When you're struggling to make ends meet, the financial strain can also become an emotional one. If you're looking for a solution to managing your debts, you might be thinking about bankruptcy. However, you shouldn't overlook the benefits of debt consolidation. Here's a look at what you need to know about debt consolidation and why it's often better than bankruptcy.
Protect Your Credit Score
It's no secret that filing for bankruptcy will cause your credit score to suffer. You'll often have a hard time securing any new credit for several years following your bankruptcy discharge. However, it doesn't have to be that way.
Instead of having your debts discharged and your credit score damaged, you can opt for debt consolidation instead. With debt consolidation, your obligations are fulfilled and paid off, then you have only one monthly payment to worry about.
Additionally, as you make payments on your debt consolidation loan, you are improving your credit score with an established credit account that's being paid as agreed.
Easier To Get
When you file for bankruptcy, you have to petition the court, meet with a bankruptcy trustee, and meet all sorts of challenging criteria. This can be a long, difficult process. The good news is that you don't have to take the time in court and in the trustee's office if you choose debt consolidation instead.
You will meet with a debt consolidation lender to fill out the application. All you need is documentation of the debts, proof of your income, and some form of identity verification in most cases. This is far easier than the legal process of bankruptcy, making it a more ideal solution when possible.
The court process required when you file for bankruptcy can take several months or more to complete in many cases. During this time, your debts remain outstanding although creditors can no longer contact you.
Unlike bankruptcy, which can take several months to process, you may have your debt consolidation loan within days. This can get you on track toward stopping creditor calls and fixing your credit much faster. You won't have to worry about outstanding debts for the next few months if you consolidate your debts.
These are a few of the many reasons why debt consolidation may be a better option than bankruptcy for many people. For more information, talk with a debt consolidation attorney near you for more information.