Bankruptcy is when a person or business officially declares the inability to pay back creditors the money that was previously borrowed. This should only be done as a last resort, because bankruptcy will affect every aspect of your life.
It will also affect your ability to get loans, mortgages, and credit card in the future. However, for some people, declaring bankruptcy means finding freedom once again. It wipes your slate clean so to speak, and you can start over again with your credit.
However, there are a number of things you should try before you declare bankruptcy. One of these things is debt consolidation. Debt consolidation cannot help everybody concerned with money problems, but for some, it is jus the boost needed to keep them from declaring bankruptcy.
Debt consolidation is basically taking all of your loans and paying them off using one large loan. You then have one monthly bill to pay instead of a number of smaller bills. This can save you money in the long run. Why? The one large loan will usually have a secured lower fixed interest rate. This is especially advisable if you are considering declaring bankruptcy because of high credit card debts.
Credit cards have very high interest rates—usually much higher than any other kind of loan. If you miss just one month of paying your card in full, you may never get back on track for paying off the balance. This can really start to add up if you find that you have more than one card. If you are far into debt, you can probably not get an unsecured loan from a financial institution, like a bank.
However, you should be able to get a secured loan. A secured loan uses your house, car, or other possessions as collateral. With a lower interest rate, you can start making headway into your debt instead of simply making the minimum monthly payments. This will help you to avoid bankruptcy.
Consolidating your debts may not be the best choice for everyone. In fact, in some cases, bankruptcy is really the best way to get back on the financial fast track. However, it is important to realize that you have choices.
If you don’t have to declare bankruptcy, avoid it and you will find that your life will be financially easier to handle in the future. It depends on your unique situation. Talk to a financial professional if you want more help learning about debt consolidation.
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How to File for Chapter 7 Bankruptcy List Price: $39.99 Sale Price: $25.07 |
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In these times of massive credit card debt and stagnating incomes, filing for bankruptcy has become the only relief for thousands of people. The information in How to File for Bankruptcy is so complete that a person can file virtually on his own, without needing to hire a lawyer... |
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The New Bankruptcy: Will It Work for You? List Price: $24.99 Sale Price: $15.83 |
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Considering bankruptcy? Get the facts and find out how bankruptcy could work for you. Bankruptcy laws have changed, and figuring out how to use them effectively is harder than ever. For plain-English guidance you can trust, turn to The New Bankruptcy... |
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Bankruptcy and Debtor/Creditor: Examples and Explanations (Examples & Explanations) List Price: $43.95 Sale Price: $29.98 |
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To keep pace with the recent major changes in bankruptcy law, noted author Brian Blum presents a completely revised edition of his popular study guide, "Bankruptcy and Debtor/Creditor: Examples & Explanations... |
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Chapter 13 Bankruptcy: Keep Your Property & Repay Debts Over Time List Price: $39.99 Sale Price: $21.35 |
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Reduce your debts, save your property -- and start over! Are you behind on your mortgage, taxes or other bills? Are creditors threatening foreclosure or repossession? This book will show you how to save your house, car and other assets with Chapter 13 Bankruptcy... |
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Bankruptcy and Related Law in a Nutshell (Nutshell Series) List Price: $32.00 Sale Price: $23.05 |
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This comprehensive guide covers bankruptcy issues and laws. Written by experts in the field, the text discusses judicial debt collection, creditors with special rights, debtors' state law remedies, commencement, conversion, and dismissal of a bankruptcy case, automatic stay of collection, creditors’ and debtors’ rights, exemptions, collection, and pre- and post-bankruptcy transfers... |
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