Debt Consolidation Loans instead of Bankruptcy?
You may feel your debt
is overwhelming and bankruptcy is the only way out. Or, you may
feel it is the easiest way to start over. Bankruptcy may be your
best option, as opposed to debt consolidation, but it is something to consider carefully. A recent
study by the University of Michigan found that erasing debt in
bankruptcy is vastly under used by consumers in debt.
Before filing you must
make sure for one that the kinds of debts that you owe are dischargeable
(i.e. eliminated or erased by the bankruptcy). For example, if
you used the equity in your house as collateral for a loan, the
loan may not be eliminated in bankruptcy.
Credit card debt is
typically erased after a successful bankruptcy. Another concern
of course is your credit rating, however if your credit is already
quite bad, filing bankruptcy may actually improve your credit
rating. This is because after filing you will have less debt and
can't file again for 6-7 years, both of which make you a better
credit risk. For more free personal bankruptcy information.