Can Debt Consolidation Help Avoid Bankruptcy in Arizona?
If you’re facing financial hardships and commitments to various debtors, you might be feeling overwhelmed. Debt consolidation can help make your payments manageable and aid in getting lower interest rates on some of your debts. But how can you tell who is a trustworthy lender and who is out to get you for more money?
Ultimately, debt consolidation is preferable to filing for bankruptcy. But you’ll need to do your research and know what to look for in a debt consolidation company. Making the right choice between debt consolidation and filing for bankruptcy can give you peace of mind and put you on a road toward financial freedom.
What you need to know about debt consolidation vs. bankruptcy
debt to pay off others, it can be strategic to help you lower your monthly payments. This small change could be enough to make it possible for you to pay off your debts.
In contrast, bankruptcy can help you eliminate all debt. But this process harms your credit score and will make it challenging to get a line of credit for anything for several years.
Debt consolidation pros
Before deciding to consolidate your debt, take a look at the advantages you could experience from this tactic.
- Single monthly payment for all debts
- Lower interest rate to make the debt more affordable
- Place an expiration date on your debt payments
Debt consolidation cons
While debt consolidation you’ll have some disadvantages. Here’s what you should know about the detractors for debt consolidation.
- Debt consolidation requires good credit or someone to cosign for you<
- You won’t get the benefits of debt discharge as you’ll still need to be prepared to pay off all financial commitments you currently face
Bankruptcy pros
Many people find the idea of bankruptcy intimidating. It does require some legal processes, but ultimately it can be a very freeing option for those who are suffering from severe financial hardships. Here are the advantages of filing for bankruptcy.
- Total debt discharge or repayment plan that makes debt affordable
- Starts the process of restarting your financial freedom
- Makes it so that creditors cannot hound you to repay your debts
Bankruptcy cons
Bankruptcy is a serious process and something you should not take lightly. Here’s a look at some of the cons of filing for bankruptcy in Arizona.
- If you own personal property, you might have to surrender or forfeit it
- You could lose your home and have to move
- You’ll need to hire a lawyer to complete the necessary paperwork
- Your credit score will be extremely low for several years making it difficult to get a line of credit
Which is better for you?
The decision between debt consolidation and bankruptcy comes down to how much debt you owe. Sometimes due to unfortunate circumstances, people have to take on large amounts of debt that they cannot get out of even with a great debt consolidation plan.
Talking to an expert is the best course of action if you’re unsure about whether debt consolidation or bankruptcy is right for you. Our office is ready to help guide you in making that decision and filing the necessary paperwork to begin the bankruptcy filing process if you decide that’s what’s right for you. Contact us now for more information.
