Bankruptcy vs debt consolidation, which one is right for your current debt problems?

If you have poor credit, debt collectors calling you home, or you owe more to bills than you earn, you may need a debt consolidation loan. This is one way that you can repair you credit by paying off your current debt affordably. You can work with a credit repair service to get help with a consolidation loan. They will also be able to help you repair your credit in other ways.

You may need professional help to obtain a consolidation loan. You will need special approval for the loan if your credit score is much lower than is required for conventional loans. The credit repair service may be able to get you an unsecured loan one that does not require collateral but many times you will have to put up some type of collateral. If you are in a poor financial condition a consolidation loan could be the only thing standing between good credit and bankruptcy.
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Jordan FeRoss | Debt Consolidation

Anyone who has ever suffered through the bankruptcy process will tell you that the worse part of the time leading up to the actual filing is the harassment and threats doled out by creditors. Late night phone calls, threatening registered letters and intimidating visits all serve to further humiliate those already suffering. This demeaning treatment makes one even more grateful for what is perhaps bankruptcy’s most beneficial asset - The Automatic Stay.

The automatic stay is an action issued by the bankruptcy court as soon as it records your bankruptcy petition filed by Duluth bankruptcy attorneys. It is an immediate, although temporary, measure that stops all harassment from creditors, evictions, wage garnishments, eviction, foreclosures, legal actions due to alimony or child support or actions related to tax issues. Efforts to disconnect utilities and draft amounts from bank accounts are also stopped or “stayed”. This “stay” is in effect until the bankruptcy court lifts it. While it gives the debtor temporary breathing room, some of the actions it stops may not be discharged by the bankruptcy.
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Nick Messe | Bankruptcy Basics

It’s been represented as the answer to problems of folk with a mass of mastercards. Just pay them off with one super loan that covers them all. Is it the answer? Well it could be dependent on how much you owe, whether you’ve but your home up as security, and whether you have really made changes in your spending habits so that you don’t spend you way back into trouble just as quickly as you’ve gotten a debt consolidation loan.

1. The biggest financial advantage of the method is that you are taking many high interest card accounts and exchanging them for one with a lower interest rate. That is one payment at a lower interest vs multiple payments with high IRs. As an instance, you might mix card bills, doctor’s bills, and unsecured personal loans.

2. The ease of switching from multiple to one payment a month will be important to some folks. They are going to find that it is easier to pay in a timely fashion when they are only working with one payment.
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Terry Stanfield | Debt Consolidation

If you’ve ever found yourself struggling with repayments to your credit cards, then you’ll know how quickly the problems can grow.

With a typical credit card carrying an interest rate of anywhere between 12% and 20%, making purchases on a credit card can mean you will have to repay a lot more than you have borrowed. If you keep adding to the debt by making further purchases, it might not be long before it all becomes unmanageable.

Can debt management help with my credit card debt?
If you can’t keep up with your credit card bills under the existing terms, then a plan could help to make your repayments more affordable.

In short, a debt management plan is an agreement between you and your creditors (in this case your credit card providers - and perhaps other unsecured creditors as well), in which you will pay a reduced amount towards your debts every month. This helps you make sure you can repay everything you owe, but at a pace that you can manage.
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Melanie Taylor | Debt Management

The average American household has nearly $10,000 in credit card debt, and many people are only able to make the minimum payment of 2% of the balance. Even 2% is $200, and by paying the minimum payment, you could be paying on the balance for decades before you finally pay it off.

Since new legislation will make it more difficult to file for bankruptcy, it may occur to savvy debtors to try to negotiate a good proposal with their credit card company in order to make it easier to pay off the balance. Is this possible?

It might be possible depending on your current balance,credit history and interest rate. If you have a history of paying on time, then you can easily get lower interest rates by calling your company. They will, if you tell them that you got a better offer from another company. If you have a history of paying late, however, they probably will not be willing to lower your interest rate. That is really unlucky because late payment has probably forced the credit card company to raise your interest rate in the first place. Still, it’s worth a phone call; you may get lucky.
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Max Vogt | Debt Consolidation