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The decision to manage debts requires the revision of your financial situation on your part and besides, you should choose the most appropriate variant for debt covering. If you are considering debt consolidation or bankruptcy, you should know pros and cons of both these options.

  • Protection from lenders – automatic stay prevents most collectors and creditors from collection activity against you. Debt consolidation means you repay all your previous debts with a new loan. You have to meet the requirements of a new loan agreement, but you are protected from the collectors and creditors of your previous debts.
  • New beginning. Due to Chapter 7 bankruptcy case, the most unsecured debt can be eliminated. Chapter 3 bankruptcy case gives you a possibility to cover a certain portion of the unsecured debt you have, as well as to get a lower rate. Debt consolidation plan also gives you the opportunity to borrow with lower interest rate.
  • Impact on your credit score. A bankruptcy filing negatively influences your credit rating and stays on the credit report for 7 to 10 years. In its turn, debt consolidation doesn’t decrease your credit score. Debt consolidation doesn’t damage your reputation as well, unlike bankruptcy.

To make the right decision, you can look for helpful information here:
Debt consolidation or bankruptcy?