief Agency and we help people file for bankruptcy relief under the Bankruptcy Code. This information is not intended as legal advice and no attorney-client relationship is created. Results may vary. Results not guaranteed. Dramatization – not actual clients in pictures and videos. Thomas C. McBride, attorney in Alexandria, LA.