Posted on Apr 16, 2018

John Simonian Attorney at Law

Bankruptcy and debt consolidation are two very good ways to manage overly burdensome debt. But the two are not the same, and knowing the differences will help make it easier for you to decide which one is right for you.
• Debt consolidation requires you to repay all of your debts, in full. Bankruptcy does not require you to repay everything you owe, and for the things that do get repaid, you may be able to pay a reduced balance.
• Debt consolidation is still debt, because it is accomplished by taking out a consolidation loan to pay off all of your debts at one time and then repay only the consolidation loan. In contrast, there is no new debt incurred when you file for bankruptcy, but debt is still eliminated or reduced.
These differences tip the scales in favor of bankruptcy for a large majority of the population, but not everyone is comfortable with that choice. Filing for bankruptcy will cause your credit to take a hit, but if you are significantly behind on your debts the chances of getting a consolidation loan may be slim.
For more information about how to fix your finances, call us today or reach us online at www.law-ri.com. We have multiple locations to serve you and can schedule a time to meet at the office most convenient for you.
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