Are your debts so out of control that you’re beginning to get the sinking feeling that declaring bankruptcy may be your only option? Before you do, you should realize that there is another option that could be far better: Debt Consolidation.
Differences between Debt Consolidation and Bankruptcy
If you declare bankruptcy, you’re basically accepting that you cannot repay your debts and so as a last resort, you will file for bankruptcy. The advantage of doing so is that your unsecured debt will be dramatically reduced, but at the same time, you’ll also face a lot of other consequences.
On the other hand, debt consolidation involves taking all your existing debt and putting it into a single lump sum that you then develop a plan to repay. Sometimes it may help you to reduce your total debt, but not as much as a declaration of bankruptcy – and it doesn’t come with the consequences of bankruptcy either.
Why is Debt Consolidation Better?
As you may have gathered, it all boils down to the consequences of bankruptcy – which are severe.
To begin with, there’s the fact that bankruptcy is an extremely public affair, so you’re not going to be able to ‘hide’ the fact that you’re bankrupt from anyone. Aside from the obvious shame that goes along with it, there’s also the fact that you may find it hard applying for certain jobs with bankruptcy on your record.
On top of that, bankruptcy has certain implications on your credit rating. For a certain period, you’ll be unable to obtain credit of any kind, and even after that, you may have difficulty applying for mortgages, loans, and so on.
In short, there are some very longstanding implications associated with bankruptcy that makes it an option that should really only be used in the last resort, as initially going for debt consolidation would be far better.
Choosing How to Proceed
It isn’t easy dealing with a mountain of debt, but the fact of the matter is that you should definitely at least try to see if some of the newer and more friendly debt consolidation options are available to you. Check out Trinity Debt Management as a starting point and see how they could help you to work off your debt more easily without having to resort to filing for bankruptcy and facing long-term disruptions to your life in the process.