Here’s why debt consolidation is a better solution than bankruptcy. When a person is considering bankruptcy, they are on the brink of making a decision that may every well negatively impact them for the rest of their lives. Once discharged, the bankruptcy stays on their credit reports for ten years. In addition, it stays on their court record for twenty years. Moreover, employers, lenders and insurers view people who have filed bankruptcy as greater risks. Certain positions and security clearances discourage people who filed BK to even apply. They are literally arbitrarily discounted an opportunity solely because of the filing. Those are just some of the limitations this form of debt relief causes. Debt consolidation frees a person from the constrictive nature of bankruptcy.

How is debt consolidation a better choice than bankruptcy? First and foremost, you avoid filing endless mounds of paperwork required by the court trustee and attorneys. Secondly, the new bankruptcy laws made filing BK and expensive proposition. On average, you will shell out around $3500.00 in attorney’s fees, plus the cost of filing, plus the cost of the mandatory financial classes. The new laws literally force the majority of people to file Chapter 13, commonly referred to as the repayment plan. Once on this plan, there is virtually no room for error, accident or mishap. Based on THEIR calculations, you are left with very little money to live on.

On the other hand, with debt consolidation, after the accounts are settled as agreed, you walk away with a clean credit report. In addition, most creditors will gladly renew the accounts once the debt is paid off.
Debt consolidation also affords you the ability to reduce the debt amount by forty to seventy percent. That’s a significant savings to say the least. Unlike bankruptcy, in which court tells you how much you can afford, with debt consolidation, you pretty much have control.