One last question
Bankruptcy will keep you a slave to your credit report, but debt consolidation can get you going in the right direction.
Welcome to the final chapter in Personal Money Store’s guide to debt consolidation. By now you should have a pretty good idea of whether you should pursue debt consolidation.
But is there one lingering option nagging at the back of your mind? If you think bankruptcy is a better alternative than debt consolidation, think again.
Why do people consider bankruptcy?
Perhaps you found out how long it will take to pay off your debts, even with debt consolidation, and it’s longer than you thought. Perhaps you like the idea of supposedly “wiping the slate clean.”
Bankruptcy is never a good option. People who file for bankruptcy should do so because they really, truly, without a doubt have no other options.
Why avoid bankruptcy?
Filing for bankruptcy will follow you forever. Chapter 7 Bankruptcy stays on your credit score for 10 years. Chapter 13 bankruptcy stays for seven years. However, if someone inquires about whether you’ve filed bankruptcy at any point, ever, and you don’t own up, that’s criminal fraud.
I scoured the Internet in search of a financial counselor who would explain when it’s the right time to file bankruptcy. I couldn’t find one. The resounding answer to “When should I file bankruptcy?” was “Never.”
More alternatives to bankruptcy
If you are considering filing bankruptcy because of your total debt, including credit cards and other bills, debt consolidation should be your first option. If your house has lost value or you can no longer afford your house payments, try mortgage loan modification.
If you go through both of these processes and you either don’t qualify or you are still having trouble affording things afterward, it is time to start getting rid of stuff. It may be hard to sell your things, but this is still a better option than bankruptcy. After a while, you won’t miss your stuff anymore. However, bankruptcy never goes away. Chances are that any valuable assets you have would be repossessed if you file for bankruptcy anyway.
The end
Thanks for sticking with me through me debt consolidation journey. If you’ve decided that this process is right for you, sign up through Personal Money Store for a free consultation with a debt counselor.
Most people would as about insolvency though. Wouldn’t they?
No Publius is wrong. If they asked if you’ve be insolvent then yes it’s fraud. IF they ask if you been bankrupt the answer is no.
“However, if someone inquires about whether you’ve filed bankruptcy at any point, ever, and you don’t own up, that’s criminal fraud.”
Hogwash.